5,000,000 Shares
▇▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY
Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
November __, 1997
November __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
BT Alex. ▇▇▇▇▇ International, a division of Bankers Trust International PLC
▇▇▇▇▇▇▇ Sachs International
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Madames:
▇▇▇▇▇▇▇▇ ▇▇▇▇ Company, a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined below),
5,000,000 shares of the common stock, par value $.01 per share, of the Company
(the "Firm Shares").
It is understood that, subject to the conditions hereinafter stated,
[________] Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and [________] Firm Shares (the "International Shares") will be sold to the
several International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇"), BT ▇▇▇▇. ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co. and BancAmerica
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall act as representatives (the "U.S. Representatives") of
the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited,
BT Alex. ▇▇▇▇▇ International, a division of Bankers Trust International PLC,
▇▇▇▇▇▇▇ Sachs International and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall act as
representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "Underwriters."
The Company proposes to sell to the several U.S. Underwriters not more
than an additional 750,000 shares of the Company's common stock, par value $.01
per share (the "Additional Shares"), if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The shares of
common stock, par value $.01 per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the U.S. prospectus and the
international prospectus in respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus." If the
Company has filed an abbreviated statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
The Company hereby confirms its appointment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ hereby confirms its agreement with the Company to render services
as, a "qualified independent underwriter" within the meaning of Rule 2720 of the
National Association of Securities Dealers, Inc. (the "NASD") with respect to
the offering and sale of the Shares. The Public Offering Price (as defined in
Section 3 hereof) shall not be higher than the maximum price recommended by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ acting as "qualified independent underwriter."
As part of the offering contemplated by this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
has agreed to reserve out of the Shares set forth opposite its name on
Schedule I to this Agreement up to 250,000 Shares, for sale to the Company's
employees, officers, directors
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and other parties associated with the Company (collectively, "Participants"), as
set forth in the Prospectus under the heading "Underwriting" (the "Directed
Share Program"). The Shares to be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the
Directed Share Program (the "Directed Shares") will be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
pursuant to this Agreement at the Public Offering Price (as defined in Section 4
below). Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the first business day after the date on which this
Agreement is executed will be offered to the public by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as set
forth in the Prospectus.
The Company and ▇▇▇▇▇▇▇▇ ▇▇▇▇ Company, a Texas close corporation
(the"Predecessor Company"), are collectively referred to herein as the
"Companies". For purposes of this Agreement, the term "subsidiary" shall have
the meaning set forth in Rule 1-02 of Regulation S-X and, as used herein and
unless otherwise indicated, shall refer to a subsidiary of the Company.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES. The Companies
represent and warrant to and agree with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the knowledge
of the Companies, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) Each of the Companies has been duly incorporated, is validly
existing as a corporation or in good standing under the laws of the
jurisdiction of its incorporation or organization, has the corporate power
and authority to own its property and to conduct its business as described
in the Prospectus and is duly
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qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Companies and their subsidiaries, taken as a whole.
(d) Each "significant subsidiary" (as such term is defined in Rule
1-02 of Regulation S-X) of the Companies, including but not limited to the
subsidiaries listed on Schedule III to this Agreement (each a "Significant
Subsidiary" and, collectively, the "Significant Subsidiaries"), has been
duly incorporated or organized, is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or organization, has all power and
authority to own its property and to conduct its business as described in
the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Companies and their subsidiaries,
taken as a whole; all of the issued shares of capital stock of each
Significant Subsidiary which is a corporation have been duly and validly
authorized and issued, are fully paid and non-assessable, all of the
partnership interests of each Significant Subsidiary which is a partnership
have been duly and validly authorized and issued, and all of the shares of
capital stock or partnership interests in any Significant Subsidiary
(except as set forth in the Registration Statement and the Prospectus) are
owned directly or indirectly by the Company or the Predecessor Company, as
the case may be, free and clear of all liens, encumbrances, equities or
claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Companies.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The Shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued, delivered
and paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
4
(i) The financial statements (together with the related notes
thereto) of the Predecessor Company and Doppelt & Company ("Doppelt")
included in the Registration Statement present fairly the financial
position of the Predecessor Company and Doppelt, respectively, and each of
their respective subsidiaries as of the respective dates of such financial
statements, and the results of operations and cash flows of the Predecessor
Company and Doppelt, respectively, and each of their respective
subsidiaries for the respective periods covered thereby, all in conformity
with generally accepted accounting principles consistently applied
throughout the periods involved. The balance sheet (together with the
related notes thereto) of the Company included in the Registration
Statement presents fairly the financial position of the Company and its
subsidiaries as of the date of such balance sheet, in conformity with
generally accepted accounting principles consistently applied throughout
the period involved. The pro forma consolidated financial statements
included in the Prospectus have been prepared in accordance with Article 11
of Regulation S-X with respect to pro forma financial statements, have been
properly complied on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate under the
circumstances.
