Exhibit 1.1
4,250,000 Shares
▇▇▇▇▇▇ CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
February __, 1997
February __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co.
Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Credit Suisse First Boston (Europe) Limited
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Ltd.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇ Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
Certain shareholders (the "Selling Shareholders") of ▇▇▇▇▇▇ CORPORATION, a
Delaware corporation (the "Company"), as named in Schedule I hereto, severally
propose to sell to the several Underwriters (as defined below) an aggregate of
4,250,000 shares (the "Firm Shares") of the Company's Common Stock, par value
$.01 per share (the "Voting Common Stock") (it being understood that a portion
of the Firm Shares to be sold by the Selling Shareholders may be Voting Common
Stock which will be issued upon conversion of outstanding Nonvoting Common
Stock, par value $.01 per share (the "Nonvoting Common Stock," and together with
the Voting Common Stock, the "Common Stock"), prior to or concurrently with its
delivery to the Underwriters), with each Selling Shareholder selling the number
of shares set forth opposite such Selling Shareholder's name in Schedule I
hereto under the heading "Number of Firm Shares To Be Sold." It is understood
that, subject to the conditions hereinafter stated, 3,400,000 Firm Shares (the
"U.S. Firm Shares") will be sold to the several U.S. Underwriters named in
Schedule II hereto (the "U.S. Underwriters") in connection with the offering and
sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and 850,000 Firm Shares (the "International Shares") will be sold to the several
International Underwriters named in Schedule III hereto (the "International
Underwriters") in connection with the offering and sale of such International
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Credit Suisse First
Boston Corporation, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation and ▇.▇.
▇▇▇▇▇▇ Securities Inc. shall act as representatives (the "U.S. Representatives")
of the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International
Limited, Credit Suisse First Boston (Europe) Limited, ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation and ▇.▇. ▇▇▇▇▇▇ Securities Ltd. shall act as
representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the Underwriters.
The Selling Shareholders also severally propose to sell to the several U.S.
Underwriters not more than an aggregate of 637,500 additional shares of the
Company's Voting Common Stock (the "Additional Shares") (it being understood
that a portion of the Additional Shares may be Voting Common Stock which will be
issued upon conversion of outstanding Nonvoting Common Stock owned by such
Selling Shareholders prior to or concurrently with its delivery to the U.S.
Underwriters), with each Selling Shareholder proposing to sell the number of
Additional Shares set forth opposite such Selling Shareholder's name in Schedule
I hereto under the heading "Number of Additional Shares To Be Sold," if and to
the extent that the U.S. Representatives shall have determined to exercise, on
behalf of the U.S. Underwriters, the right to purchase such shares of Common
Stock granted to the U.S. Underwriters in Section 3 hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-19757) relating
to the Shares. The registration statement contains two prospectuses to be used
in connection with the offering and sale of the Shares: the U.S. prospectus, to
be used in connection with the offering and sale of Shares in the United States
and Canada to U.S. and Canadian Persons, and the international prospectus, to be
used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus" (including,
in the case of all references to the Registration Statement or the Prospectus,
unless the context
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requires otherwise, documents incorporated by reference therein). The terms
"supplement" and "amendment" or "amend" as used in this Agreement shall include
all documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
deemed to be incorporated by reference in the Prospectus. If the Company has
filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or to the Company's
knowledge threatened by the Commission.
(b) (i)Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective,
did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder, and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph 1.(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to
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be so qualified or be in good standing would not, individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each of ▇▇▇▇▇▇ Guaranty Corporation ("▇▇▇▇▇▇ Guaranty") and
▇▇▇▇▇▇ Re Corporation ("▇▇▇▇▇▇ Re") (each a "Subsidiary" and collectively
the "Subsidiaries") has been duly incorporated, is validly existing as an
insurance corporation in good standing under the laws of the State of
Illinois, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
or otherwise authorized to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification or authorization, except to
the extent that the failure to be so qualified or authorized or be in good
standing would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The issued and outstanding shares of capital stock of the Company
have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or indirectly, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim.
(i) The shares of Voting Common Stock issuable upon conversion of the
outstanding shares of Nonvoting Common Stock have been duly authorized and
reserved for issuance upon such conversion and, when issued and delivered
upon such conversion in accordance with the Company's Amended and Restated
Certificate of Incorporation, will be validly issued, fully paid and
non-assessable, and the issuance of such shares of Voting Common Stock will
not be subject to any preemptive or similar rights.
