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Exhibit 1.1
1,500,000 Shares
▇▇▇▇ NATIONAL CORPORATION
(a Delaware corporation)
Class A Common Stock
(Par Value $.001 Per Share)
UNDERWRITING AGREEMENT
----------------------
July _____, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
as Representatives of the Several Underwriters
c/▇ ▇▇▇▇▇▇▇▇ & Company Securities, Inc.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇ National Corporation, a Delaware corporation (the
"Company") confirms its agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇ ▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇ & Company Securities, Inc. ("McDonald"), Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Inc. ("Deutsche") and each of the other underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
▇▇▇▇▇ ▇▇▇▇▇▇, whom McDonald and Deutsche are acting as representatives (in such
capacity, ▇▇▇▇▇ ▇▇▇▇▇▇, McDonald and Deutsche shall hereinafter be referred to
as the "Representatives"), with respect to the sale by the Company of 1,500,000
shares of Class A Common Stock, par value $.001 per share (the "Common Stock"),
of the Company, and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of shares of Common Stock set forth in said
Schedule A, aggregating 1,500,000 shares of Common Stock, and with respect to
the grant by the Company of the option described in Section 2(b) hereof to
purchase all or any part of 225,000 shares of Common Stock, par value $.001 per
share, solely to cover over-allotments, in each case except as may otherwise be
provided in the Pricing Agreement, as hereinafter defined. The aforesaid
1,500,000 shares of Common Stock (the "Initial Securities") to be purchased by
the Underwriters and all or any part of the 225,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "Option
Securities") are collectively hereinafter called the "Securities."
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Prior to the purchase and public offering of the Securities by
the Underwriters, the Representatives, acting on behalf of the several
Underwriters, shall enter into an agreement substantially in the form of Exhibit
A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of
an exchange of any standard form of written telecommunication between the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Securities will be
governed by this Underwriting Agreement (this "Agreement"), as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-29401) and a related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), and
has filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof. Such registration
statement (as amended, if applicable) and the prospectus constituting a part
thereof (including the documents incorporated therein by reference pursuant to
Item 12 of Form S-3 under the 1933 Act and the information, if any, deemed to be
part thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), as from time to
time amended or supplemented pursuant to the 1933 Act or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to the
Underwriters by the Company in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations), the term "Prospectus" shall refer to such revised Prospectus from
and after the time it is first provided to the Underwriters for such use. Any
reference herein to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated therein by reference pursuant to Item 12 of Form S-3 under the ▇▇▇▇
▇▇▇.
The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as the Representatives deem
advisable after the Registration Statement becomes effective and the Pricing
Agreement has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company
represents and warrants to each Underwriter as of the date hereof and as of the
date of the Pricing Agreement (such latter date being hereinafter referred to as
the "Representation Date") as follows:
(i) The Company has been subject to the requirements
of Section 12 or 15(d) of the Securities Exchange Act of 1934 (the
"1934 Act") for a period of at least 12 months prior to the initial
filing of the Registration Statement and has filed all the material
required to be filed pursuant to Section 13, 14 or 15(d) of the 1934
Act for a period of at least 12 calendar months immediately preceding
the initial filing of the Registration Statement and through and
including the Representation Date in a timely
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manner and otherwise satisfies all applicable requirements for the use
of Form S-3 under the 1933 Act in connection with the transactions
contemplated hereby and by the Registration Statement.
(ii) 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 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
and none of such documents contained at the date of such filing 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.
(iii) At the time the Registration Statement becomes
effective and at the Representation Date, the Registration Statement
will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations, and the Registration Statement will
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 not misleading. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the time it
is first provided to the Underwriters for such use) and at the Closing
Time referred to in Section 2, will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
(iv) The accountants who certified the financial
statements and supporting schedules included or incorporated by
reference in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly the financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the supporting schedules incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein.
(vi) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there
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has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
Delaware with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise; all of
the issued and outstanding capital stock of each such subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through one or
more direct or indirect subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim.