(j) None of the Companies or any of their subsidiaries is in
violation of its certificate of incorporation or certificate of
partnership, as the case may be, or its by-laws or partnership agreement,
as the case may be, or, except as would not have a material adverse effect
on the Companies and their subsidiaries, taken as a whole, in default in
the performance or observance of any obligation, agreement. covenant or
condition contained in any agreement or other instrument binding upon the
Companies or any of their respective subsidiaries. The conduct of the
business of the Companies and their respective subsidiaries is and has been
in compliance with applicable foreign, federal, state and local laws and
regulations, except where the failure to be in compliance would not, singly
or in the aggregate, have a material adverse effect on the Companies and
their subsidiaries, taken as a whole.
(k) The execution and delivery by the Companies of, and the
performance by the Companies of their obligations under, this Agreement and
the consummation by the Companies of the Reincorporation Transactions (as
defined in the Prospectus under the caption "The Company") will not
contravene any provision of applicable law or the certificate of
incorporation, by-laws or other organizational documents of either of the
Companies or any of their Significant Subsidiaries, or any agreement or
other instrument binding upon any of the Companies or any of their
Significant Subsidiaries that is material to the Companies and their
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over any of the
Companies or their Significant Subsidiaries and no consent, approval,
authorization or order of, or qualification with, any governmental
5
body or agency is required for the performance by the Companies of their
obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states or of any jurisdiction
outside the United States in connection with the offer and sale of the
Shares.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Companies and their subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(m) There are no legal or governmental proceedings pending or, to the
knowledge of the Companies, threatened to which any of the Companies or
their subsidiaries is a party or to which any of the properties of any of
the Companies or their subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(n) Each of the Company, the Predecessor Company and their respective
subsidiaries has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not have a material adverse effect
on the Companies and their subsidiaries, taken as a whole.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(p) Neither the Company nor the Predecessor Company is, and, after
giving effect to the Reincorporation Transactions, the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus, the Company will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
6
(q) At the time the Registration Statement became effective, the
Shares were registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Shares have been authorized for listing
on the New York Stock Exchange, subject only to official notice of
issuance.
(r) The Companies and their subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety
(including occupational health and safety), the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Companies and their
subsidiaries, taken as a whole.
(s) There are no 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) which would, singly or in the aggregate, have a material adverse
effect on the Companies and their subsidiaries, taken as a whole.
(t) There are no contracts, agreements or understandings between any
of the Companies and any person granting such person the right to require
the Company to file a registration statement under the Securities Act with
respect to any securities of the Company (except for (i) the Investment
Agreement, dated as of December 7, 1994, by and between the Predecessor
Company and ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as successor to JCP Family Limited
Partnership, (ii) the Stockholders Agreement (as defined in the
Prospectus), and (iii) the Doppelt Stockholders Agreement (as defined in
the Prospectus)), and there are no contracts, agreements or understandings
between the Company or the Predecessor Company and any person granting such
person the right to require the Company or the Predecessor Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(u) Except as described in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Companies
and their subsidiaries have not incurred any material liability or
obligation or entered into any material transaction not in the ordinary
course of business; (2) the Company has not purchased any of its
7
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Companies and their subsidiaries, except in each case as described in or
contemplated by the Prospectus.
(v) The Companies and their subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them in each case which is material to the
business of the Companies and their subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as 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 Companies and their subsidiaries; and
any real property and buildings held under lease by any of the Companies or
their subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made of such property and buildings by the Companies
and their subsidiaries, in each case except as described in or contemplated
by the Prospectus.
(w) The Companies and their subsidiaries own, possess, have licensed
for use as described in the Registration Statement and the Prospectus, or
can acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, and none of the Companies or their subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Companies and their
subsidiaries, taken as a whole.