(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
(i) any provision of applicable law, rule or regulation or (ii) the
certificate of incorporation or by-laws of the Company or any Subsidiary or
(iii) any agreement or other instrument binding upon the Company or any of
its subsidiaries, except for such contraventions which, individually or in
the aggregate, would not have a material
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adverse effect on the Company and its subsidiaries, taken as a whole, or
(iv) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Subsidiary, and all
consents, approvals, authorizations, registrations, filings or
qualifications of or with, any court or governmental body or agency
required for the execution and delivery by the Company of, the performance
by the Company of its obligations under, this Agreement have been obtained
and are in full force and effect, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of the Prospectus).
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or
affecting (i) the statutory capital or surplus of ▇▇▇▇▇▇ Guaranty or (ii)
the statutory capital or surplus of ▇▇▇▇▇▇ Re, in each case from that set
forth in its September 30, 1996 statutory quarterly financial statements
filed with applicable insurance regulatory authorities (the "Statutory
Financial Statements").
(m) There are no legal or governmental proceedings pending or to the
Company's knowledge threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated by reference as required.
(n) Each preliminary prospectus filed as part of the registration
statement on Form S-3 (No. 333-19757) relating to the Shares as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 or
Rule 462 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(o) Neither the Company nor any of the Subsidiaries is an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
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(p) The Company and its subsidiaries (i) 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"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) 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 be reasonably
expected to have, individually or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(q) Except for the Amended and Restated Shareholders Agreement among
the Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and each Investor set
forth on the signature pages thereof dated as of November 1, 1995 (the
"Stockholders Agreement"), there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant
to the Registration Statement.
(r) The Company and each of the Subsidiaries has all necessary
consents, licenses, authorizations, approvals, orders, certificates and
permits (collectively, "Authorizations") of and from, and has made all
declarations, registrations and filings (collectively, "Filings") with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to rent,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus except to the extent
that the failure to obtain any such Authorizations or to make any such
Filing has not had, and would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(s) None of the Company or any Subsidiaries is (i) in violation of
its certificate or articles of incorporation or by-laws, or (ii) in
violation of any law, rule or regulation applicable to the Company or any
Subsidiary or any of its or their properties, the violation of which has,
or would be reasonably expected to have, individually or in the aggregate,
a material adverse effect on the Company and its subsidiaries, taken as a
whole, or (iii) in violation of any judgment, injunction, order or decree
of any court, governmental agency or body or arbitrator having jurisdiction
over the Company or any Subsidiary, the violation of which has, or would be
reasonably expected to have, individually or in the aggregate, a material
adverse effect on the Company and its subsidiaries, taken as a whole, or
(iv) in default in the
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performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of its or their properties
is or may be bound, the default in the performance of which has, or would
have, individually or in the aggregate, a material adverse effect on the
Company and its subsidiaries, taken as a whole, or (v) in violation of or
in default under any Authorization or Filing which violation or default
has, or would be reasonably expected to have, individually or in the
aggregate, a material adverse effect, as a whole.
(t) None of the Company's outstanding securities are rated by any
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act, and ▇▇▇▇▇▇
Re has not received any rating (or preliminary rating) from ▇▇▇▇▇'▇
Investors Service or Standard and Poor's Rating Service.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each of
the Selling Shareholders, severally and not jointly with the other Selling
Shareholders, represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Shareholder.
(b) Assuming the accuracy of the Company's representations in Section
1.(a) and 1.(b), the execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations under,
this Agreement and the Irrevocable Power of Attorney and Custody Agreement
(the "Power of Attorney and Custody Agreement") among such Selling
Shareholder, ___________, as custodian (the "Custodian"), and certain
individuals as attorneys-in-fact, relating to (i) the deposit of the Shares
to be sold by such Selling Shareholder and appointing certain individuals
as such Selling Shareholder's attorneys-in-fact to the extent set forth
therein relating to the transactions contemplated hereby and by the
Registration Statement will not contravene any provision of applicable law
(except that no representation is made with respect to any state securities
law or Blue Sky law or any foreign law), or the certificate of
incorporation or by-laws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or any material agreement or other material
instrument binding upon such Selling Shareholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by such Selling Shareholder of its obligations under this
Agreement or the Power of Attorney and Custody Agreement of such Selling
Shareholder, except such as may be
7
required by the securities or Blue Sky laws of the various states or
foreign law in connection with the offer and sale of the Shares.
