EXHIBIT 1.1
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON, INC.
2,300,000 Shares*
Common Stock
($0.01 par value per share)
----------------------
Underwriting Agreement
[__________], 2004
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Underwriters named in Schedule I hereto (collectively, the
"Underwriters") an aggregate of 1,000,000 shares and, at the election of the
Underwriters, up to 150,000 additional shares of Common Stock, par value $.01
per share, of the Company (the "Common Stock"), and the stockholders of the
Company named in Schedule II hereto (the "Selling Stockholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of 1,000,000 shares and, at the election of the Underwriters, up to
150,000 additional shares of Common Stock (as and to the extent indicated in
Schedule II hereto). The aggregate of 2,000,000 shares to be sold by the Company
and the Selling Stockholders is herein called the "Firm Shares" and the
aggregate of 300,000 additional shares to be sold by the Company and certain
Selling Stockholders is herein called the "Optional Shares." The Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
3 hereof are herein collectively called the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-112221)
(the "Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement including any pre-effective amendments thereto and any
post-effective amendments thereto, each in the form heretofore delivered to you
and, excluding exhibits thereto, but including all documents incorporated by
reference in the prospectus contained therein, delivered to you for each of the
other Underwriters, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed
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* Includes 300,000 shares subject to an option to purchase additional
shares to cover over-allotments.
with the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge, threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits to the
foregoing (including any exhibits incorporated by reference), and including (i)
the information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or the Rule 462(b)
Registration Statement, if any, at the time it became effective and (ii) the
documents incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective, each as amended at the time such part of such
Initial Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be;
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. expressly for use therein or by
a Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material respects to
the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder, 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 not misleading;
(d) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date and the applicable
Time of Delivery (as hereinafter defined) as to the Prospectus and any amendment
or supplement
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thereto contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or, in the case of the Registration
Statement or any amendment thereto, necessary to make the statements therein not
misleading and, in the case of the Preliminary Prospectus, the Prospectus or any
supplement thereto, necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
expressly for use therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Item 7 of Form S-3;
(e) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and regulations thereunder
which have not been described in, filed as exhibits to, or incorporated by
reference in the Registration Statement, as required; the contracts so described
in the Prospectus to which the Company or any of its subsidiaries is a party
have been duly authorized, executed and delivered by the Company or its
subsidiaries, constitute valid and binding agreements of the Company or its
subsidiaries and are enforceable against the Company or its subsidiaries in
accordance with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws in effect which affect the enforcement of
creditors' rights generally, (ii) general principles of equity, whether
considered in a proceeding at law or in equity and (iii) state or federal
securities laws or policies relating to the non-enforceability of the
indemnification provisions contained therein, and, to the Company's knowledge,
such contracts are enforceable in accordance with their respective terms by the
Company against the other parties thereto, except as such enforceability may be
limited by (x) applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws in effect which affect the enforcement of
creditors' rights generally, (y) general principles of equity, whether
considered in a proceeding at law or in equity and (z) state or federal
securities laws or policies relating to the non-enforceability of the
indemnification provisions contained therein, and such contracts are in full
force and effect on the date hereof; and neither the Company nor any of its
subsidiaries, nor, to the best of the Company's knowledge, any other party
thereto, is in breach of or default under any of such contracts, except for such
breaches or defaults that will not result in a material adverse change in the
business, assets, management, financial position or results of operations of the
Company and its subsidiaries taken as a whole (hereinafter, a "Material Adverse
Change");
(f) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, that is in each case material to the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there has not been any change in
the capital stock (other than issuances of Common Stock pursuant to Company
stock option plans described in the Registration Statement and Prospectus or
issuances of Common Stock upon the conversion of Class A Common Stock, par value
$.01 per share, of
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the Company (the "Class A Common Stock")) or long-term debt of the Company or
any of its subsidiaries or any Material Adverse Change, and (ii) the Company or
its subsidiaries have not entered into material transaction or incurred any
material obligation outside of the ordinary course of business, otherwise than
as set forth in the Prospectus;
(g) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
other tangible properties and assets described in the Prospectus as owned by it,
in each case free and clear of all liens, charges, claims, encumbrances or
restrictions, except such as (i) are described in the Prospectus or (ii) do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; any real property and buildings held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and its subsidiaries; the Company and its subsidiaries own or lease all such
properties as are necessary to its operations as now conducted or as proposed to
be conducted, except where the failure to so own or lease would not result in a
Material Adverse Change;
(h) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its respective jurisdiction of organization, each with full power and
authority (corporate and otherwise) to own its properties and conduct its
business as described in the Prospectus, and each has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except where the
failure to be so qualified or in good standing would not result in a Material
Adverse Change;
(i) The Company has an authorized capitalization as set forth in
the Prospectus, and all the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the descriptions thereof contained or incorporated by reference
in the Prospectus; all of the issued shares of capital stock of each subsidiary
of the Company (i) have been duly and validly authorized and issued, are fully
paid and non-assessable and (ii) except as disclosed in the Prospectus, are
owned directly by the Company, free and clear of all liens, encumbrances,
equities or claims; except as disclosed in or contemplated by the Prospectus and
the consolidated financial statements of the Company, and the related notes
thereto, included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations; and the
description of the Company's stock option and stock purchase plans and the
options or other rights granted and exercised thereunder set forth in the
Prospectus accurately and fairly presents in all material respects the
information required by the Act and the published rules and regulations of the
Commission thereunder to be shown with respect to such plans, options and
rights;
(j) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered
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against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable and will conform to the description of the Common
Stock contained or incorporated by reference in the Prospectus; no preemptive
rights or other rights to subscribe for or purchase exist with respect to the
issuance and sale of the Shares by the Company pursuant to this Agreement; no
stockholder of the Company has any right, which has not been waived, to require
the Company to register the sale of any shares of capital stock owned by such
stockholder under the Act in the public offering contemplated by this Agreement;
and no further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein;
(k) The Company has full corporate power and authority to enter
into this Agreement; and this Agreement has been duly authorized, executed and
delivered by the Company, constitutes a valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or similar laws in
effect which affect the enforcement of creditors' rights generally, (ii) general
principles of equity, whether considered in a proceeding at law or in equity and
(iii) state or federal securities laws or policies relating to the
non-enforceability of the indemnification provisions contained herein;
(l) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or material instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for any conflict, breach,
violation or default that would not result in a Material Adverse Change, nor
will any such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company as currently in effect or
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any
of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws or the bylaws and rules of the National Association
of Securities Dealers, Inc. ("NASD") in connection with the purchase and
distribution of the Shares by the Underwriters;
(m) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened to which the Company or any of its subsidiaries
is or may be a party or of which property owned or leased by the Company or any
of its subsidiaries is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings, would reasonably be
expected, individually or in the aggregate, to prevent or adversely affect the
transactions
5
contemplated by this Agreement or result in a Material Adverse Change; no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or, to the knowledge of the Company, is imminent that would reasonably be
expected to result in a Material Adverse Change; and neither the Company nor any
of its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body, that would reasonably be
expected to result in a Material Adverse Change;
(n) The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate governmental
or regulatory agencies or authorities that are necessary to enable them to own,
lease and operate their respective properties and to carry on their respective
businesses as presently conducted, except where the failure to possess such
licenses, certificates, authorization or permits would not reasonably be
expected to result in a Material Adverse Change; and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority or permit
which, singly or in the aggregate, would reasonably be expected to result in a
Material Adverse Change;
(o) The Company and its subsidiaries (i) are in compliance in all
material respects with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
including, without limitation, those relating to occupational safety and health,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants, including, without limitation, those relating to the storage,
handling or transportation of hazardous or toxic materials (collectively,
"Environmental Laws") and (ii) 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, reasonably be
expected to result in a Material Adverse Change. The Company, in its reasonable
judgment, has concluded that any costs or liabilities associated with
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, any related constraints
on operating activities and any potential liabilities to third parties) would
not, singly or in the aggregate, reasonably be expected to result in a Material
Adverse Change;
(p) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder,
and have been appointed by an Audit Committee of the Board of Directors
comprised entirely of independent directors;
(q) The consolidated financial statements and schedules of the
Company, and the related notes thereto, included or incorporated by reference in
the Registration Statement and the Prospectus present fairly in all material
respects the financial position of the Company as of the respective dates of
such financial statements and schedules, and the results of operations and cash
flows of the Company for the respective periods covered thereby; such
statements, schedules and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis as
certified by the independent public
6
accountants named in paragraph (p) above; no other financial statements or
schedules are required to be included or incorporated by reference in the
Registration Statement; and the selected financial data set forth in the
Prospectus under the captions "Capitalization," "Selected Consolidated Financial
Data" and "Prospectus Summary--Summary Consolidated Financial Data" fairly
present in all material respects the information set forth therein on the basis
stated in the Registration Statement;
(r) The Company owns, or possesses and/or has been granted valid
and enforceable licenses for, all registered patents, patent applications,
trademarks, trademark applications, tradenames, servicemarks and copyrights
necessary to the conduct of its business as such business is described in the
Prospectus (collectively, the "Registered Intellectual Property"). The expected
expiration of any of the Company's rights to the Registered Intellectual
Property would not, singly or in the aggregate, reasonably be expected to result
in a Material Adverse Change. The Company has no knowledge of any infringement
or misappropriation by third parties of any of the Registered Intellectual
Property, or any material inventions, manufacturing processes, formulae, trade
secrets, know-how, unregistered trademarks, and other intangible property and
assets necessary to the conduct of its business as such business is described in
the Prospectus (collectively, the "Other Intellectual Property," and together
with the Registered Intellectual Property, the "Intellectual Property"), nor is
there any pending or, to the best knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the Company's rights of title or
other interest in or to any Intellectual Property, except for such claims as
would not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Change, and the Company does not know of any facts which would
form a reasonable basis for any such claim. There is no pending or, to the best
knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the validity and scope of any Intellectual Property, except for such
claims as would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Change, and the Company does not know of any facts
which would form a reasonable basis for any such claim. There is no pending or,
to the best knowledge of the Company, threatened action, suit, proceeding or
claim by others that the Company or any of its products or processes or the
Intellectual Property infringe or otherwise violate any patent, trademark,
servicemark, copyright, trade secret or other proprietary right of others,
except for such claims as would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Change, and the Company is unaware of
any facts which would form a reasonable basis for any such claim. The Company is
not aware of (i) any grounds for an interference proceeding before the United
States Patent and Trademark Office in relation to any of the patents or patent
applications currently owned by the Company, or (ii) any facts which would bar
the grant of a patent from each of the patent applications described in the
Prospectus. There is no pending or, to the best knowledge of the Company,
threatened action, suit proceeding or claim by any current or former employee,
consultant or agent of the Company seeking either ownership rights to any
invention or other intellectual property right or compensation from the Company
for any invention or other intellectual property right made by such employee,
consultant or agent in the course of his/her employment with the Company or
otherwise. There is no act or omission by the Company or its agents or
representatives of which the Company has knowledge that may render any patent or
patent application within the Intellectual Property unpatentable, unenforceable
or invalid.