(x) The Companies and their Significant Subsidiaries have filed all
material foreign, federal and state income and franchise tax returns and
have paid all material taxes shown as due thereon, and there is no tax
deficiency that has been asserted against the Companies or their properties
or assets that would have a material adverse effect on the Companies and
their subsidiaries, taken as a whole.
(y) No material labor dispute with the employees of the Companies or
any of their subsidiaries exists, except as described in or contemplated by
the Prospectus, or, to the knowledge of the Companies, is imminent.
8
(z) The Companies and each of their subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; none of the Companies or any such subsidiary has
been refused any insurance coverage sought or applied for; and neither the
Companies nor any such subsidiary has any reason to believe that they will
not be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue their business at a cost that would not have a
material adverse effect on the Companies and their subsidiaries, taken as a
whole.
(aa) Each of the Companies and their respective subsidiaries maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (3) access to assets is permitted only in accordance
with management's general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(bb) All offers, sales or other issuances of the Company's capital
stock prior to the date hereof were at all relevant times exempt from the
registration requirements of the Securities Act and were duly registered,
or the subject of an available exemption from registration, under
applicable state securities or Blue Sky laws.
(cc) Following the Reincorporation Transactions, as defined in and as
described in the Prospectus under the caption "The Company," neither the
Predecessor Company's ability to distribute any cash or property to the
Company, nor the Company's ability to receive any such distributions from
the Predecessor Company, will be impeded by any law or agreement.
(dd) There are no relationships or transactions between the Company,
the Predecessor Company or any of their respective subsidiaries, on the one
hand, and their respective affiliates, officers and directors or their
shareholders, customers or suppliers on the other hand which, although
required to be disclosed, are not disclosed or reflected in the Prospectus.
Furthermore, the Companies represent and warrant to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
that (i) the Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendment or supplements thereto will comply,
with any applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed
9
Share Program, (ii) no authorization, approval, consent, license, order,
registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is necessary
under the securities laws and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States, and (iii) the Companies
have not offered, or caused the Underwriters to offer, Shares to any person
pursuant to the Directed Share Program with the specific intent to unlawfully
influence (a) a customer or supplier of the Company or the Predecessor Company
to alter the customer's or supplier's level or type of business with the
Company, or (b) a trade journalist or publication to write or publish favorable
information about the Company, the Predecessor Company or their products.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) set forth in Schedules I and
II hereto opposite its names at U.S.$_____ a Share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to [________]
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
but not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section
5 hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each U.S. Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the U.S. Representatives may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of U.S. Firm Shares set forth in Schedule I hereto opposite the name of
such U.S. Underwriter bears to the total number of U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any shares of
10
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the sale of the Shares to the Underwriters hereunder, (B) the issuance by the
Company of shares of Common Stock upon the exercise of an option or a warrant or
the conversion of a security outstanding on the date of the Prospectus of which
the Underwriters have been advised in writing or (C) stock or stock option
issuances by the Company pursuant to employee benefit plans existing as of the
date of the Prospectus of which the Underwriters have been advised in writing.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
U.S.$________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of
U.S.$_______ a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of
U.S.$________ a share, to any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made
by wire transfer of immediately available funds to an account designated by the
Company against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 A.M., New York City time, on _________, 1997, or
at such other time on the same or such other date, not later than____________,
1997, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company by wire
transfer of immediately available funds to an account designated by the Company
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 A.M., New York City time, on the date specified in
the notice described in Section 2 or at such other time on the same or on such
other date, in any event not later than _____________, 1997, as shall be
designated in writing by the U.S. Representatives. The time and date of such
payment are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be
11
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Company to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Companies'
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
reasonably likely to result in a change, in the condition, financial
or otherwise, or in the earnings, business or operations of the
Companies and their subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed on behalf of the Companies
by an executive officer of the Companies, (i) to the effect that the
representations and warranties of the Companies contained in this Agreement
are true and correct as of the Closing Date and that the Companies have
complied with all of the agreements and satisfied all of the conditions on
their part to be performed or satisfied hereunder on or before the Closing
Date, and (ii) setting forth all jurisdictions in which the conduct of the
Company's business or its ownership or leasing of property requires that
each of the Companies or their subsidiaries be qualified to transact
business, except to the extent
12
that the failure to be so qualified would not have a material adverse
effect on the Companies, or their subsidiaries, taken as a whole.