(c) On the date hereof, such Selling Shareholder has valid title to
the Shares to be sold by such Selling Shareholder, or to shares of
Nonvoting Common Stock that are to be converted into such Shares; as of the
Closing Date and the Option Closing Date, if any (each as hereinafter
defined), such Selling Shareholder will have valid title to the Shares to
be sold by such Selling Shareholder hereunder on such date (including any
Shares issued upon conversion of Nonvoting Common Stock) and as of each
such date has, or will have, the legal right and power, and, assuming the
accuracy of the Company's representations in Section 1.(a) and 1.(b), all
authorization and approval required by law, to enter into this Agreement or
the Power of Attorney and Custody Agreement of such Selling Shareholder and
to sell, transfer and deliver the Shares to be sold by such Selling
Shareholder.
(d) The Power of Attorney and Custody Agreement signed by such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder.
(e) Delivery of, and payment for, the Shares to be sold by such
Selling Shareholder pursuant to this Agreement will pass marketable title
the Underwriters with respect to such Shares free and clear of any security
interests, claims, liens, equities and other encumbrances.
(f) All information furnished by or on behalf of such Selling
Shareholder for use in the Registration Statement and Prospectus is, and on
the Closing Date (and the Option Closing Date, if any) will be, true,
correct, and complete, and does not, and on the Closing Date (and the
Option Closing Date, if any) will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading.
3. AGREEMENTS TO SELL AND PURCHASE. Each Selling Shareholder, severally
and not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Selling Shareholder at $____ a share (the
"Purchase Price"), the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by such Selling Shareholder as the
number of Firm Shares set forth in Schedule II or Schedule III hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Selling Shareholder
agrees, severally and not jointly,
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to sell to the U.S. Underwriters the number of Additional Shares set forth
opposite such Selling Shareholder's name in Schedule I hereto under the heading
"Number of Additional Shares To Be Sold," and the U.S. Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 637,500 Additional
Shares at the Purchase Price. If the U.S. Representatives, on behalf of the
U.S. Underwriters, elect to exercise such option, the U.S. Representatives shall
so notify the Company and the Selling Shareholders in writing not later than 30
days after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased which date shall be subject to the approval of
the Company, such approval not to be unreasonably withheld. Such date may be
the same as the Closing Date but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares. The Additional Shares to
be purchased by the U.S. Underwriters hereunder and the U.S. Firm Shares are
hereinafter referred to as "U.S. Shares."
The Company covenants and agrees that this Agreement constitutes the notice
required on behalf of each Selling Shareholder by Article Fourth, Section
A(4)(C) of the Amended and Restated Certificate of Incorporation of the Company,
on behalf of such Selling Shareholder, to convert into Voting Common Stock, as
of the Closing Date or the Option Closing Date, that number of shares of
Nonvoting Common Stock equal to the lesser of (i) the number of shares of
Nonvoting Common Stock held by such Selling Shareholder at such time and (ii)
the number of Firm Shares or Additional Shares, as applicable, to be sold by
such Selling Shareholder hereunder on such date, and that such conversion shall
be effective on and as of the Closing Date or the Option Closing Date, as
applicable, and that the Company will deliver such shares of Voting Common Stock
to the Underwriters on and as of the Closing Date or the Option Closing Date, as
the case may be.
The Company hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are now owned by the
Company or are hereafter acquired) or (ii) enter into any swap or other
agreement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery
9
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the issuance by the Company of any shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the U.S. Representatives have
been advised in writing or (B) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of the
Company, including, without limitation, the Company's Stock Incentive Plan (as
defined in the Prospectus).
4. TERMS OF PUBLIC OFFERING. The Company and the Selling Shareholders
are advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Company and the Selling Shareholders are further advised by you that the Shares
are to be offered to the public initially at $____ a share (the "Public Offering
Price") and to certain dealers selected by you at a price that represents a
concession not in excess of $___ a share under the Public Offering Price, and
that any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of $____ a share, to any Underwriter or to certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold by each
Selling Shareholder shall be made to such Selling Shareholder in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 10:00 A.M.,
New York City time, on February __, 1997, or at such other time on the same or
such other date, not later than February __, 1997, as shall be designated in
writing by you. The time and date of each such payment are hereinafter referred
to as the "Closing Date."
Payment for any Additional Shares to be sold by each Selling Shareholder
shall be made to such Selling Shareholder in Federal or other funds immediately
available in New York City against delivery of such Additional Shares for the
respective accounts of the several U.S. Underwriters at 10:00 A.M., New York
City time, on the date specified in the notice described in Section 3 or at such
other time on the same or on such other date, in any event not later than March
__, 1997, as shall be designated in writing by the U.S. Representatives in
accordance with Section 3 of this Agreement. The time and date of such payment
are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid by
the applicable Selling Shareholder, against payment of the Purchase Price
therefor.