(ix) The Company has the authorized, issued and
outstanding capitalization set forth in the Prospectus; except as
otherwise set forth in the Registration Statement, the shares of issued
and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; the shares of
Common Stock to be issued and sold by the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company in the manner
contemplated by this Agreement, will be validly issued and fully paid
and non-assessable; the issuance of shares of Common Stock contemplated
by this Agreement is not subject to preemptive or other similar rights;
the Common Stock conforms in all material respects to all statements
relating thereto contained in the Prospectus; the certificates for the
Securities are in due and proper form;
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and the holders of the Securities will not be subject to personal
liability by reason of being such holders.
(x) This Agreement has been duly authorized, executed
and delivered by the Company.
(xi) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, loan
agreement or note or in any material contract, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject; the consummation of the transactions contemplated herein and
by the Pricing Agreement has been duly authorized by the Company by all
necessary corporate action and the issuance, sale and delivery of the
shares of Common Stock to be issued and sold by the Company and the
execution, delivery and performance of this Agreement by the Company
will not, except for the equity registration rights agreement, dated
March 6, 1992, between the Company and the parties therein, conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its subsidiaries or
any applicable law, administrative regulation or administrative or
court decree.
(xii) No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors which might be expected to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
(xiii) There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign,
now pending or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or which, considered singly or in the aggregate, may result
in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, or
which may materially and adversely affect the properties or assets
thereof or which may materially or adversely affect the consummation of
this Agreement or the Pricing Agreement; all pending legal or
governmental proceedings to which the Company or any
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subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are
no contracts or documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed.
(xiv) The Company and its subsidiaries own or
possess, or can acquire on reasonable terms, the 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 (collectively, "intellectual property") presently
employed by them in connection with the business now operated by them,
except where the failure to own or possess or have the ability to
acquire any such intellectual property would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, and neither the Company nor
any of its 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 result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xv) No authorization, approval or consent of any
court or governmental authority or agency is necessary in connection
with the sale of the Securities hereunder, except such as may be
required under the 1933 Act or the 1933 Act Regulations, which
qualification has been obtained, or state and foreign securities laws.
(xvi) The Company and its subsidiaries possess such
material certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(xvii) All United States federal income tax returns
of the Company and each of its subsidiaries required by law to be filed
have been filed and all taxes shown by the said returns or otherwise
assessed which are due and payable have been paid, except assessments
against which appeals have been or will be promptly taken. The United
States
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federal income tax returns of the Company and its subsidiaries on a
consolidated basis through the fiscal year ended February 13, 1996 have
been filed and no assessment in connection therewith has been made
against the Company, and the United States federal income tax return
for the fiscal year ended February 3, 1997 will be filed on or before
October 15, 1997 (the date on which such return is required by law to
be filed) or pursuant to any extension or extensions that may be
granted thereon. The Company and its subsidiaries have filed all other
tax returns which are required to have been filed by them pursuant to
applicable state, local or other law except (i) with respect to such
taxes as are being contested in good faith and (ii) insofar as the
failure to file such returns individually and in the aggregate would
not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, and
have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Company or its subsidiaries, except for such
taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the consolidated books of the Company in respect of any
income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to
the extent of any inadequacy which would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xviii) The Company and its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (C) access to assets is permitted
only in accordance with management's general or specific authorization,
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xix) Except for such rights which have been waived in
writing or as to which the failure to comply with would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise or on the transactions
contemplated hereby: (a) there are no holders of securities (debt or
equity) of the Company or any of its subsidiaries, or holders of
rights, options or warrants to obtain securities of the Company or any
of its subsidiaries, who, by reason of the filing of the Registration
Statement under the 1933 Act, have the right to request the Company or
any of its subsidiaries to register under the 1933 Act securities held
by them; and (b) the Company and its subsidiaries have complied in all
material respects with all of the terms of any of their outstanding
agreements relating to the rights of any holder of securities to have
securities registered under the Registration Statement. Except as
described in the Prospectus, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of Common Stock
or any security convertible into or exchangeable or exercisable for any
shares of Common Stock.
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(xx) The Company and its subsidiaries have good title
to all properties owned by them, in each case free and clear of all
liens, encumbrances and defects except (A) as do not materially
interfere with the use made and proposed to be made of such properties,
(B) as referred to in the Registration Statement (including the Notes
to the Consolidated Financial Statements included therein) or (C) as
could not reasonably be expected to materially and adversely affect the
condition, financial or otherwise, or the earnings or business affairs
of the Company and its subsidiaries considered as one enterprise.