(c) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, outside counsel for the Companies, dated the
Closing Date, to the effect that:
(i) each of the Companies has been duly incorporated and is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation with the power and authority to own
its property and conduct its business as described in the Prospectus;
and each of the Companies is duly qualified to transact business and,
based solely upon such counsel's review of "good standing"
certificates of such states, is in good standing in each jurisdiction
set forth in the certificate provided pursuant to 5(b)(ii) hereto;
(ii) each Significant Subsidiary set forth on Schedule III to
this Agreement has been duly incorporated or organized and is validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, has the power and authority to own its property and
to conduct its business as described in the Prospectus; and is
qualified to transact business and, based solely upon such counsel's
review of "good standing" certificates of such states, is in good
standing in each jurisdiction set forth in the certificate provided
pursuant to 5(b)(ii) hereto;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable;
(v) all of the outstanding partnership interests or issued
shares of capital stock of each Significant Subsidiary set forth on
Schedule III to this Agreement have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, other than as described in the
Prospectus;
(vi) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights;
13
(vii) this Agreement has been duly authorized, executed and
delivered by each of the Companies;
(viii) the execution and delivery by each of the Companies of,
and the performance by each of the Companies of its obligations under,
this Agreement and the consummation of the Reincorporation
Transactions described in the Prospectus under the caption "The
Company" will not contravene any provision of applicable law or the
certificate of incorporation or by-laws or other organizational
documents of the Companies or the Significant Subsidiaries set forth
on Schedule III to this Agreement or any agreement or other instrument
binding upon any of the Companies or their subsidiaries that is
material to the Companies and their subsidiaries, taken as a whole,
or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over any of the Companies or their respective subsidiaries, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Companies of their obligations under this Agreement, except such as
may be required by the securities or Blue Sky laws of the various
states or the securities laws of foreign jurisdictions in connection
with the offer and sale of the Shares by the Underwriters;
(ix) the statements (A) in the Prospectus under the captions "The
Company," "Management," "Description of Capital Stock" and
"Underwriting," and (B) in the Registration Statement in Items 14 and
15, insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(x) to such counsel's knowledge, and without having investigated
governmental records or court dockets, there are no legal or
governmental proceedings pending or threatened to which the Companies
or any of their subsidiaries is a party that are required to be
described in the Registration Statement or the Prospectus and are not
so described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(xi) neither the Company nor the Predecessor Company is and,
after giving effect to the Reincorporation Transactions, the offering
and sale of the Shares and the application of the proceeds thereof as
described in the
14
Prospectus, the Company will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
(xii) the Registration Statement, as of its effective date,
and the Prospectus, as of its date, appeared on their face to be
appropriately responsive in all material respects to the requirements
of the Securities Act and the rules and regulations promulgated
thereunder, except that, in each case, such counsel need not express
any opinion as to the financial statements, schedules and other
financial or statistical data included therein or excluded therefrom
or the exhibits to the Registration Statement, and such counsel need
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus (other than to the extent specified in paragraphs (iii)
and (ix) above).
In addition, such counsel shall state (i) that they have
participated in conferences with officers and other representatives of the
Companies, representatives of the Underwriters and their counsel at which
the contents of the Registration Statement and the Prospectus and related
matters were discussed and (ii) although they have not verified and are not
passing upon the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Companies), that no
fact has come to their attention that cause them to believe that (a) the
Registration Statement, as of the time it became effective under the Act,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (b) the Prospectus, was as of its
date and as of the date of the Closing, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading (expressing no view, belief or comment
with respect to the form, accuracy, completeness or fairness of the
financial statements, notes or schedules thereto or other financial data or
information included in the Registration Statement or the Prospectus).
(d) The Underwriters shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in subparagraphs (vi),
(vii), (ix) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriting") and (xii) of paragraph
(c) above, as well as a statement covering the matters referred to in the
last unnumbered subparagraph of paragraph (c) above.
With respect to subparagraph (xii) of paragraph (c) above, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & Sterling may state that their opinion and belief are
based upon their
15
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ described in paragraph (c) above, shall
be rendered to the Underwriters at the request of the Company and shall so
state therein.