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6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Selling Shareholders to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 4:30 p.m. (New York time) on the date
hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no
proceedings therefor shall have been instituted or threatened by the
Commission.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) no downgrading shall have occurred in any rating (or
preliminary rating) of ▇▇▇▇▇▇ Guaranty by ▇▇▇▇▇'▇ Investor Service or
Standard & Poor's Rating Service and no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, any such rating; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, (A) in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of the Prospectus) or (B) in the statutory
capital or surplus of ▇▇▇▇▇▇ Guaranty or the statutory capital or
surplus of ▇▇▇▇▇▇ Re, in each case from that set forth in the
Statutory Financial Statements, that, in any such case, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in clauses (a) and (b)(i) of this Section 6 and
to the effect that: (x) the representations and warranties of the Company
contained herein are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed hereunder on or before the Closing Date
and (y) there has not occurred any material adverse change, or any development
involving a prospective material adverse change, (A) in the condition, financial
or otherwise, or in the earnings, business or operations, of the Company and
11
its subsidiaries, taken as a whole, from that set forth in the Prospectus
or (B) in the statutory capital or surplus of ▇▇▇▇▇▇ Guaranty or the
statutory capital or surplus of ▇▇▇▇▇▇ Re, in each case from that set forth
in the Statutory Financial Statements.
The officer signing and delivering such certificate may rely upon his
knowledge as to proceedings threatened.
(d) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus;
(ii) the authorized capital stock of the Company is as set forth
under the caption "Capitalization" in the Prospectus, and the Common
Stock of the Company conforms in all material respects as to legal
matters to the description thereof set forth under the caption
"Description of Capital Stock" in the Prospectus;
(iii) the outstanding shares of Common Stock of the Company have
been duly authorized and are validly issued, fully paid and
non-assessable;
(iv) the shares of Voting Common Stock issuable upon conversion
of the outstanding shares of Nonvoting Common Stock have been duly
authorized and reserved for issuance upon such conversion and, when
issued and delivered upon such conversion in accordance with the
Company's Amended and Restated Certificate of Incorporation, will be
validly issued, fully paid and non-assessable, and the issuance of
such shares of Voting Common Stock will not be subject to any
statutory or contractual preemptive or similar rights;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene (A) any provision of applicable law, rule or
regulation, or (B) the certificate of incorporation or by-laws of the
Company, or (C) any agreement or other instrument binding upon the
Company known to such counsel that is material to the Company and its
subsidiaries, taken as a whole, except for
12
such contraventions which, individually or in the aggregate, do not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole or (D) any judgment, order or decree known to such counsel of any
governmental body, agency or court having jurisdiction over the Company;
and all consents, approvals, authorizations, registrations or filings or
qualifications of or with, any court or governmental body or agency
required for the execution and delivery by the Company of, the performance
by the Company of its obligations under, and the consummation of the
transactions contemplated by, this Agreement have been obtained and are in
full force and effect, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale
of the Shares;
(vii) the statements in the Prospectus under the captions
"Description of Capital Stock" and "Certain U.S. Federal Income Tax
Consequences," insofar as such statements constitute summaries of the legal
matters or documents referred to therein, are accurate in all material
respects;
(viii) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(ix) neither the Company nor any Subsidiary is an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended;
and
(x) such counsel (A) is of the opinion that each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements, financial schedules and other
financial data included therein as to which such counsel need not express
any opinion) complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (B) is of the opinion that the Registration
Statement and Prospectus (except for financial statements, financial
schedules and other financial data included or incorporated by reference
therein as to which such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (C) has no reason to
believe that (except for the operating statistics, financial statements,
financial schedules and other financial and statistical information
included or incorporated by reference therein, as to which such counsel
need not express any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (D) has no reason to believe that
(except for the
13
operating statistics, financial statements, financial schedules and other
financial and statistical information included or incorporated by reference
therein, as to which such counsel need not express any belief) the
Prospectus contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(e) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, General Counsel for the Company, dated the Closing Date,
to the effect that:
(i) the Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not, individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(ii) each Subsidiary has been duly incorporated, is validly existing
as an insurance corporation in good standing under the laws of the State of
Illinois, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
or otherwise authorized to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification or authorization, except to
the extent that the failure to be so qualified or authorized or be in good
standing would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole; and
all of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, and, to such counsel's knowledge, are owned of record by the