(xxi) Except as disclosed in the Registration
Statement, the Company and its subsidiaries are in material compliance
with all applicable existing federal, state and local laws and
regulations relating to protection of human health or the environment
or imposing liability or standards of conduct concerning any Hazardous
Material (as hereinafter defined) ("Environmental Laws"), except, in
each case, where such noncompliance, singly or in the aggregate, would
not have a material and adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(xxii) There is no alleged liability, or to the best
knowledge and information of the Company, potential liability
(including, without limitation, alleged or potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or
penalties) of the Company or its subsidiaries arising out of, based on
or resulting from (A) the presence or release into the environment of
any Hazardous Material at any location at which the Company or any of
its subsidiaries has previously conducted or is currently conducting
any business (whether or not owned by the Company or its subsidiaries)
or has previously owned or currently owns any property, or (B) any
violation or alleged violation of any Environmental Law, (X) which
alleged or potential liability is required to be disclosed in the
Registration Statement, other than as disclosed therein, or (Y) which
alleged or potential liability, singly or in the aggregate, would have
a material and adverse effect on the condition, financial or otherwise,
or the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise.
(xxiii) The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
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(xxiv) The Company and each of its subsidiaries
maintain reasonably adequate insurance with respect to their properties
and business against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in the same
or similar businesses and similarly situated, of such types and in such
amounts as are customarily carried under similar circumstances by such
other corporations.
(xxv) The shares of Common Stock outstanding prior to
the Representation Date have been duly listed on the New York Stock
Exchange ("NYSE") and the shares of Common Stock to be issued and sold
by the Company pursuant to the Agreement will at the Closing Time be
duly authorized for listing on the NYSE, subject only to official
notice of issuance.
(xxvi) The Company has furnished the Representatives
letters from each of the executive officers and directors of the
Company pursuant to which such persons have agreed during a period of
120 days from the date hereof that, without the prior written consent
of McDonald, such persons will not sell, offer to sell, contract to
sell, or otherwise dispose of, directly or indirectly, any shares of
Common Stock, any other equity security of the Company, or any security
convertible into or exchangeable or exercisable for shares of Common
Stock, beneficially owned by such person or with respect to which such
person has the power of disposition, other than as bona fide gifts.
(b) Any certificate signed by an officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING. (a) On
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
to each Underwriter, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price agreed upon by the Representatives and
the Company as set forth in the Pricing Agreement, the number of shares of
Common Stock set forth in Schedule A opposite the name of such Underwriter
(except as otherwise provided in the Pricing Agreement).
(i) If the Company has elected not to rely upon Rule
430A under the 1933 Act Regulations, the initial public offering price
of the Securities and the purchase price of the Securities to be paid
by the several Underwriters shall be agreed upon and set forth in the
Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus will be filed before the
Registration Statement becomes effective.
(ii) If the Company has elected to rely upon Rule
430A under the 1933 Act Regulations, the initial public offering price
of the Securities and the purchase price of the Securities to be paid
by the several Underwriters shall be determined by agreement among the
Representatives and the Company and set forth in the Pricing Agreement.
In
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the event that such prices have not been agreed upon and the Pricing
Agreement has not been executed and delivered by all parties thereto by
the close of business on the fourth business day following the date of
this Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, unless otherwise agreed to
by the Company and the Representatives.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to 225,000 shares of Common Stock at the price per
share set forth in the Pricing Agreement. The option hereby granted will expire
30 days after (i) the date the Registration Statement becomes effective, if the
Company has elected not to rely on Rule 430A under the 1933 Act Regulations or
(ii) the date of the Pricing Agreement, if the Company has elected to rely on
Rule 430A under the 1933 Act Regulations, and may be exercised in whole or in
part from time to time (but not more than twice) only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of payment (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full Business Days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined, unless otherwise agreed
by the Representatives and the Company. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriters bears to the total number
of Initial Securities (except as otherwise provided in the Pricing Agreement),
subject in each case to such adjustments as the Representatives in its
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
▇▇▇▇▇▇▇▇ & Company Securities, Inc., ▇▇▇▇▇▇▇▇ Investment Center, Cleveland, Ohio
or at such other place as shall be agreed upon by the Representatives and the
Company, at 10:00 A.M. on the third business day (unless postponed in accordance
with the provisions of Section 10) following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
third business day after execution of the Pricing Agreement), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called the "Closing Time"); provided, however, that if the
Registration Statement becomes effective later than 4:30 p.m., Eastern Time, on
any date, then, subject to the foregoing, the Closing Time shall be the fourth
business day thereafter (or, if the Company has elected to rely upon Rule 430A,
and the Pricing Agreement is not executed until after 4:30 p.m., Eastern Time,
on any date, the fourth business day after execution of the Pricing Agreement).