(e) The Underwriters shall have received, on each of the date hereof
and the Closing Date, letters dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young, independent public accountants with respect to the
Company, the Predecessor Company and their respective subsidiaries, and
with respect to Doppelt, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; provided that
the letters delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and each of the shareholders and between you
and each of the officers listed under the caption "Management" in the
Prospectus and each of the directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.
(g) The Reincorporation Transactions (as defined in the Prospectus
under the caption "The Company") shall have been consummated in the manner
set forth in the Prospectus.
(h) The Common Stock shall have been registered under the Exchange
Act, and the Shares shall have been approved for listing on the New York
Stock Exchange, subject only to official notice of issuance.
(i) The Replacement Facility described in the Prospectus shall have
been executed and delivered by the parties thereto and shall be in full
force and effect, subject only to the closing of the sale of the Firm
Shares to the Underwriters, the payment in full of the Existing Credit
Facility (as defined in the Prospectus) and the pledge to NationsBank of
certain collateral currently pledged to secure the Existing Credit
Facility.
(j) The Underwriters shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
16
(k) The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and sale of the Additional Shares and other matters
related to the sale of the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, eight (8) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
paragraph (c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
17
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 1998 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) To use the net proceeds received by it from the sale of the
Shares in the manner specified in the Prospectus under "Use of Proceeds."
(g) That in connection with the Directed Share Program, the Companies
will ensure that the Directed Shares will be restricted to the extent (i)
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement and (ii) the Company is
advised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of the Participants which will need to be so
restricted. The Companies will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(h) To pay all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
Furthermore, the Companies covenant with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that the
Company will, and the Predecessor Company will cause the Company to, comply with
all applicable securities and other applicable laws, rules and regulations in
each foreign jurisdiction in which the Directed Shares are offered by the
Company in connection with the Directed Share Program.
7. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Companies agree
to pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Companies' counsel and the Companies' accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or Legal Investment
18
memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
6(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the NASD and all filing fees and the reasonable fees and disbursements
of counsel to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in its capacity as "qualified independent
underwriter," (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common Stock
and all costs and expenses incident to listing the Shares on the New York Stock
Exchange, (vi) the cost of printing certificates representing the Shares, (vii)
the costs and charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Companies relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Companies, travel and lodging expenses of the representatives and officers of
the Companies and any such consultants, and the cost of any aircraft chartered
in connection with the road show, (ix) all expenses in connection with any offer
and sale of the Shares outside of the United States, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with offers and sales outside of the United States, and (x) all other
costs and expenses incident to the performance of the obligations of the
Companies hereunder for which provision is not otherwise made in this Section.
It is understood, however, that except as provided in this Section, Section
6(h), Section 8 entitled "Indemnity and Contribution", and the last paragraph of
Section 10 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
8. INDEMNITY AND CONTRIBUTION. (a) The Company and the Predecessor
Company agree to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any
19
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; PROVIDED, HOWEVER,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Companies shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Companies with Section 6(a) hereof.
(b) The Company and the Predecessor Company agree to indemnify and
hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and each person, if any, who controls ▇▇▇▇▇▇
▇▇▇▇▇▇▇ within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent and participation of the Companies for
distribution in foreign jurisdictions in connection with the Directed Share
Program attached to the Prospectus or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, when considered in
conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the Shares which, immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, neither the Company nor the Predecessor
Company shall be responsible under this subparagraph (iii) for any losses,
claim, damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities.
The Company and the Predecessor Company also agree to indemnify and
hold harmless the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from and against any and all losses,
claims, damages, liabilities and judgments incurred as a result of ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the National Association of Securities Dealers' Conduct
Rules in connection with the offering of the Shares, except for any losses,
claims, damages, liabilities, and judgments resulting from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇, or
such controlling person's, willful misconduct.
20
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Companies, the directors of the Company, the officers of
the Company who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a), (b) or (c) of this Section
8, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in the case of
parties indemnified pursuant to Sections 8(a) and 8(b), and by the Company in
the case of parties indemnified pursuant to Section 8(c). Notwithstanding
anything contained herein to the contrary, if indemnity may be sought
pursuant to paragraph (b) of this Section 8 in respect of such action or
proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for (x) the reasonable fees
and expenses of not more than one separate firm (in addition to any local
counsel) for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for the defense of any losses, claims, damages
and liabilities arising out of the Directed Share Program, and all persons,
if any, who control ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the meaning of either Section 15 of
the Act of Section 20 of the Exchange Act and (y) the reasonable fees and
expenses of not more than one separate firm (in addition to any local
counsel) for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in its capacity as a "qualified independent
underwriter" and all persons, if any, who control ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act.