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(s) The Company and each of its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns, each of
which has been true and correct in all material respects, and have paid all
taxes shown as due thereon; and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the Company
or any of its subsidiaries which could reasonably be expected to result in a
Material Adverse Change;
(t) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(u) Each of the Company and its subsidiaries maintains insurance
of the types and in the amounts which it deems adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect;
(v) Neither the Company nor any of its subsidiaries has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any foreign, federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof;
(w) Other than exempted activity under Regulation M, the Company
has not taken and will not take, directly or indirectly through any of its
directors, officers or controlling persons, any action which is designed to or
which has constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(x) The Common Stock of the Company has been registered pursuant
to Section 12(g) of the Exchange Act and the Company is not required to take any
further action for the inclusion of the Shares on the Nasdaq National Market
(other than filing the Notification Form: Change in the Number of Shares
Outstanding with Nasdaq no later than 10 days after the issuance of the Shares);
and
(y) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect thereto.
8
2. Representations and Warranties of the Selling Stockholders. Each of
the Selling Stockholders severally represents and warrants to, and agrees with,
each of the Underwriters and the Company that:
(a) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this Agreement and
the Power of Attorney and the Custody Agreement hereinafter referred to, and for
the sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder;
(b) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling Stockholder if such
Selling Stockholder is a corporation, the Partnership Agreement of such Selling
Stockholder if such Selling Stockholder is a partnership, the Trust Agreement or
Declaration of Trust of such Selling Stockholder if such Selling Stockholder is
a trust, the Certificate of Formation or Limited Liability Company Agreement of
such Selling Stockholder if such Selling Stockholder is a limited liability
company, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling Stockholder or
the property of such Selling Stockholder;
(c) Such Selling Stockholder has, and immediately prior to each
Time of Delivery such Selling Stockholder will have, good and valid title to the
Shares to be sold by such Selling Stockholder hereunder, free and clear of all
liens, encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto, such Selling Stockholder will transfer to the
several Underwriters, good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims;
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares;
(e) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
expressly for use therein, such Preliminary Prospectus and the Registration
Statement did not, and the Prospectus and any further amendments or supplements
to the Registration Statement and the Prospectus, when they become effective or
are filed with
9
the Commission, as the case may be, and will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(f) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(g) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished to you (the
"Custody Agreement"), duly executed and delivered by such Selling Stockholder to
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc., as custodian (the "Custodian"), and such Selling
Stockholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you (the "Power of Attorney"), appointing the persons
indicated in Schedule II hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to execute and
deliver this Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling Stockholders as
provided in Section 3 hereof, to authorize the delivery of the Shares to be sold
by such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by this
Agreement and the Custody Agreement; and
(h) The Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder of
the Attorneys-in-Fact by the Power of Attorney, are irrevocable to the extent
provided thereunder, subject to the terms and conditions of this Agreement; the
obligations of the Selling Stockholders hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or incapacity of
any executor or trustee or the termination of such estate or trust, or in the
case of a partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such partnership
or corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Stockholders, subject
to and in accordance with, the terms and conditions of this Agreement and of the
Custody Agreements; and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
10
3. Shares Subject to Sale. On the basis of the representations,
warranties and agreements contained herein, and subject to the terms and
conditions of this Agreement:
(a) The Company and each of the Selling Stockholders agree,
severally and not jointly (in accordance with the allocation set forth in
Schedule II hereto), to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
each of the Selling Stockholders, at the First Time of Delivery, at a purchase
price per share of $[_____], the number of Firm Shares (to be adjusted by ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. so as to eliminate fractional shares) determined in each
case by multiplying the aggregate number of Shares to be sold by the Company and
each of the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm Shares to be purchased by such Underwriter as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the aggregate number of Firm Shares to be purchased by all of the Underwriters
from the Company and all of the Selling Stockholders hereunder; and
(b) In the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below, the Company
and certain of the Selling Stockholders (as and to the extent indicated in
Schedule II hereto) agree, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company and such Selling Stockholders, at the Second Time of
Delivery, at the purchase price per share set forth in clause (a) of this
Section 3, that number of Optional Shares determined by multiplying the number
of Optional Shares as to which such election shall have been exercised (to be
adjusted by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. so as to eliminate fractional shares)
by a fraction, the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company and certain Selling Stockholders, as and to the
extent indicated in Schedule II hereto, hereby grant, severally and not jointly,
to the Underwriters the right to purchase at their election up to 300,000
Optional Shares, at the purchase price per share set forth in clause (a) of this
Section 3, for the sole purpose of covering sales of shares in excess of the
number of Firm Shares. Any such election to purchase Optional Shares shall be
made in proportion to the maximum number of Optional Shares to be sold by the
Company and each Selling Stockholder as set forth in Schedule II hereto. Any
such election to purchase Optional Shares may be exercised only by written
notice (the "Election Notice") from ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. but in no event earlier than the First Time of Delivery
or, unless ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
4. Offering. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
11
5. Closing. Certificates in definitive form for the Shares to be
purchased by each Underwriter hereunder, and in such denominations and
registered in such names as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. may request upon at
least forty-eight hours' prior notice to the Company and the Selling
Stockholders, shall be delivered by or on behalf of the Company and the Selling
Stockholders to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of same day funds to the account
specified by the Company and the Custodian, as their interests may appear, all
at the office of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The time and date of such delivery and payment shall be,
with respect to the Firm Shares, 9:30 a.m., Boston time, on [__________], 2004
or such other time and date as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. and the Company may
agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m.,
Boston time, on the date specified by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. in the
Election Notice, or at such other time and date as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
and the Company may agree upon in writing. Such time and date for delivery of
the Firm Shares is herein called the "First Time of Delivery," such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to each
Time of Delivery at such location as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. may specify.