In addition, in the event that any or all of the Option Securities are to be
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices of McDonald &
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Company Securities, Inc., or at such other place as shall be agreed upon by the
Representatives and the Company on each Date of Delivery as specified in the
notice from the Representatives to the Company. Payment shall be made to the
Company by wire transfer of immediately available funds to the account
designated by the Company, against delivery of the Securities to the
Underwriters. The certificates representing Securities shall be in such
denominations and registered in such names as the Representatives may request in
writing at least two business days before the Closing Time. It is understood
that each Underwriter has authorized the Representatives, for their account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. The Representatives may (but shall
not be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose check has not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder. The Securities will be made available for examination and packaging
by the Underwriters not later than 10:00 A.M. on the last business day prior to
the Closing Time at such place as the Underwriters may designate in New York,
New York.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants
with each Underwriter as follows:
(a) The Company will notify the Underwriters immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any post-effective amendment),
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose or
the suspension of the qualification of the Securities for offering or sale, in
any jurisdiction, or the threatening or initiation of any proceeding for that
purpose. The Company will make every reasonable effort to prevent the issuance
of any stop order or any order preventing or suspending the use of any
preliminary prospectus or suspending such qualification and, if any stop order
or any order preventing or suspending the use of any preliminary prospectus or
suspending such qualification is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with the offering of the Securities which
differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations),
will furnish the Underwriters with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or use any such
prospectus to which counsel for the Underwriters and counsel for the Company
mutually agree shall not be filed or used.
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(c) The Company will deliver to the Underwriters one signed
copy of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein) and will also deliver to the Underwriters conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits).
(d) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934
Act Regulations.
(e) If any event shall occur as a result of which counsel for
the Company and counsel for the Underwriters mutually agree that it is necessary
to amend or supplement the Prospectus in order to make the Prospectus not
misleading in light of the circumstances existing at the time it is delivered to
a purchaser or if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations, the Company will
forthwith amend or supplement the Prospectus (in form and substance mutually
satisfactory to counsel for the Underwriters and counsel for the Company and in
compliance with the 1933 Act and the 1933 Act Regulations) so that, as so
amended or supplemented, the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time it is
delivered to a purchaser, not misleading and will comply with the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, and the Company
will furnish to the Underwriters a reasonable number of copies of such amendment
or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representatives may designate; PROVIDED, HOWEVER, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification in
effect, for a period of not less than one year from the effective date of the
Registration Statement.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(h) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A of the 1933 Act
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Regulations, then immediately following the execution of the Pricing Agreement,
the Company will prepare, and file or transmit the filing with the Commission in
accordance with such Rule 430A and Rule 424(b) of the 1933 Act Regulations,
copies of an amended Prospectus, or, if required by such Rule 430A, a
post-effective amendment to the Registration Statement (including an amended
Prospectus), containing all information so omitted.
(i) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents required to
be filed with the Commission pursuant to Sections 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(j) The Company will effect the listing of the Common Stock
issued and sold pursuant to this Agreement on the NYSE.