Company, directly or indirectly, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim;
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not
14
contravene (A) any provision of applicable law, rule or regulation, or (B)
the certificate of incorporation or by-laws of the Company or any
Subsidiary or (C) any agreement or other instrument binding upon the
Company or any Subsidiary known to such counsel that is material to the
Company and its subsidiaries, taken as a whole, except for such
contraventions which, individually or in the aggregate, do not have a
material adverse effect on the Company and its subsidiaries taken as a
whole or (D) any judgment, order or decree known to such counsel of any
governmental body, agency or court having jurisdiction over the Company or
any Subsidiary; and all consents, approvals, authorizations, registrations
or filings or qualifications of or with, any court or governmental body or
agency required for the execution and delivery by the Company of, the
performance by the Company of its obligations under, and the consummation
of the transactions contemplated by, this Agreement have been obtained and
are in full force and effect, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares;
(iv) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described;
(v) the Company and each of the Subsidiaries has all necessary
Authorizations of and from, and has made all Filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals to own, lease, license and
use its properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain such Authorizations or to make any such Filing does not have, and
would not reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(vi) no record owner, or to such counsel's knowledge, beneficial
owner, of any security of the Company has any right, not effectively
satisfied or waived, to require inclusion of shares of Common Stock or any
other security of the Company in the Registration Statement or to require
the Company to file a registration statement under the Securities Act as a
result of the filing of the Registration Statement; and
(vii) such counsel (A) has no reason to believe that (except for
the operating statistics, financial statements, financial schedules and
other financial and statistical information included or incorporated by
reference therein, as to
15
which such counsel need not express any belief) the Registration Statement
and the prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (B) has no reason to
believe that (except for the operating statistics, financial statements,
financial schedules and other financial and statistical information
included or incorporated by reference therein, as to which such counsel
need not express any belief) the Prospectus contains any untrue statement
of a material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(f) The Underwriters shall have received on the Closing Date an opinion of
Lord, Bissell & Brook, special insurance counsel to the Company, dated the
Closing Date to the effect that:
(i) the Company and each of the Subsidiaries have all necessary
Authorizations of and from, and have made all Filings with, insurance
regulatory agencies and authorities to own, lease, license and use its
properties and assets and to conduct their business in the manner described
in the Prospectus, except to the extent that the failure to obtain such
Authorizations or to make any such Filing do not have, and would not
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of insurance law, rule or regulation applicable to the
Company or the Subsidiaries, except for such contraventions which,
individually or in the aggregate, do not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, and all consents,
approvals, authorizations, registrations, filings or qualifications of or
with any insurance regulatory agency or body required for the execution and
delivery by the Company of, the performance by the Company of its
obligations under, and the consummation of the transactions contemplated
by, this Agreement have been obtained and are in full force and effect; and
(iii) the statements in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Statutory Capital and Dividend Capacity of ▇▇▇▇▇▇
Guaranty--Dividend Limitations" and "Business--Regulation" insofar as such
statements constitute summaries of the legal matters referred to therein
are
16
accurate in all material respects and fairly summarize in all material
respects the matters referred to therein.
(g) The Underwriters shall have received on the Closing Date an opinion of
counsel for each of the Selling Shareholders, which counsel or counsels shall be
reasonably acceptable to counsel for the U.S. Underwriters, dated the Closing
Date, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Shareholder;
(ii) the execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement and the Power of Attorney and Custody Agreement of such Selling
Shareholder will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon such
Selling Shareholder or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by such Selling Shareholder of its obligations under this
Agreement or the Power of Attorney and Custody Agreement of such Selling
Shareholder, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares;
(iii) such Selling Shareholder has the legal right and power, and
all authorization and approval required by law, to enter into this
Agreement and the Power of Attorney and Custody Agreement of such Selling
Shareholder and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder;
(iv) the Power of Attorney and Custody Agreement of such Selling
Shareholder has been duly authorized, executed and delivered by such
Selling Shareholder and is a valid and binding agreement of such Selling
Shareholder; and
(v) such Selling Shareholder has record ownership and, to such
counsel's knowledge, beneficial ownership of the Shares to be sold by such
Selling Shareholder to the Underwriters pursuant to this Agreement, and,
assuming that the Underwriters are "bona fide purchasers" (as defined under
Section 8-302 of the New York Uniform Commercial Code), upon delivery
17
of the certificates for any Shares to be sold against payment
therefor, the Underwriters will acquire valid marketable title to such
Shares, free and clear of any security interest or "adverse claims"
within the meaning of Section 8-302 of the New York Uniform Commercial
Code.