If the Underwriters so elect, delivery of the Shares may be made by credit
through full fast transfer to the accounts at the Depository Trust Company
designated by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
6. Covenants of the Company. The Company agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act, to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be reasonably disapproved by you promptly
giving reasonable notice thereof; to advise you, promptly after it receives
notice thereof, of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed and to furnish you copies thereof; to
advise you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or Prospectus, of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) Promptly, from time to time, to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings in such jurisdictions
for as long as may be necessary to complete the distribution of the
12
Shares, provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issuance of the Prospectus in connection with the
offering or sale of the Shares and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus in order to comply with the Act, to
notify you and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required by law to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than the forty-fifth (45th) day
following the end of the full fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement (as defined in
Rule 158(c)), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of any securities of
the Company which are substantially similar to the Shares, without the prior
written consent of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., other than (i) the sale of the
Shares to be sold by the Company hereunder, (ii) the issuance of shares and the
award of options under the Company's stock plans in amounts not in excess of the
amount described in the Prospectus as available for grant under such plans and
(iii) the issuance of Shares upon the conversion of Series A Common Stock
pursuant to the terms of the Company's Certificate of Incorporation;
(f) Not to grant options to purchase shares of Common Stock which
would become exercisable during a period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus;
(g) To furnish to its stockholders as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flow of the Company and its
consolidated subsidiaries certified by independent public accountants) and to
make available (within the meaning of Rule 158(b) under the Act) as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning
13
with the fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you upon your request copies of all
reports or other communications (financial or other) furnished to stockholders
generally, and deliver to you as soon as they are available, copies of any
publicly available reports and financial statements furnished to or filed with
the Commission, the Nasdaq National Market or any national securities exchange
on which any class of securities of the Company is listed (such financial
statements to be on a combined or consolidated basis to the extent the accounts
of the Company and its subsidiaries are combined or consolidated in reports
furnished to its stockholders generally or to the Commission);
(i) To use the net proceeds acquired by it from the sale of the
Shares in the manner specified in the Prospectus under the caption "Use of
Proceeds" and in a manner such that the Company will not become an "investment
company" as that term is defined in the Investment Company Act; and
(j) Not to accelerate the vesting of any option issued under any
stock option plan such that any such option may be exercised within 90 days from
the date of the Prospectus.
7. Expenses. The Company and each of the Selling Stockholders covenant
and agree with one another and the several Underwriters that (a) the Company and
each of the Selling Stockholders (each in proportion to the number of Shares to
be sold by such party) will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) all expenses and filing fees in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 6(b) hereof and securing any
required review by the NASD of the terms of the sale of the Shares, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and review and in connection with the Blue Sky survey (up to
a maximum of $5,000); (iii) the cost of preparing stock certificates; (iv) the
cost and charges of any transfer agent or registrar; and (v) all other costs and
expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section; and (b) such
Selling Stockholder will pay or cause to be paid all costs and expenses incident
to the performance of such Selling Stockholder's obligations hereunder which are
not otherwise specifically provided for in this Section, including (i) any fees
and expenses of counsel for such Selling Stockholder, (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the Attorneys-in-Fact
and the Custodian, and (iii) all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder. In connection with clause (b)(iii) of the preceding
sentence, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. agrees to pay New York State stock
transfer tax, and the Selling Stockholder agrees to reimburse ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇, Inc. for associated carrying costs if such tax payment is not rebated on
the day of payment and for any portion of such tax payment not rebated. It is
understood, however, that except as provided in clause 7(a)(ii) of this
14
Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
8. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and of the
Selling Stockholders herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company and the Selling Stockholders shall have
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) ▇▇▇▇▇▇▇ Procter LLP, counsel to the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to this Agreement, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request;
(c) Jenner & Block, LLP, counsel to the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance reasonably satisfactory to you, with respect to the matters set forth
in Annex I hereto;
(d) ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC, counsel to each of the Selling
Stockholders, as indicated in Schedule II hereto, shall have furnished to you
their written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel, dated such Time of Delivery, in form and substance
reasonably satisfactory to you, with respect to the matters set forth in Annex
II hereto:
(e) On the date hereof and also at each Time of Delivery,
PricewaterhouseCoopers LLP, shall have furnished to you and the Company a letter
or letters, dated the respective date of delivery thereof, in form and substance
reasonably satisfactory to you, to the effect set forth in Annex III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, which, singly or in the aggregate, would reasonably be expected
to result or has resulted in a Material Adverse Change, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus, there shall not have been any
change in the capital stock (other than
15
issuances of Common Stock pursuant to Company stock option plans described in
the Registration Statement and Prospectus or issuances of Common Stock upon the
conversion of Class A Common Stock or otherwise in connection with the
transactions contemplated by this Agreement) or long-term debt of the Company or
any Material Adverse Change, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof there shall not have occurred any
of the following: (i) additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over the counter market by the NASD, or trading in securities generally
shall have been suspended on either such Exchange or in the over the counter
market by the NASD, or a general banking moratorium shall have been established
by federal or New York authorities, (ii) a suspension or material limitation in
trading in securities generally on the Nasdaq National Market, (iii) a
suspension or material limitation in trading in the Company's securities on the
Nasdaq National Market, (iv) an outbreak of major hostilities or other national
or international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect materially
and adversely the marketability of the Shares, or (v) there shall be any action,
suit or proceeding pending or threatened, or there shall have been any
development or prospective development involving particularly the business or
properties or securities of the Company or any of its subsidiaries or the
transactions contemplated by this Agreement, which, in the judgment of the
Underwriters, has materially and adversely affected the Company's business or
earnings and makes it impracticable or inadvisable to offer or sell the Shares;
(h) The Shares to be sold by the Company at such Time of Delivery
shall have been accepted for quotation, subject to notice of issuance, on the
Nasdaq National Market System;
(i) Each director and executive officer of the Company, in their
capacities as such, and each of the Selling Stockholders, shall have executed
and delivered to you agreements in which such holder undertakes, for 90 days
after the date of the Prospectus, subject to certain exceptions stated therein,
not to offer, sell, contract to sell, pledge, grant any option to purchase, make
any short sale or otherwise dispose of any shares of Common Stock, or any
securities convertible into or exchangeable for, or any rights to purchase or
acquire, shares of Common Stock, without the prior written consent of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.; and
(j) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholders, respectively,
reasonably satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively, herein at
and as of such Time of Delivery, as to the performance in all material respects
by the Company and the Selling Stockholders of all of their respective
obligations hereunder to be
16
performed at or prior to such Time of Delivery, and as to such other matters as
you may reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and (f) of
this Section.
9. Indemnification and Contribution.
(a) The Company and each of the Selling Stockholders (other than
the ▇▇▇▇▇▇▇▇▇▇ Family Education Trust, the Valentine Children Stock Partnership,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇) (such Selling
Stockholders, hereinafter, the "Indemnification Stockholders"), jointly and
severally, will indemnify and hold harmless each Underwriter and each person, if
any, who controls such Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or controlling person
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto furnished by the Company, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or, in the case of the
Registration Statement or any amendment thereto, necessary to make the
statements therein not misleading and, in the case of the Preliminary
Prospectus, the Prospectus or any supplement thereto, necessary to make the
statements therein, in light of the circumstances in which they were made, 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; provided,
however, that the Company and the Indemnification Stockholders shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. expressly for
use therein; provided, further, that the aggregate liability of any such
Indemnification Stockholder shall not exceed the product of (i) the number of
Shares sold by such Indemnification Stockholder, including any Optional Shares,
and (ii) the public offering price of the Shares (net of underwriting discounts)
as set forth in the Prospectus. Notwithstanding anything to the contrary in this
Section 9(a), with respect to any untrue statement or alleged untrue statement
of a material fact contained in or omission or alleged omission of a material
fact from any Preliminary Prospectus, the indemnity contained in this Section
9(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased the Shares
concerned, to the extent that a prospectus relating to such Shares was required
to be delivered by such Underwriter under the Act in connection with such
purchase and any such loss, claim, damage or liability of such Underwriter
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Shares to such person, a
copy of the Prospectus (exclusive of material incorporated by reference) if the
Company had previously furnished copies thereof to such Underwriter.
(b) Each of the ▇▇▇▇▇▇▇▇▇▇ Family Education Trust, the Valentine
Children Stock Partnership, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (hereinafter, the "Limited Indemnification Stockholders"), will
severally and not jointly indemnify and hold
17
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement thereto
furnished by the Company, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Limited Indemnification Stockholder expressly
for use therein; 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; provided, however, that the aggregate liability of any such Limited
Indemnification Stockholder shall not exceed the product of (i) the number of
Shares sold by such Limited Indemnification Stockholder, including any Optional
Shares, and (ii) the public offering price of the Shares (net of underwriting
discounts) as set forth in the Prospectus. Notwithstanding anything to the
contrary in this Section 9(b), with respect to any untrue statement or alleged
untrue statement of a material fact contained in or omission or alleged omission
of a material fact from any Preliminary Prospectus, the indemnity contained in
this Section 9(b) shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities purchased
the Shares concerned, to the extent that a prospectus relating to such Shares
was required to be delivered by such Underwriter under the Act in connection
with such purchase and any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Shares to
such person, a copy of the Prospectus (exclusive of material incorporated by
reference) if the Company had previously furnished copies thereof to such
Underwriter.