(k) During a period of 120 days from the date hereof, the
Company will not, without the prior written consent of McDonald, sell, offer to
sell, contract to sell, or otherwise dispose of, directly or indirectly, any
shares of Common Stock, any other equity security of the Company or any security
convertible into or exchangeable or exercisable for Common Stock (except for
shares of Common Stock issued pursuant to this Agreement and the Pricing
Agreement, the grant of options or the issuance of shares of Common Stock upon
the exercise of outstanding options under the Company's existing stock option
plans and the issuance of shares of Common Stock upon the exercise of
outstanding warrants or upon the conversion of outstanding capital stock
pursuant to the terms thereof).
(l) The Company will use all commercially reasonable efforts
to do and perform all things required or necessary to be done and performed by
it under this Agreement prior to the Closing Time and will satisfy all
conditions precedent to the delivery of the Securities.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
during the period specified in Section 3(d) hereof (excluding any fees, costs or
expenses of counsel to the Underwriters), (ii) the printing of this Agreement
and the Pricing Agreement, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel and accountants, (v) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, which counsel fees shall not exceed $8,000,
(vi) the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and each amendment thereto, of the preliminary
prospectuses, and of the Prospectus and any amendments or supplements thereto,
(vii) the printing and delivery to the Underwriters of the Blue Sky Survey,
(viii) the fees and expenses of the Company's transfer agent, (ix) the fee of
the National
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Association of Securities Dealers, Inc. and (x) the fees and expenses incurred
in connection with the listing of the Securities on the NYSE.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i), the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses
relating to the transactions contemplated hereby, including the reasonable fees
and disbursements of counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with the consent of the
Representatives, at a later time and date, not later, however, than 5:30 P.M. on
the first business day following the date hereof, or at such later time and date
as may be approved by the Underwriters; and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Securities and any price related information
previously omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations within the prescribed time period, and
prior to Closing Time the Company shall have provided evidence satisfactory to
McDonald of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At the Closing Time the Underwriters shall have received:
(i) An opinion, dated the Closing Time, of ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and its subsidiaries,
substantially in the form set forth on Annex I attached hereto.
(ii) An opinion, dated the Closing Time, from ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq., General Counsel of ▇▇▇▇ Gift Centers, Inc. and Things
Remembered, Inc., substantially in the form set forth on Annex II
attached hereto.
(iii) An opinion, dated the Closing Time, from ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel of ▇▇▇▇ Vision Corporation,
substantially in the form set forth on Annex III attached hereto.
(iv) An opinion, dated the Closing Time, of ▇▇▇▇▇▇,
Halter & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, in form and
substance reasonably satisfactory to the Underwriters.
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(v) In giving their opinions required by subsections
(b)(i), (ii), (iii) and (iv), respectively, of this section, ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ shall each additionally state that
although such counsel has not undertaken to determine independently the
accuracy, completeness and fairness of the statements contained in the
Registration Statement or in the Prospectus and takes no responsibility
therefor, such counsel has participated in discussions and meetings
with officers and other representatives of the Company and discussions
with the auditors for the Company in connection with the preparation of
the Registration Statement and the Prospectus. Such counsel has not,
however, undertaken to determine independently and, therefore, does not
assume any responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. Nothing has come to such
counsel's attention that has caused such counsel to believe that (A)
the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or (B) the Prospectus, at the
Closing Time, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that in each case such counsel need not
express any opinion or belief with respect to the financial statements
or other financial data contained in the Registration Statement or the
Prospectus.
(c) At the Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Underwriters shall have received a certificate of the Chairman and Chief
Executive Officer of the Company and the chief financial or chief accounting
officer of the Company, dated as of the Closing Time, to the effect that (A)
there has been no such material adverse change, (B) the representations and
warranties in Section 1 are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (C) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (D) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission.
(d) At the time of the execution of this Agreement, the
Underwriters shall have received from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Peat
Marwick LLP, independent certified public accountants, a letter dated such date,
in form and substance previously approved by the Representatives, with respect
to the financial statements and certain financial information contained or
incorporated by reference in the Registration Statement and the Prospectus.
(e) At the Closing Time, the Underwriters shall have received
from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Peat Marwick LLP, independent
certified public accountants,
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a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than five days prior to the Closing Time.