(h) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in subparagraph (v) and
clauses (B), (C) and (D) of subparagraph (x) of paragraph (d) above and to
the further effect that the statements in the Prospectus under the caption
"Underwriters" insofar as such statements constitute a summary of the
documents referred to therein fairly present the information called for
with respect to such documents and fairly summarize the matters referred to
therein.
With respect to subparagraph (x) of paragraph (d) above, ▇▇▇▇▇, Day, ▇▇▇▇▇▇
& ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto (in the case of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇, other than documents incorporated by reference therein) and
review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified. In rendering the opinions set forth in
subparagraph (vi) of paragraph (d) above, ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ may state,
and in rendering the opinions set forth in subparagraphs (iii) and (v) of
paragraph (e) above, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ may state, that no opinion is
expressed with respect to insurance laws, rules and regulations to the extent
that the opinion required by such subparagraphs are covered by the opinion
delivered pursuant to paragraph (f) above. In rendering the opinions set forth
in paragraph (f) above, Lord, Bissell & Brook may state that it has not
independently verified and is not passing upon, and does not assume any
responsibility for the accuracy, completeness, or fairness of the information
contained in the Registration Statement and the Prospectus except as set forth
in subparagraph (iii) of paragraph (f) above.
The opinions of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Lord,
Bissell & Brook and each of the counsel to the Selling Shareholders described in
paragraphs (d), (e), (f) and (g) above shall be rendered to the Underwriters at
the request of the Company or the Selling Shareholder or Selling Shareholders on
whose behalf the respective opinion is being given, as the case may be, and
shall so state therein.
(i) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration
18
Statement and the Prospectus; PROVIDED that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date hereof.
(j) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between the Underwriters, the Selling Shareholders and
each of the executive officers and directors of the Company relating to
sales and certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof, shall be
in full force and effect on the Closing Date.
(k) The Shares have been approved for quotation on the Nasdaq
National Market.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to satisfaction on and as of the Option Closing
Date of the conditions set forth in paragraphs (a)-(k) above, except that the
opinions called for in paragraphs (d), (e), (f) and (g), and the letter called
for in paragraph (i) and the certificate called for by paragraph (c) shall be
revised to reflect the sale of the Additional Shares and dated the Option
Closing Date.
7. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to the U.S. Representatives and International
Representatives, without charge, four signed copies of the Registration
Statement (including exhibits and documents incorporated by reference) and
for delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits but including documents incorporated by
reference) and to furnish to you in New York City, without charge, prior to
10:00 A.M. local time on the business day next succeeding the date of this
Agreement and during the period mentioned in paragraph (c) below, as many
copies of the Prospectus and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event
19
shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which Shares
may have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that the Company shall not be required to consent to
general service of process in any jurisdiction in which the Company may not
already be so subject.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 1998 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, excluding any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky
memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in
Section 7.(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky memorandum, (iv) all
filing fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the Offering by the
National Association of Securities Dealers, Inc., (v) all costs and
expenses
20
incident to listing the Shares on The Nasdaq National Market, (vi) the cost
of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Offering, which
for this purpose shall include expenses associated with the production of
road show slides and graphics, travel, lodging and meal expense of the
representatives and officers of the Company (but not of the Underwriters),
expenses for room rental and food and beverages for investor presentations,
and, if the Company shall agree in advance, for a portion of the cost
associated with the chartering of aircraft in connection with the road show
based on the number of officers and representatives of the Company
utilizing such aircraft compared to the total number of passengers using
such aircraft, (ix) the filing of trade reports in the provinces of Canada,
if any, including filing fees and disbursements of Canadian counsel to the
underwriters in connection therewith, (x) reasonable fees and expenses of
one counsel (who shall be reasonably acceptable to the Company) for the
Selling Shareholders selected by Selling Shareholders holding the majority
of the Shares (including shares of Nonvoting Common Stock to be converted
into Shares), and (xi) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 9 entitled "Indemnity and
Contribution," and the last paragraph of Section 11 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements
of their counsel, stock transfer taxes payable on resale of any of the
Shares by them, and any advertising expenses connected with any offers they
may make. The Company shall have no obligation to pay any underwriting
fees, discounts or commissions attributable to the sale of the Shares, any
taxes on the transfer and sale of the Shares, or any out-of-pocket expenses
of the Selling Shareholders (or the agents who manage their accounts).