(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company and each Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or such Selling Stockholder
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or, in the case of the Registration Statement or any
amendment thereto, necessary to make the statements therein not misleading and,
in the case of the Preliminary Prospectus, the Prospectus or any supplement
thereto, necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. expressly for use therein; and
will reimburse the Company and each Selling Stockholder for any legal or other
expenses
18
reasonably incurred by the Company or such Selling Stockholder in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof. No indemnification provided for in
subsection (a), (b) or (c) above shall be available hereunder to any party who
shall fail to give notice as provided in the preceding sentence if, but only to
the extent that, the party to whom such notice was not given was unaware of the
action, suit, investigation, inquiry or proceeding to which the notice would
have related and was prejudiced by the failure to give such notice; provided,
however, that the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof of the indemnified party, with
nationally-recognized counsel selected by the indemnified party, which counsel
shall be reasonably acceptable to such indemnifying party (and who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party in such action), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof. In the event the indemnifying party does not assume the
defense of any action brought against an indemnified party, the indemnifying
party shall not, in connection with any one such action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all indemnified persons, except to
the extent that local counsel, in addition to regular counsel, is required in
order to effectively defend against such action or proceeding, unless (i) the
indemnifying party has agreed in writing to pay such fees and expenses or (ii)
an indemnified party reasonably determines that there may be conflicting
interests between such indemnified party and other indemnified parties in
conducting the defense of such action. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party. No indemnifying party shall be liable for
any settlement of any action or claim effected without its written consent,
which consent shall not be unreasonably withheld. Notwithstanding anything to
the contrary in this Section 9(d), the Limited Indemnification Stockholders
shall not be liable to any indemnified party or other indemnifying party under
this Section 9(d) for any legal expenses or any other expenses incurred pursuant
to this Section 9(d).
19
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and such Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders, bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, each of the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include 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
subsection (e), (i) no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) no Selling Stockholder shall be required to contribute any
amount in excess of an amount equal to the product of the number of Shares sold
by the Selling Stockholder, including any Optional Shares, and the public
offering price of the Shares (net of underwriting discounts) set forth in the
Prospectus. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint. Notwithstanding
anything to the contrary in this Section 9(e), the Limited Indemnification
Stockholders shall only be required to contribute insofar as such losses,
claims, damages or
20
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto furnished by the Company, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Limited Indemnification Stockholder
expressly for use therein; and no Limited Indemnification Stockholder shall be
required to contribute any amount in excess of an amount equal to the product of
(i) the number of Shares sold by such Limited Indemnification Stockholder,
including any Optional Shares, and (ii) the public offering price of the Shares
(net of underwriting discounts) as set forth in the Prospectus.
(f) The obligations of the Company and the Selling Stockholders
under this Section 9 shall be in addition to any liability which the Company and
the respective Selling Stockholders may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 9 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Act.
10. Termination.
(a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six (36) hours after such default by any Underwriter you do not arrange
for the purchase of such Shares, then the Company and the Selling Stockholders
shall be entitled to a further period of thirty-six (36) hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company and the Selling Stockholders that you have so
arranged for the purchase of such Shares, or the Company and the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Company and the Selling Stockholders shall have the right to
postpone such Time of Delivery for a period of not more than seven (7) days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and/or the
Company and the Selling
21
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-tenth of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company and the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-tenth of the
aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company and certain Selling Stockholders to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholders, except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 7 hereof and the
indemnity and contribution agreements in Section 9 hereof, but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
11. Survival. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any of the Selling Stockholders, or any
officer or director or controlling person of the Company, or any controlling
person of any Selling Stockholder, and shall survive delivery of and payment for
the Shares.
12. Expenses of Termination. If this Agreement shall be terminated
pursuant to Section 10 hereof, the Company and the Selling Stockholders shall
then have no liability to any Underwriter except as provided in Section 7 and
Section 9 hereof; but, if for any other reason this Agreement is terminated, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholders shall have no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Section 7 and
Section 9 hereof.
13. Notice. In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by ▇▇▇▇▇,
22
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. on behalf of you as the Underwriters; and in all dealings
with any Selling Stockholder hereunder, you and the Company shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of such
Selling Stockholder made or given by any or all of the Attorneys-in-Fact for
such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Underwriters in care of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇; if to any
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for such Selling Stockholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer; provided, however,
that any notice to an Underwriter pursuant to Section 9(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriter's Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
by you on request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. Information Provided by the Underwriters. The Company and the
Underwriters acknowledge that, for purposes of this Agreement, the statements
set forth in the third and ninth paragraphs under the heading "Plan of
Distribution" in the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by any Underwriter specifically
for inclusion in the Registration Statement or the Prospectus;
15. Miscellaneous.
(a) This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 9 and 11 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
(b) Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
23
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signors
thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON, INC.
By: _______________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇▇ FAMILY EDUCATION TRUST
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ IRREVOCABLE TRUST
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ TRUST
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ TRUST
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ TRUST
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. TRUST
TRUST FOR ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
TRUST FOR ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
TRUST FOR ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
VALENTINE CHILDREN STOCK PARTNERSHIP
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: _______________________________
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the
24
Selling Stockholders named in
Schedule II to this Agreement.
Accepted as of the date hereof
in Boston, Massachusetts
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: _________________________________
(▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. on
behalf of each of the Underwriters)
25
SCHEDULE I
Number of
Optional Shares
Total Number to be Purchased
of Firm Shares if Maximum
to be Purchased Option Exercised
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.................... [__________] [__________]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C................. [__________] [__________]
TOTAL.......................................... 2,000,000 300,000
========= =======
26
SCHEDULE II
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
---------- ---------
The Company........................................................ 1,000,000 150,000
The Selling Stockholder(s):.........................................
▇▇▇▇▇▇▇▇▇▇ Family Education Trust (1)........................ 30,768 --
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (1)..................................... 214,000 36,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Irrevocable Trust (1)........................ 111,200 22,800
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust (1)................................. 111,200 22,800
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust (1).............................. 111,200 22,800
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust (1)................................ 111,200 22,800
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. Trust (1).......................... 111,200 22,800
Trust For ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (1)........................... 50,000 --
Trust For ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (1)............................. 50,000 --
Trust For ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ (1)................................ 50,000 --
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (1)..................................... 8,152 --
Valentine Children Stock Partnership (1)..................... 3,000 --
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (1).................................... 18,152 --
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. (1)................................ 10,152 --
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (1)....................................... 8,152 --
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (1)........................................... 24 --
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (1)........................ 1600 --
Total..................................................... ------------------ ---------------------
2,000,000 300,000
================== =====================
-------
(1) This Selling Stockholder is represented by ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC and has
appointed ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., as the
Attorneys-in-Fact for such Selling Stockholder.
27
ANNEX I
Form of Jenner & Block, LLC Opinion
1. The Company is a corporation duly incorporated, validly existing and
in good standing with the Secretary of State of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus. The Company is duly
qualified to do business and is in good standing in each jurisdiction within the
United States in which it maintains a manufacturing facility.
2. The authorized capitalization of the Company as of [_________], 2004
is as set forth under the caption "Capitalization" in the Prospectus. The Shares
have been duly authorized and, when issued and delivered in accordance with the
Underwriting Agreement, will be validly issued, fully paid and nonassessable and
will conform in all material respects to the description of the capital stock
contained in the Prospectus.
3. Each domestic subsidiary of the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its organization. All of the issued and outstanding shares of
capital stock of each such subsidiary are owned of record by the Company or
another subsidiary of the Company. Each domestic subsidiary of the Company is
duly qualified to do business and is in good standing in each jurisdiction
within the United States in which it maintains a manufacturing facility.
4. The Company has the corporate power and authority to enter into the
Underwriting Agreement and perform its obligations thereunder and the
Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
5. The issuance and sale by the Company of the Shares and the
performance by the Company of its obligations under the Underwriting Agreement
does not and will not (i) violate the certificate of incorporation or by-laws of
the Company, (ii) breach or result in a default under any agreement, indenture
or other instrument filed as an exhibit to the Registration Statement (except
that counsel need not express an opinion as to any financial tests or cross
defaults contained therein), or (iii) violate any existing Delaware, Illinois or
federal law, rule or administrative regulation or any decree known to such
counsel of any court or any governmental agency or body having jurisdiction over
the Company or any of its properties, except that such counsel need express no
opinion as to state securities or "Blue Sky" laws or as to compliance with the
anti-fraud provisions of federal and state securities laws.
6. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States, the State of Delaware or the State of Illinois is required for the
issuance and sale of the Shares by the Company or the consummation by the
Company of the transactions contemplated by the Underwriting Agreement, except
the registration under the Act of the Shares and the effectiveness of the
Registration Statement under the Act.