(f) At the Closing Time, the Representatives shall have been
furnished with such documents and opinions as it may reasonably require for the
purpose of enabling counsel for the Underwriters to pass upon the issuance and
sale of the Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(g) At the time of the execution of this Agreement, the
Representatives shall have received from each of the executive officers and
directors of the Company a letter in which each such person agrees during a
period of 120 days from the date hereof, that such person will not, without the
prior written consent of McDonald, sell, offer to sell, contract to sell, or
otherwise dispose of, directly or indirectly, any shares of Common Stock, any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for shares of Common Stock, beneficially owned by
such person or with respect to which such person has the power of disposition,
other than as bona fide gifts.
(h) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives shall have received:
(i) A certificate, dated such Date of Delivery, of
the Chairman and Chief Executive Officer of the Company and of the
chief financial or chief accounting officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section
5(c) hereof remains true and correct as of such Date of Delivery.
(ii) An opinion, dated such Date of Delivery, of
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and its
Subsidiaries, substantially in the form set forth on Annex I attached
hereto.
(iii) An opinion, dated such Date of Delivery, from
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel of ▇▇▇▇ Gift Centers, Inc. and
Things Remembered, Inc., substantially in the form set forth on Annex
II attached hereto.
(iv) An opinion, dated such Date of Delivery, from
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel of ▇▇▇▇ Vision Corporation,
substantially in the form set forth on Annex III attached hereto.
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(v) An opinion, dated such Date of Delivery, of
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, in form
and substance reasonably satisfactory to the Underwriters.
(vi) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in form and
substance satisfactory to the Representatives and dated such Date of
Delivery, substantially the same in form and substance as the letter
furnished to the Underwriters pursuant to Section 5(e) hereof, except
that the "specified date" in the letter furnished pursuant to this
Section 5(h)(vi) shall be a date not more than five days prior to such
Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6 and 7 shall remain in effect.
SECTION 6. INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act, and
each officer and director of each Underwriter and any such controlling person to
the extent and in the manner set forth as follows:
(i) against any and all loss, liability, claim,
damage, and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the 1933 Act regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation; or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by a governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement
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or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply (A) to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus and (B) with respect to the Prospectus or
any preliminary prospectus to the extent that any loss, liability, claim, damage
or expense results from the fact that such Underwriter sold Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (and any amendment or
supplement thereto) in any case where such delivery is required by the 1933 Act
if the Company previously furnished copies thereof to such Underwriter and the
loss, liability, claim, damage or expense results from an untrue statement or
omission of a material fact contained in the Prospectus or any preliminary
prospectus which was corrected in the Prospectus (or any amendment or supplement
thereto).
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses (which fees and expenses shall be reasonable) of more than
one counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances; PROVIDED, HOWEVER, that if an indemnified
party shall have been advised in writing by counsel selected to represent the
indemnified parties that an actual or potential conflict of interest exists
between the position of that indemnified party and other indemnified parties,
the indemnified party in question shall have the right to select separate
counsel to participate in the defense of such action on behalf of such
indemnified party, and the indemnifying parties shall be responsible for the
reasonable fees and expenses of such separate counsel.
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SECTION 7. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and one or more Underwriters, as
incurred, in such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; PROVIDED,
HOWEVER, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act, and each officer and director of any
Underwriter and of any such control person, shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement and the Pricing Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF THE AGREEMENT. (a) The
Representatives may terminate this Agreement, by notice to the Company, at any
time at or prior to Closing Time (i) if there has been, since the date of this
Agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, or any
new outbreak of hostilities or material escalation thereof or other calamity or
crisis, the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Common Stock has been
suspended by the Commission, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either federal, New York or Ohio authorities.
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(b) If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one
or more of the Underwriters shall fail at Closing Time to purchase the Initial
Securities which it or they are obligated to purchase under this Agreement and
the Pricing Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements with such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Initial Securities, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in the
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
The Underwriters shall have the right to amend Schedule A
hereto by making such substitutions or corrections as indicated in the Pricing
Agreement.