8. COVENANTS OF SELLING SHAREHOLDERS. Each Selling Shareholder agrees,
severally and not jointly, to pay or cause to be paid (i) all taxes, if any, on
the transfer and sale of the Shares being sold by such Selling Shareholder
hereunder and in connection with the conversion of shares of Nonvoting Common
Stock into Shares by such Selling Shareholder, (ii) all out-of-pocket expenses,
if any, of such Selling Shareholder or any agent of such Selling Shareholder and
(iii) except as provided in Section 7.(f) and the Stockholders Agreement, all
fees of counsel to such Selling Shareholder.
9. INDEMNITY 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 either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
by any Underwriter or any such controlling person in connection with defending
or
21
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein; PROVIDED, HOWEVER, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, to
the extent and 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 or the Prospectus in reliance upon, and in
conformity with, information relating to such Selling Shareholder furnished to
the Company in writing by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus;
PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so
22
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities. Notwithstanding any other provision of this
Section 9, the liability of each Selling Shareholder to the Underwriters shall
not exceed the net amount received by each such Selling Shareholder (after
deducting any underwriting discount) from the sale of the Shares pursuant to
this Agreement.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to any of paragraphs (a) through (c) of this Section 9, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall assume the defense thereof and shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding,
it being understood that any delay or failure by the indemnified party to
provide such written notification shall only relieve the indemnifying party from
its indemnification obligations hereunder to the extent it is prejudiced by such
delay or failure. In any such proceeding, any indemnified party shall have the
right to retain its own counsel and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, (ii) the indemnifying party
shall have failed to assume the defense or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them (in which case the indemnifying party shall not have the right to assume
the defense of such action or proceeding on behalf of the indemnified party).
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (b) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company,
23
its directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company (other than The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity
Fund II, L.P. ("MSLEF II"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, Inc. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group Inc.) within the meaning of either such Section, (c) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Selling Shareholders (other than MSLEF II) and all persons, if
any, who control any Selling Shareholder (other than MSLEF II) within the
meaning of either such Section and (d) the fees and expenses of more than one
separate firm (in addition to any local counsel) for MSLEF II and all persons,
if any, who control MSLEF II within the meaning of either such Section, and that
all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Underwriters and such control persons of
Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders (other than MSLEF II) and such controlling persons of
Selling Shareholders (other than MSLEF II), such firm shall be designated in
writing by the Selling Shareholders (other than MSLEF II) selling the majority
of the amount of shares sold by the Selling Shareholders (other than MSLEF II)
under this Agreement. In the case of any such separate firm for MSLEF II and
any controlling person of MSLEF II, such firm shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, Inc.
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request (or, if within 30 days of the
receipt by the indemnifying party of the aforesaid request, the indemnifying
party shall have made a good faith written challenge to the reasonableness of
the amount or nature of the reimbursement requested (which challenge shall
specifically set forth the amount or nature of the requested reimbursement which
the indemnifying party in good faith believes to be unreasonable, including as a
result of the reimbursement being in good faith believed to be insufficiently
documented), then such indemnifying party shall not have reimbursed the
indemnified party the amount which is not being so challenged) prior to the date
of such settlement. 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
24
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(e) To the extent the indemnification provided for in any of paragraphs
(a) through (c) of this Section 9 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, 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 indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand 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 relative benefits received by each
Selling Shareholder and the Company, on the one hand, and the Underwriters on
the other hand, in connection with the offering of the Shares shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of the Shares received by the Selling Shareholders (after deducting any
underwriting discounts but before deducting expenses) and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares; PROVIDED that for the purpose of this sentence,
the Company's benefit shall be deemed to be the net amount received (after
deducting any underwriting discounts but before deducting expenses) by the
Selling Shareholders. The relative fault of the Company, each Selling
Shareholder 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, each Selling Shareholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 9
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(f) The Company, the Selling Shareholders and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Section 9
were determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (e) of
this Section 9. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, (i)
25
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (ii)
no Selling Shareholder shall be required to contribute any amount in excess of
the amount by which the net amount received by such Selling Shareholder (after
deducting any underwriting discount) from the sale of the Shares pursuant to
this Agreement exceeds the amount of any damages that such Selling Shareholder
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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter, by
or on behalf of any Selling Shareholder or any person controlling any Selling
Shareholder or by or on behalf of the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Shares..
(h) The provisions of Sections 5.6 through 5.9 of the Stockholders
Agreement shall govern, as among the Company and the Selling Shareholders,
rights to indemnification and contribution.