7. The Company is not subject to regulation as an "investment company"
under the Investment Company Act of 1940, as amended.
I-1
8. The Shares have been authorized for inclusion on the Nasdaq National
Market System, subject to notice of issuance.
9. The documents incorporated by reference in the Prospectus (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the Commission,
appeared on their face to be responsive in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder.
Such counsel shall also state that in the course of the preparation by
the Company of the Registration Statement and the Prospectus, they have
participated in discussions with your representatives and those of the Company
and its independent accountants in which the business and affairs of the Company
and the contents of the Registration Statement and Prospectus were discussed.
Such counsel shall state that on the basis of information that such counsel has
gained in the course of such counsel's representation of the Company in
connection with its preparation of the Registration Statement and Prospectus and
such counsel's participation in the discussions referred to above, such counsel
believes that the Registration Statement, as of its effective date, and the
Prospectus, as of its date, complied as to form in all material respects with
the requirements of the Act and the published rules and regulations of the
Commission thereunder and such counsel does not know of any legal or
governmental proceedings pending to which the Company is a party or of which any
property of the Company is the subject that are required by Item 103 of
Regulation S-K under the Act to be described in the Registration Statement or
Prospectus that are not so described or of any contracts or any other documents
of a character required to be filed as an exhibit to the Registration Statement
or Prospectus that are not filed as required. Further, such counsel shall state
that based on such information and participation, nothing came to the attention
of such counsel that caused such counsel to believe that (i) the Registration
Statement as of its effective date contained an untrue statement of material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) the Prospectus
as of its date contained or as of such Time of Delivery contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel need express no
opinion, however, as to the financial statements, including the notes and
schedules thereto, or any other financial or accounting information set forth or
referred to in the Registration Statement and Prospectus.
Such counsel may state that the limitations inherent in the independent
verification of factual matters and the character of the determinations involved
in such counsel's review are such that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements made
or the information contained in the Registration Statement and Prospectus except
for those made under the caption "Underwriting," which accurately summarize in
all material respects the provisions of the laws and documents referred to
therein.
Such counsel shall also include a statement in such opinion as to the
matters set forth in this paragraph. The Registration Statement has become
effective under the Act. To the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued by
the Commission nor has any proceeding been instituted or contemplated for that
purpose under the Act. The Prospectus has been filed with the
I-2
Commission pursuant to Rule 424(b) of the rules and regulations under the Act
within the time period required thereby.
I-3
ANNEX II
Form of Opinion of Counsel to the Selling Stockholders
1. A Power-of-Attorney and a Custody Agreement have been duly executed
and delivered by such Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholder in accordance with their terms;
2. This Agreement has been duly executed and delivered by or on behalf
of such Selling Stockholder; and the sale of the Shares to be sold by such
Selling Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement, the Power-of-Attorney and the
Custody Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of such Selling
Stockholder if such Selling Stockholder is a corporation, the Partnership
Agreement of such Selling Stockholder if such Selling Stockholder is a
partnership, the Trust Agreement or Declaration of Trust of such Selling
Stockholder if such Selling Stockholder is a trust, the Certificate of Formation
or Limited Liability Company Agreement of such Selling Stockholder if such
Selling Stockholder is a limited liability company, or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
3. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the Shares to be sold by such
Selling Stockholder hereunder, except registration of the Shares under the Act,
or an exemption therefrom, and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of such Shares by
the Underwriters;
4. Immediately prior to such Time of Delivery, such Selling Stockholder
had good and valid title to the Shares to be sold at such Time of Delivery by
such Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to sell,
assign, transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder; and
5. Good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters who have purchased such Shares in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse claim within
the meaning of the Uniform Commercial Code.
II-1
ANNEX III
Pursuant to Section 8(e) of the Underwriting Agreement,
PricewaterhouseCoopers LLP shall furnish letters to the Underwriters to the
effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, pro forma financial
information) examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the Exchange
Act, if applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
consolidated interim financial statements, selected financial data, pro forma
financial information and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been separately
furnished to the Underwriters;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's Quarterly Reports on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon, copies of which have been
separately furnished to the Underwriters; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(v)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year, agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Report on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, a reading of the latest available interim
III-1
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus or incorporated by
reference to the Company's Annual Report on Form 10-K for the
most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in clause (B) were
not determined on a basis substantially consistent with the
basis for the audited consolidated financial statements
included in the Prospectus or incorporated by reference to the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than
III-2
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which
were outstanding on the date of the latest financial
statements included or incorporated by reference in the
Prospectus) or any increase in the combined long-term debt of
the Company and its subsidiaries, or any decreases in combined
net current assets or net assets or other items specified by
the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with amounts shown
in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in
each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (v) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Underwriters which are derived from the
general accounting records of the Company and its subsidiaries, which appear in
the Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Underwriters, and have compared certain
of such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
III-3
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
CUSTODY AGREEMENT
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
There are delivered to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc., a Delaware
corporation (the "Company" or "you") as Custodian, herewith one or more
certificates (the "Certificates"), in negotiable form (and, subject to your
requirements, (a) with signatures guaranteed by a commercial bank or trust
company having an office or correspondent in the United States or by a member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc. or (b) accompanied by a duly executed stock power or
powers, in blank, bearing signatures so guaranteed), representing at least the
number of issued and outstanding shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"), and/or of Class A common stock, par
value $.01 per share, of the Company ("Class A Stock"), set forth below the name
of the undersigned selling stockholder (the "Seller") at the end of this letter,
to be sold in a public offering (the "Public Offering') pursuant to the
Registration Statement on Form S-3 (File No. 333-112221) filed on January 27,
2004, as amended. These Certificates are to be held by you as Custodian for the
account of the Seller and are to be disposed of by you solely in accordance with
this Custody Agreement. All capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Underwriting Agreement (as defined
below).
The Seller has also agreed to deliver to you herewith as Custodian (a)
if acting as a trustee or in any other fiduciary or representative capacity,
duly certified copies of each trust instrument, will, letters testamentary or
other instrument pursuant to which the undersigned is authorized to execute and
perform this Custody Agreement and the Underwriting Agreement (b) if a
partnership, a certificate of action taken by its general partner and extracts
of any applicable provisions of its partnership agreement authorizing it to
execute and perform this Custody Agreement and the Underwriting Agreement and
(c) if a corporation, duly certified resolutions of its Board of Directors and
extracts of any applicable provisions of its certificate of incorporation and
bylaws authorizing it to execute and perform this Custody Agreement and the
Underwriting Agreement. The Seller agrees to deliver to the Attorneys-in-Fact
(as defined below) or to you such additional documentation as the
Attorneys-in-Fact, or either of them, the Company, the Representatives (as
defined below) or you or any of their respective counsel may reasonably
1
request to effectuate or confirm compliance with any of the provisions hereof or
of the Underwriting Agreement, all of the foregoing to be in form and substance
satisfactory in all respects to the Attorneys-in-Fact and you.
Concurrently with the execution and delivery of this Custody
Agreement, the Seller has executed an irrevocable power of attorney (the "Power
of Attorney"), the form of which has been furnished to you, to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., or their duly designated substitutes
(individually, an "Attorney-in-Fact" and together the "Attorneys-in-Fact"),
authorizing such Attorneys-in-Fact, or either of them acting alone, in the name
of, for and on behalf of, the Seller with respect to all matters arising in
connection with the sale of Common Stock, including any Optional Shares (as
defined in the Underwriting Agreement), by the Seller in the Public Offering
(including the conversion into Common Stock of the Seller's Class A Stock, if
any, deposited with you hereunder), and for that purpose to enter into and
perform an underwriting agreement (the "Underwriting Agreement"), substantially
in the form which has been furnished to you, among the Company, certain selling
stockholders of the Company including the Seller (the "Selling Stockholders"),
and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, as
representatives (the "Representatives") of the several underwriters named
therein (the "Underwriters"). By signing below, the undersigned acknowledges
that he, she or it has received and carefully reviewed the draft dated
__________, 2004 of the Underwriting Agreement and understands that the draft
of the Underwriting Agreement is subject to completion and further revision
before execution. Shares of Common Stock to be sold by the Selling Stockholders
to the Underwriters pursuant to the Underwriting Agreement are referred to
herein as the "Shares."