The
21
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second, third and fifth sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in paragraph (a),
(b) or (c) of this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Companies on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Companies on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Companies on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Companies on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Companies or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute
22
pursuant to this Section 8 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(f) The Companies and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (e) of this Section 8.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Companies contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, or the Companies, their respective officers or directors or any
person controlling either of the Companies and (iii) acceptance of and payment
for any of the Shares.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event, singly or
23
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the
24
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
25
Very truly yours,
▇▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY, a Delaware corporation
By:
-------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY, a Texas close corporation
By:
--------------------------------------------
Name:
Title:
26
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf
of themselves and the
several U.S. Underwriters
named in Schedule I hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By
---------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
BT Alex. ▇▇▇▇▇ International, a division of Bankers Trust International PLC
▇▇▇▇▇▇▇ Sachs International
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf
of themselves and the
several International Underwriters
named in Schedule II hereto.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By
---------------------------------------
Name:
Title:
27
SCHEDULE I
U.S. UNDERWRITERS
Number of
Firm Shares
Underwriter To be Purchased
--------------- ----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[NAMES OF OTHER UNDERWRITERS]
-------------
Total U.S. Firm Shares
-------------
-------------
SCHEDULE II
INTERNATIONAL UNDERWRITERS
Number of
Firm Shares
Underwriter To be Purchased
------------- -------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International
Limited
BT Alex. ▇▇▇▇▇ International, a division of
Bankers Trust International PLC
▇▇▇▇▇▇▇ Sachs International
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[NAMES OF OTHER UNDERWRITERS]
------------
Total International Firm Shares
------------
------------
SCHEDULE III
IDENTIFIED SIGNIFICANT SUBSIDIARIES OF THE COMPANIES
EXHIBIT A
[FORM OF LOCK-UP LETTER]
___________, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
BT Alex. ▇▇▇▇▇ International, a division of Bankers Trust International PLC
▇▇▇▇▇▇▇ Sachs International
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Madames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL"), BT
Alex. ▇▇▇▇▇ Incorporated, BT Alex. ▇▇▇▇▇ International, a division of Bankers
Trust International PLC, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ International and
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the "Underwriters") propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") with
▇▇▇▇▇▇▇▇ ▇▇▇▇ Company, a Delaware corporation (the "Company") and ▇▇▇▇▇▇▇▇ ▇▇▇▇
Company, a Texas close corporation (the "Predecessor Company"), providing for
the public offering (the "Public Offering") by the several Underwriters, of
5,000,000 (plus 750,000 shares subject to the Underwriters' over-allotment
option) shares (the "Shares") of the common stock, par value $.01 per share, of
the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, the undersigned will not, during the
period commencing on the date hereof and ending 180 days after the date of the
final prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (provided that such shares or securities are
either now owned by the undersigned or are hereafter acquired prior to or in
connection with the Public Offering), or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) the exercise of an option or a warrant or the conversion
of a security outstanding on the date of the Prospectus of which the
Underwriters have been advised in writing (b) stock or stock option issuances by
the Company pursuant to existing employee benefit plans, (c) the pledge of
shares of Common Stock by certain employees and directors to the Company's
secured creditors as described in the Prospectus; (d) transactions relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the Public Offering; or (e) the transfer of shares of
Common Stock by the undersigned to the following: (i) if the undersigned is an
individual, a member of the immediate family of the undersigned, if any, or a
trust whose sole beneficiaries are members of the immediate family of the
undersigned, or a partnership whose sole partners are members of the immediate
family of the undersigned; and (ii) if the undersigned is a trust, any member of
the immediate family of the undersigned that is the grantor or trustee of the
trust; provided, however, that the undersigned shall first require any
transferee described in clause (d)(i) or (d)(ii) to execute a copy of this
letter prior to such transfer. In addition, the undersigned agrees that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the
Underwriters, the undersigned will not, during the period commencing on the date
hereof and ending 180 days after the date of the Prospectus, make any demand for
or exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------
(Name)
----------------------------
(Address)
A-2