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunications. Notices to the
Underwriters shall be directed to the Representatives, in care of ▇▇▇▇▇▇▇▇ &
Company Securities, Inc. at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Chairman, and notices to the Company
shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and Controller, telecopy number (216)
461-3489; and
SECTION 12. PARTIES. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Underwriters and the
Company and their
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respective successors. Nothing expressed or mentioned in this Agreement or the
Pricing Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein and therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No Purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAWS AND TIME. This Agreement and the
Pricing Agreement shall be governed by and construed in accordance with the
internal laws of the State of Ohio without giving effect to principles of
conflict of laws. Specified times of day refer to Cleveland Time. As used
herein, the term "business day" means any day on which the New York Stock
Exchange is open for business.
21
22
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
▇▇▇▇ NATIONAL CORPORATION
By:
----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED as of the date first above written:
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
BY: ▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
By:
----------------------------------
Name:
Title:
For themselves and as Representatives of the other Underwriters in Schedule A
hereto.
22
23
SCHEDULE A
Number
of Shares
Underwriters to be Purchased
------------ ---------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
Total 1,500,000
=========
24
Exhibit A
1,250,000 Shares
▇▇▇▇ NATIONAL CORPORATION
(A Delaware corporation)
CLASS A COMMON STOCK
(Par Value $.001 Per Share)
PRICING AGREEMENT
-----------------
July ____, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
as Representatives of the Several Underwriters
c/▇ ▇▇▇▇▇▇▇▇ & Company Securities, Inc.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated July
__, 1997 (the "Underwriting Agreement"), relating to the purchase by the
several Underwriters named in Schedule A thereto, for whom ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
▇▇▇▇▇▇▇▇ & Company Securities, Inc. and Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. are
acting as representatives, of the above shares of the Class A Common Stock, par
value $.001 per share, of ▇▇▇▇ National Corporation (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the
Company agrees with the Underwriters as follows:
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $_____.
2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $_____, being an amount equal to the
initial public offering price set forth above less $____ per share.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all
25
counterparts, will become a binding agreement among the Underwriters and the
Company in accordance with its terms.
Very truly yours,
▇▇▇▇ NATIONAL CORPORATION
By:
---------------------------------
Its:
---------------------------------
CONFIRMED AND ACCEPTED
as of the date first above written:
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
BY ▇▇▇▇▇▇▇▇ & COMPANY SECURITIES, INC.
By:
-----------------------------------
Name:
Title:
For themselves and as Representatives of the
other Underwriters in Schedule A to
the Underwriting Agreement.
26
Annex I
Form of Opinion of
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
--------------------------
(i) Each of the Company and the direct and indirect
subsidiaries of the Company (collectively, "Subsidiaries") is duly incorporated,
validly existing, and in good standing under the laws of the state of its
respective incorporation, and each of the Company and the Subsidiaries has the
corporate power and authority to own or lease its properties and to conduct its
business as described in the Prospectus, and the Company has the corporate power
and authority to execute, deliver and perform its obligations under the
Underwriting Agreement.
(ii) Each of the Company and ▇▇▇▇ National Group,
Inc. is duly qualified to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified would not individually or in the aggregate have a material
adverse effect on the business, condition (financial or other), results of
operations or properties of the Company and the direct and indirect subsidiaries
of the Company taken as a whole.
(iii) The authorized capital stock of the Company
consists of: (a) 24,000,000 shares of Class A Common Stock, $.001 par value per
share ("Class A Common Stock"), of which upon completion of this offering
13,625,030 shares are issued and outstanding; and (b) 1,000,000 shares of
Preferred Stock, without par value, none of which shares are issued and
outstanding. Except as otherwise stated in the Prospectus, all of the shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. The Securities to be
issued and sold by the Company pursuant to the Underwriting Agreement have been
duly authorized for issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered by the Company in the
manner contemplated by the Underwriting Agreement, will be validly issued and
fully paid and nonassessable. The issuance of the Securities to be issued and
sold by the Company is not subject to preemptive or other similar statutory
rights or contractual preemptive or other similar contractual rights pursuant to
any contract or agreement filed as an exhibit to either the Registration
Statement or any document incorporated therein by reference pursuant to Item 12
of Form S-3 under the Securities Act of 1933 and by which the Company is bound.