You are authorized and directed to hold the Certificates deposited with
you hereunder in your custody, and prior to each Time of Delivery specified in
the Underwriting Agreement at which the Seller is selling any shares of Common
Stock of which you shall have been given prior notice, and upon the instructions
of an Attorney-in-Fact, you are to take all necessary action to cause the
transfer agent and registrar for the Common Stock to prepare and countersign a
certificate or certificates (the "Underwriters' Certificates"), which may be
aggregated with such Underwriters' Certificates in respect of other Selling
Stockholders, representing the Shares which are to be sold by the Seller at such
Time of Delivery registered in such names and denominations as the
Representatives shall have instructed you. With respect to each Certificate
representing one or more shares of Class A Stock to be sold by the Seller, if
any, at such Time of Delivery, this Custody Agreement shall serve as written
notice to convert such shares into shares of Common Stock in accordance with
Part 4 (f) of the Company's Restated Certificate of Incorporation; provided that
(i) such notice shall not be deemed to have been delivered to or received by the
Company for purposes of Part 4 (f)(ii) until you have received notice from an
Attorney-in-Fact to effectuate such conversion, and (ii) such conversion shall
not in any way be deemed effective unless, and then only to the extent, the
Underwriters purchase the shares of Common Stock into which such shares of Class
A Stock are to be converted.
At each Time of Delivery, you are, upon the instructions of an
Attorney-in-Fact, (i) to take all necessary action to cause the transfer agent
and registrar for the Common Stock (A) to cause the Shares that are to be sold
by the Seller at such Time of Delivery pursuant to the Underwriting
2
Agreement to be transferred upon the books of the Company into such names and in
such denominations as the Representatives shall have instructed you and to
exchange the Certificates representing such Shares for new certificates for such
Shares registered in such names and in such denominations as the Representatives
shall have instructed you, and (B) to deliver such new certificates to the
Representatives, pursuant to the Underwriting Agreement for the accounts of the
several Underwriters against receipt by you from the Representatives of payment
in full of the purchase price for such Shares as provided in the Underwriting
Agreement, (ii) to give receipt for such payment and to deposit such payment to
your account as Custodian, (iii) to draw upon such account to pay such transfer
taxes (if any), fees and expenses as you may be instructed to pay by the
Attorneys-in-Fact, or either of them acting alone, and (iv) after deducting such
fees and expenses from the amount received by you as payment for the Shares sold
at such Time of Delivery, to distribute the balance in accordance with the
payment instructions set forth below the name of the Seller at the end of this
Custody Agreement or such other instructions you shall have received prior to
such Time of Delivery by an Attorney-in-Fact. Promptly after such Time of
Delivery, you shall return to the Seller new certificates (which you shall have
obtained from the transfer agents for the Common Stock and the Class A Stock and
which shall be accompanied by appropriate stock powers), representing the number
of shares of Common Stock and/or Class A Stock, if any, represented by the
Certificates deposited with you on behalf of the Seller, which are in excess of
the total number of Shares sold and to be sold at any subsequent Time of
Delivery by the Seller to the Underwriters pursuant to the Underwriting
Agreement.
If the Underwriting Agreement shall not be executed and delivered by
all parties thereto on or prior to the ninetieth day after the date of this
Custody Agreement then, upon the written request of the Seller to you, you are
to return to the Seller, or as the Seller may otherwise direct, the Certificates
representing shares of Common Stock and/or Class A Stock then on deposit and
received by you on behalf of the Seller pursuant to this Custody Agreement
(accompanied by written notice of termination of the Power of Attorney addressed
to each Attorney-in-Fact), and this Custody Agreement shall forthwith terminate.
The Custodian may resign and be discharged from its duties or obligations
hereunder, if such resignation and discharge is required by law or court order,
by giving notice in writing of such resignation specifying a date when such
resignation shall take effect. If Custodian resigns, this Agreement shall
terminate and Custodian shall return all of the undersigned's Certificates
representing Common Stock and/or Class A Stock in his possession to the
undersigned, unless the undersigned consents to a replacement for Custodian.
Under the terms of the Power of Attorney, the authority conferred
thereby is granted and conferred subject to and in consideration of the
interests of the Underwriters and the other Selling Stockholders and, except as
set forth in the previous paragraph, is an agency coupled with an interest and
is irrevocable and not subject to termination by the Seller or by operation of
law, whether by the death or incapacity of the Seller or any executor or
trustee, the termination of any estate or trust or by the occurrence of any
other event. Accordingly, the shares of Common Stock and/or Class A Stock
represented by the Certificates deposited with you pursuant to this Custody
Agreement and your authority under this Custody Agreement are subject to the
interests of the Company, the Underwriters and the other Selling Stockholders,
and this Custody Agreement and your authority hereunder shall, except as set
forth in the preceding paragraph, be irrevocable and
3
not subject to termination by the Seller or by operation of law, whether by the
death or incapacity of the Seller or any executor or trustee, the termination of
any estate or trust or by the occurrence of any other event. If any such Seller
or any such executor or trustee should die or become incapacitated or if any
such estate or trust should be terminated or if any other such event should
occur, before the delivery of the Shares to be sold by the Seller under the
Underwriting Agreement, the Certificates representing the Shares shall be
delivered by or on behalf of the Seller in accordance with the terms and
conditions of the Underwriting Agreement and this Custody Agreement, and actions
taken by you hereunder or by the Attorney-in-Fact, or either of them acting
alone, pursuant to the Power of Attorney shall be as valid as if such death,
incapacity, termination or other event had not occurred, regardless of whether
or not you or the Attorneys-in-Fact, or either of them acting alone, shall have
received notice of such death, incapacity, termination or other event.
Until payment in full of the purchase price for the Shares to be sold
by the Seller to the Underwriters has been made as provided in the Underwriting
Agreement, the Seller shall, except as otherwise specifically provided herein,
have all the rights of ownership of such Shares and all other shares, if any,
represented by the Certificates deposited with you on behalf of the Seller,
including, without limitation, the rights to vote such Shares and to receive all
dividends and distributions thereon. The Underwriters shall have no power or
right to direct the investment of the Shares until the purchase price for such
Shares is paid in full pursuant to the Underwriting Agreement.
You shall be entitled to act and rely upon any statement, request,
notice or instruction respecting this Custody Agreement given to you by the
Attorneys-in-Fact, or either of them acting alone; provided, however, that any
statement or notice to you with respect to each Time of Delivery under the
Underwriting Agreement, or with respect to the noneffectiveness or termination
of the Underwriting Agreement or advising that the Underwriting Agreement has
not been executed and delivered, shall have been confirmed in writing to you by
the Representatives. Any statement, request, notice or instructions respecting
this Custody Agreement to be given by the Representatives may be given by the
Representatives jointly or by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. on their behalf.
It is understood that you assume no responsibility or liability to any
person other than to deal with the Certificate(s) deposited with you and the
proceeds from the sale of the Shares represented thereby, all in accordance with
the provisions of this Custody Agreement.
The Seller has carefully reviewed the representations, warranties,
statements and agreements to be made by the Seller as a Selling Stockholder set
forth in Section 2 in the Underwriting Agreement, and the Seller hereby makes,
at and as of the date of this Custody Agreement, to you each of the
representations, warranties and agreements to be made by the Seller as a Selling
Stockholder in Section 2 of the Underwriting Agreement furnished to you, and
such representations, warranties and agreements are incorporated by reference
herein in their entirety. Such representations, warranties, statements and
agreements, insofar as they relate to the undersigned, will survive the Closing
Date specified in the Underwriting Agreement, and such agreements, insofar as
they relate to the undersigned, have (where applicable) been and are
4
to be complied with as of the date hereof and will be complied with on and after
the Closing Date.
The foregoing representations, warranties and agreements are made for
the benefit of, and may be relied upon by, the Custodian, the other Selling
Stockholders, the Attorneys-in-Fact, the Underwriters and their representatives
and counsel, the Company and its counsel and counsel for the Selling
Stockholders, and may be specifically relied upon by ▇▇▇▇▇▇▇ Procter LLP,
counsel to the Underwriters, Jenner & Block LLP, counsel to the Company, and
counsel for the Selling Stockholders for purposes of the opinions to be
delivered by them pursuant to the Underwriting Agreement.
The Seller agrees to honor and perform all its obligations and
covenants under the Underwriting Agreement including those relating to
indemnification of the Underwriters under Section 9 of the Underwriting
Agreement.
In the event any statement, request, notice or instruction given by one
Attorney-in-Fact under this Custody Agreement shall be inconsistent with that
given by another, any such statement, request, notice or instruction given by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall prevail.
No party may assign any of its rights of obligations under this Custody
Agreement without the written consent of all the other parties, which consent
may be withheld in the reasonable discretion of the party whose consent is
sought.
This Custody Agreement may be modified only by a written amendment
signed by all parties hereto, and no waiver of any provision hereof shall be
effective unless expressed in a writing signed by the party to be charged.
The Custodian may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it
hereunder and reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Custodian shall be under no duty
to inquire into or investigate the validity, accuracy or content of any such
document. The Custodian shall have no duty to solicit any payments which may be
due it hereunder.