10. TERMINATION. This Agreement shall be subject to termination, in your
absolute discretion, by notice given by you to the Company, if (a) after the
execution and delivery of this Agreement and prior to the 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, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (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 shall have been declared
by either federal or New York 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 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 judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
26
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of 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 the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II or Schedule III bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; PROVIDED that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, 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 to be purchased, and arrangements satisfactory
to you, the Company and the Selling Shareholders for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Shareholders. In any such case either you or the
relevant Selling Shareholders 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 in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or any Selling
Shareholder to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or any Selling Shareholder shall be
unable to perform its obligations under this Agreement, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
27
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
▇▇▇▇▇▇ CORPORATION
By _____________________________
Name:
Title:
The Selling Shareholders
named in Schedule I attached
hereto, acting severally
By _____________________________
Name:
Attorney-in-Fact
By _____________________________
Name:
Attorney-in-Fact
28
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Acting severally on behalf
of themselves and the
several U.S. Underwriters named
in Schedule II attached hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
By ________________________________
Name:
Title:
29
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL
LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇ SECURITIES LTD.
Acting severally on behalf
of themselves and the several
International Underwriters named
in Schedule III attached hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited
By____________________________
Name:
Title:
30
SCHEDULE I
Number of
Number of Firm Additional
Shares Shares To Be
Selling Shareholder To Be Sold Sold
------------------- --------------- ------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II,
Inc., as General Partner of The ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Leveraged Equity Fund II, L.P. 1,639,278 245,892
▇.▇. ▇▇▇▇▇▇ Capital Corporation 526,425 78,964
Mellon Bank, N.A., as Trustee for First
Plaza Group Trust 565,649 84,847
Aetna Life Insurance Company 537,387 80,608
Leeway & Co. 287,425 43,114
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 147,515 78,452
▇▇▇▇▇▇▇▇ Family Foundation 45,000 0
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Charitable
Remainder Unitrust of 1997 160,000 0
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Charitable
Remainder Unitrust of 1997 160,000 0
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ 1989 Trust 3,500 0
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 3,500 0
▇▇▇▇▇▇ ▇. ▇▇▇▇ 3,500 0
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 125,821 25,623
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Charitable
Remainder Annuity Trust 45,000 0
--------- --------
Total 4,250,000 637,500
--------- --------
--------- --------
SCHEDULE II
Number of
Firm Shares
To Be
U.S. Underwriter Purchased
---------------- -----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Inc.
-----------
Total 3,400,000
-----------
-----------
SCHEDULE III
Number of
Firm Shares
To Be
International Underwriter Purchased
------------------------- ------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Credit Suisse First Boston (Europe) Limited
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Ltd.
-----------
Total 350,000
-----------
-----------
Exhibit A
[Form of Lock-Up Contract]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as representatives of the several
U.S. Underwriters named in the
Underwriting Agreement referred
to below
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Credit Suisse First Boston (Europe) Limited
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇.▇. ▇▇▇▇▇▇ Securities Ltd.
as representatives of the several
International Underwriters named in
the Underwriting Agreement referred
to below
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇ Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Dear Sirs:
The undersigned understands that ▇▇▇▇▇▇ Corporation, a Delaware
corporation (the "Company"), proposes to enter into an Underwriting Agreement
with certain
A-1
stockholders of the Company [including the undersigned] 1, providing for the
public offering (the "Public Offering") by the several Underwriters named
therein, including yourselves, of 4,250,000 shares (the "Shares") of the Common
Stock (par value $.01 per share) of the Company (the "Common Stock"). Unless
otherwise defined herein, capitalized terms used herein have the meaning set
forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Shares, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of each of the U.S. Representatives, in the
case of The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, L.P., or of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated in all other cases on behalf of the Underwriters, it will
not, during the period ending 90 days after the date of the Prospectus (as
defined in the Underwriting Agreement), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or any such securities are now owned by the undersigned or
are hereafter acquired), or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. In addition, the undersigned agrees that,
without the prior written consent of the U.S. Representatives, in the case of
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II, L.P., or of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated in all other cases on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
Very truly yours,
[NAME]
By:_______________________________
Name:
Title:
_______________________
1 Delete if undersigned is not a Selling Shareholder.
A-2
Accepted as of the date
first set forth above:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
As Representatives of the several
U.S. Underwriters
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:__________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL
LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇ SECURITIES LTD.
As Representatives of the several
International Underwriters
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International
Limited
By:___________________________________
Name:
Title:
A-3