The Custodian shall not be liable for any action taken or omitted by it
in good faith unless a court of competent jurisdiction determines that the
Custodian's willful misconduct was the primary cause of any loss to the parties
hereto. The Custodian may consult with counsel of its own choice and shall have
full and complete authorization and protection for any action taken or omitted
by it hereunder in good faith and in accordance with the reasonable opinion of
such counsel.
The undersigned hereby agrees to indemnify the Custodian for, and hold
it harmless against any loss, liability or expense arising out of or in
connection with this Custody Agreement and carrying out its duties hereunder,
including the costs and expenses of defending itself against any claim of
liability, except in those cases where the Custodian has been guilty of gross
negligence or willful misconduct. Anything in this Custody Agreement to the
contrary
5
notwithstanding, in no event shall the Custodian be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Custodian has been advised of the
likelihood of such loss or damage and regardless of the form of action. The
liability of the undersigned pursuant to this paragraph shall not exceed the
product of the number of shares of Common Stock sold by the undersigned and the
public offering price for the Common Stock (net of the underwriting discount).
The duties and responsibilities of the Custodian hereunder shall be
determined solely by the express provisions of this Custody Agreement and no
other or further duties or responsibilities shall be implied. The Custodian
shall not have any liability under, nor duty to inquire into the terms and
provisions of any agreement or instructions, other than outlined in this Custody
Agreement.
This Custody Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
6
Please acknowledge your acceptance hereof as Custodian and receipt of
the Certificates deposited by executing and returning one of the enclosed copies
hereof to the undersigned.
Dated: _______________
Very truly yours,
Signature of Selling Stockholder:*
____________________________
{Insert Full Name of Selling Stockholder}
By: _________________
Name:
Title:
Signature guaranteed by: **
By: _________________
Name:
Title:
____________________
* You should sign in exactly the same manner as the shares of
Common Stock of the Company owned by you are registered and
execute a separate Agreement for each different form in which
shares are registered.
** The signature must be guaranteed by a commercial bank or trust
company having an office or correspondent in the United States
or by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers,
Inc.
Number of Shares of Common Stock Maximum Number of Shares of Common
Represented by Certificates Deposited: Stock to be sold to Underwriters:
____________________ Shares ____________________ Shares
Number of Shares of Class A Stock Maximum Number of Optional Shares to be
Represented by Certificates Deposited: sold to Underwriters:
____________________ Shares ____________________ Shares
(Number may not exceed limits set forth in Power of Attorney)
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Number of Shares Subject to
Sale From Common Stock
Serial Numbers of Number of Shares Certificates if Less Than All
Common Stock Represented by Each Shares Represented Thereby are
Certificates: Common Stock Certificate: to be Sold:*
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
_______________________ ___________________________ _____________________________
______________________
* If no indication is made, selection to be at the Custodian's discretion.
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PAYMENT INSTRUCTIONS
The balance of funds held by the Custodian representing net
proceeds (after payment of expenses) received upon the sale of Shares are to be
remitted in accordance with the provisions of this Custody Agreement as follows
(select one):
1. Send check to Seller at the following address:
________________________________________________________________________________
2. Wire transfer to an account of Seller at another
bank (fee for wire transfer to be paid by the
Seller and deducted from proceeds)
Bank Name _______________
Bank Address ______________
(Attention of _______________)
Account No. _______________
Account Name ______________
3. Other instructions: ______________
*
ACKNOWLEDGEMENT AND RECEIPT
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc., as Custodian, acknowledges acceptance
of the duties of Custodian under the foregoing Custody Agreement and receipt of
the Certificates representing the shares referred to therein.
Dated: _______________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc.
as Custodian
By: ______________________
Name:
Title:
9
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
IRREVOCABLE POWER OF ATTORNEY OF SELLING STOCKHOLDER
The undersigned stockholder of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc., a
Delaware corporation (the "Company"), understands that the Company, the
undersigned and certain other stockholders of the Company (the undersigned and
such other stockholders being hereinafter referred to as the "Selling
Stockholders") propose to sell certain shares of Common Stock, par value $.01
per share, of the Company ("Common Stock") to the several underwriters (the
"Underwriters") named in the Underwriting Agreement referred to below,
represented by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company (the
"Representatives"), and that the Underwriters propose to offer such shares to
the public. The undersigned also understands that, in connection with the public
offering pursuant to the Underwriting Agreement (as defined below), the Company
has filed a Registration Statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") to register under the
Securities Act of 1933, as amended (the "1933 Act") the offering of the shares
to be sold by the Company and the Selling Stockholders. All capitalized terms
not otherwise defined herein shall have the meaning ascribed to them in the
Underwriting Agreement.
Concurrently with the execution and delivery of this Power of Attorney,
the undersigned is also executing and delivering a Custody Agreement (the
"Custody Agreement") pursuant to which certificates for at least the number of
shares of Common Stock, or Class A Common Stock, par value $.01 per share, of
the Company (the "Class A Stock") convertible into Common Stock, set forth
opposite the name of the undersigned at the end of this instrument are being
deposited with the Company which will hold such certificates as custodian (the
"Custodian").
1. In connection with the foregoing, the undersigned hereby irrevocably
appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., and either of them
acting alone, the attorneys-in-fact (collectively the "Attorneys-in-Fact" and
individually an "Attorney-in-Fact") of the undersigned, and agrees that the
Attorneys-in-Fact, or either of them acting alone, may also act as
attorneys-in-fact for any other Selling Stockholder, with full power and
authority in the name of, and for and on behalf of, the undersigned:
(a) to do all things the Attorneys-in-Fact shall deem
necessary or desirable, including taking such actions as may be necessary to
effectuate the conversion of the appropriate number of shares of Class A Stock
into Common Stock, to sell to the Underwriters up to the number (the "Maximum
Number") of shares of Common Stock set forth opposite the name of the
undersigned at the end of this instrument, including any Optional Shares (the
"Shares"), and represented by the certificates deposited by or on behalf of the
undersigned with the Custodian;
1
(b) for the purpose of effecting such sale, to negotiate,
execute, deliver and perform the undersigned's obligations under an underwriting
agreement (the "Underwriting Agreement") among the Company, the Selling
Stockholders and the Representatives, as representatives of the several
Underwriters named therein, in substantially the form thereof attached hereto as
Exhibit A, together with such additions thereto, deletions therefrom and changes
thereto (including the purchase price per Share to be paid by the Underwriters
and the number (or method of determining the number) of Shares (not to exceed
the Maximum Number in the aggregate) to be sold by the undersigned) as may be
approved in the sole discretion of the Attorneys-in-Fact, or either of them
acting alone, such approval to be conclusively evidenced by the execution and
delivery of the Underwriting Agreement by the Attorneys-in-Fact, or either of
them acting alone;
(c) to execute and deliver any amendments, modifications or
supplements to the Underwriting Agreement and the Custody Agreement, to amend,
modify or supplement any of the terms thereof including, without limitation, the
terms of the offering; provided, however, that no such amendment shall increase
the number of the Shares to be sold by the undersigned to more than the Maximum
Number in the aggregate;
(d) to give such orders and instructions to the Custodian or
any other person as the Attorneys-in-Fact, or either of them acting alone, may
determine, including, without limitation, orders or instructions for the
following: (i) the delivery of notice to the Company pursuant to the Custody
Agreement to effectuate conversion of any shares of Class A Stock into Common
Stock to be included in the Shares, (ii) the transfer on the books of the
Company of the Shares in order to effect their sale (including the names in
which new certificates for the Shares are to be issued and the denominations
thereof), (iii) the purchase of any transfer tax stamps necessary in connection
with the transfer of the Shares, (iv) the delivery to or for the account of the
Underwriters of the certificates for the Shares against receipt by the Custodian
of the purchase price therefor, (v) the payment by the Custodian out of the
proceeds of any sale of the Shares to the Underwriters of all expenses as are to
be borne by the undersigned in accordance with the terms of the Underwriting
Agreement, (vi) the remittance by the Custodian of the net balance of the
proceeds from any sale of the Shares to be sold in accordance with the payment
instructions set forth in the Custody Agreement or such other instructions as
the Attorneys-in-Fact, or either of them acting alone, may, upon the
instructions of the undersigned, have given to the Custodian in accordance with
the Custody Agreement, and (vii) the return to the undersigned of new
certificates representing the number of shares of Common Stock, if any,
represented by certificates deposited with the Custodian which are in excess of
the number of Shares sold by the undersigned to the Underwriters as specified in
the Underwriting Agreement and to be sold at any subsequent Time of Delivery;
(e) to join the Company in withdrawing the Registration
Statement if the Company should desire to withdraw such registration;
(f) to retain legal counsel in connection with any and all
matters referred to herein (which counsel may, but need not be, counsel for the
Company);
2
(g) to arrange payment therefor of those expenses of the
public offering, if any, payable by the undersigned (which shall include the
undersigned's portion of underwriting discounts and commissions and, to the
extent proceeds are remitted to the undersigned by wire transfer in accordance
with the instructions in the Custody Agreement, the costs of any wire transfer);
(h) to endorse (in blank or otherwise) on behalf of the
undersigned the certificate or certificates representing the Shares, or a stock
power or powers attached to such certificate or certificates; and
(i) to make, execute, acknowledge and deliver all other
contracts, orders, receipts, notices, requests, instructions, certificates,
letters and other writings, including communications to the Commission
(including a request or requests for acceleration of the effective date of the
Registration Statement), any state securities law authorities and the National
Association of Securities Dealers, Inc., any amendments to the Underwriting
Agreement, the Custody Agreement or any agreement with the Company with regard
to expenses, and certificates and other documents required to be delivered by or
on behalf of the undersigned pursuant to the Underwriting Agreement or the
Custody Agreement, and specifically to execute on behalf of the undersigned
stock powers and transfer instructions relating to the Shares to be sold by the
undersigned, and in general to do all things and to take all action which the
Attorneys-in-Fact, or either of them acting alone, may consider necessary or
proper in connection with, or to carry out and comply with, all terms and
conditions of the Underwriting Agreement and the Custody Agreement and the
aforesaid sale of Shares to the several Underwriters.
2. The undersigned hereby makes, at and as of the date of this Power of
Attorney, with and to the several Underwriters each of the representations,
warranties and agreements of each Selling Stockholder set forth in the
Underwriting Agreement attached hereto as Exhibit A, and all such
representations, warranties and agreements are incorporated by reference herein
in their entirety (the representations, warranties and agreements being subject,
however, to the exception that orders or other authorizations that may be
required under the 1933 Act in connection with the purchase and distribution by
the Underwriters of the Shares to be sold by the undersigned have not yet been
obtained).
The undersigned further:
(a) represents and warrants to, and agrees with, the several
Underwriters that this Power of Attorney and the Custody Agreement have been
duly executed and delivered by or on behalf of the undersigned and constitute
valid and binding agreements of the undersigned in accordance with their
respective terms; and
(b) (i) confirms to the several Underwriters the accuracy of
the information concerning the undersigned and the undersigned's shareholding in
the Company as set forth in the preliminary prospectus dated ____________, 2004,
under the caption "Principal and Selling Stockholders", a copy of which has been
furnished to the undersigned, (ii) also confirms to the several Underwriters the
accuracy of the information concerning the undersigned contained or to be
contained in any selling stockholder's questionnaire or other written document
furnished by the undersigned to the Company for purposes of the Registration
Statement or any prospectus
3
(preliminary or final) contained therein or filed pursuant to Rule 424 under the
1933 Act or in any amendment or supplement thereto (including any documents
incorporated by reference therein), (iii) agrees with the Company and the
several Underwriters immediately to notify the Company and promptly (but in any
event within two business days thereafter) to confirm the same in writing if,
during the period or at the date(s) referred to in paragraph 4 hereof, there
should be any change affecting the accuracy of the above-mentioned information,
or if any subsequent version of such section of the prospectus delivered to the
undersigned should be inaccurate, and (iv) agrees with the Company and the
several Underwriters that for all purposes of the representation, warranty and
agreement incorporated by reference herein from the Underwriting Agreement
attached hereto as Exhibit A, delivery of this Power of Attorney and the
statements contained herein constitute (and in the absence of any such
notification as is referred to in subclause (iii) given prior to the date on
which the Underwriting Agreement is executed and delivered by the undersigned
will constitute on a continuing basis) written information furnished by the
undersigned to the Company for use in the Registration Statement and any such
prospectus, amendment or supplement.
3. This Power of Attorney and all authority conferred hereby are
granted and conferred subject to the interests of the Underwriters and the other
Selling Stockholders; and, in consideration of those interests and for the
purpose of completing the transactions contemplated by the Underwriting
Agreement and this Power of Attorney, this Power of Attorney and all authority
conferred hereby, to the extent enforceable by law, shall be deemed an agency
coupled with an interest and be irrevocable and not subject to termination by
the undersigned or by operation of law, whether by the death or incapacity of
the undersigned or any executor or trustee or the termination of any estate or
trust or by the dissolution or liquidation of any corporation or partnership or
by the occurrence of any other event. If any such individual or any such
executor or trustee should die or become incapacitated or if any such estate or
trust should be terminated or if any such corporation or partnership should be
dissolved or liquidated or if any other such event should occur before the
delivery of the Shares to be sold by the undersigned under the Underwriting
Agreement, certificates representing such Shares shall be delivered by or on
behalf of the undersigned to the extent required by, and in accordance with, the
terms and conditions of the Underwriting Agreement and of the Custody Agreement,
and all other actions required to be taken under the Underwriting Agreement or
the Custody Agreement shall be taken, and actions taken by the
Attorneys-in-Fact, or either of them acting alone, pursuant to this Power of
Attorney and by the Custodian under the Custody Agreement shall be as valid as
if such death, incapacity, termination, dissolution, liquidation or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or either of them acting alone, shall have received notice of
such death, incapacity, termination, dissolution, liquidation or other event.
Notwithstanding the foregoing, if the Underwriting Agreement
is not executed and delivered on or prior to the ninetieth day after the date of
this Power of Attorney, then from and after such date the undersigned shall have
the power to revoke all authority hereby conferred by giving written notice to
each of the Attorneys-in-Fact that this Power of Attorney has been terminated;
subject, however, to all lawful action done or performed by the
Attorneys-in-Fact or either one of them, pursuant to this Power of Attorney
prior to the receipt of such notice.
4
4. The undersigned will immediately notify the Attorneys-in-Fact, the
Company and the Representatives of the occurrence of any event which shall cause
the representations and warranties contained herein not to be true and correct
during the period of the public offering of the Shares or at each Time of
Delivery for the Shares pursuant to the Underwriting Agreement.
5. The undersigned ratifies all that the Attorneys-in-Fact shall do by
virtue of this Power of Attorney. All actions may be taken by either of the
Attorneys-in-Fact alone. In the event that any statement, request, notice or
instruction given by one Attorney-in-Fact shall be inconsistent with that given
by another, any such statement, request, notice or instruction from ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ shall prevail.
6. It is understood that the Attorneys-in-Fact, solely in their
capacities as Attorneys-in-Fact under this Power of Attorney, make no
representations with respect to and shall have no responsibility for the
Registration Statement, the Preliminary Prospectus or the Prospectus. The
undersigned agrees to indemnify the Attorneys-in-Fact for and hold the
Attorneys-in-Fact, jointly and severally, free and harmless from any and all
loss, damage, liability or expense incurred in connection herewith, including
reasonable attorney's fees and costs, which they, or either of them acting
alone, may sustain as a result of any action taken or not taken in good faith
hereunder.
7. If any provision of this Power of Attorney is found to be
unenforceable as applied in any particular case or circumstances in any
applicable jurisdiction because it conflicts with any other provision of this
Power of Attorney, or any constitution, statute or rule of public policy, or for
any other reason, such finding shall not render the provision unenforceable in
any other case or circumstances, or render any other provisions of this Power of
Attorney unenforceable to any extent whatsoever.
8. This Power of Attorney shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
5
Dated: _______________
Maximum number of Shares of
Common Stock to be sold:
_______________ Shares
Maximum number of
Optional Shares to be sold:
_______________ Shares
Signature of Selling Stockholder:
------------------------------
[Insert Full Name of Selling Stockholder]
By:____________________________
Name:
Title:
NOTE: ALL SIGNATURE(S) ON THIS POWER OF ATTORNEY MUST BE EITHER GUARANTEED BY
ONE OF THE INSTITUTIONS REFERRED TO IN THE FIRST PARAGRAPH OF THE CUSTODY
AGREEMENT OR ELSE MUST BE NOTARIZED; SEE BELOW.
Signature(s) guaranteed by:
-------------------------
[OR]
-------------------------
You should sign in exactly the same manner as the shares of Common
Stock of the Company owned by you are registered and execute a separate Power of
Attorney for each different form in which shares are registered.
6
STATE OF )
ss.:
COUNTY OF )
On the _____ day of __________ before me personally came to me
known and known to me to be the individual described in, and who executed the
foregoing instrument, and (s)he acknowledged to me that (s)he executed the same.
-----------------------
Notary Public
My term expires: ____________________
7
EXHIBIT A
FORM OF UNDERWRITING AGREEMENT
SEE ATTACHED.
8