(iv) Except for the order of the Commission declaring
the Registration Statement effective, and permits and similar authorizations
required under the securities or Blue Sky laws of certain jurisdictions, and a
listing application for the Securities filed with the New York Stock Exchange,
and except for such consents that are required and have been received, no
consent, approval, authorization or other order from, and no filing with or
notice to, any Ohio or Federal regulatory body, administrative agency, or other
Ohio or Federal governmental authority, and no filing with or notice to, to the
best of our knowledge, any other person or entity, is
27
required for the due authorization, execution, delivery and performance by the
Company of the Underwriting Agreement.
(v) The Underwriting Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as rights to indemnity and contribution thereunder may be
limited under applicable securities laws.
(vi) All of the outstanding capital stock of each of
the Subsidiaries has been duly authorized and validly issued and is fully paid
and nonassessable and is owned, directly or indirectly, by the Company, and, to
the best of our knowledge, is free and clear of any security interest, adverse
claims, lien or encumbrance, and there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interest in any subsidiary.
(vii) The Company is not an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(viii) The execution and delivery by the Company of
the Underwriting Agreement and the performance of its obligations thereunder
will not (A) result in the violation of any Delaware corporate, Ohio or Federal
statute or regulation, or any order or decree known to us of any court or
governmental authority binding upon the Company or any of its subsidiaries or
their property, (B) except for the equity registration rights agreement dated
March 6, 1992 between the Company and the parties therein, conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or in creation of a lien under any of the provisions of the
Company's or any of its subsidiaries' Certificates of Incorporation or Bylaws or
any indenture, mortgage, deed of trust, loan agreement or other agreement filed
as an exhibit to the Registration Statement and by which the Company is bound,
or (C) result in the creation of any lien upon any of the properties or assets
of the Company or any of its subsidiaries.
We have participated in the preparation of the Registration
Statement and Prospectus. From time to time we have had discussions with
officers, Directors and employees of the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG
Peat Marwick LLP, the independent accountants who examined certain of the
consolidated financial statements of the Company and its subsidiaries included
in the Registration Statement and Prospectus, and your representatives
concerning the information contained in the Registration Statement and
Prospectus and the proposed responses to various items in Form S-3. Based
thereupon we are of the opinion that the Registration Statement, the Prospectus
and each amendment or supplement thereto and the documents incorporated by
reference therein comply as to form in all material respects with the
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, as applicable, and the applicable rules and regulations thereunder (except
for the operating statistics, financial statements and the notes thereto,
financial schedules, other financial, statistical and accounting data included
therein and except for the information referred to under the caption "Experts"
as having been included or incorporated by reference in the Registration
Statement and Prospectus on the authority of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Peat
Marwick LLP, each as experts).
28
We further are of the opinion that the statements contained in
Item 15 in part II of the Registration Statement, insofar as they purport to
summarize the provisions of the documents referred to therein, present fair
summaries of such provisions.
We do not know of any litigation or any governmental
proceedings or investigations, pending or threatened, required to be described
in the Prospectus that are not described as required, or of any contracts or
other documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
The Registration Statement has become effective under the
Securities Act of 1933; any required filing of the Prospectus or any supplement
thereto pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and, to the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose are pending before or threatened by the
Commission.
We have not independently verified and are not passing upon,
and do not assume any responsibility for, the accuracy, completeness or fairness
(except as set forth in the third preceding paragraph above) of the information
contained in the Registration Statement and Prospectus or incorporated therein
by reference. Based upon the participation and discussions described above,
however, no facts have come to our attention that cause us to believe that the
Registration Statement (except for the operating statistics, financial
statements and the notes thereto, financial schedules, other financial,
statistical and accounting data included or incorporated by reference therein
and except for the information referred to under the caption "Experts" as having
been included in the Registration Statement and Prospectus on the authority of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, as experts, as to all of which we express no view), at the
time it became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus (with the
foregoing exceptions), at such time or on the date hereof included or includes
any untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
29
Annex II
Form of Opinion of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(i) Each of ▇▇▇▇ Gift Centers, Inc. ("▇▇▇▇ Gift") and
Things Remembered, Inc. ("TRI"); (▇▇▇▇ Gift and TRI are collectively referred to
as the "Company") and TRI's Subsidiary (defined as ▇▇▇▇ Management Services,
Inc.) is duly incorporated, validly existing, and in good standing under the
laws of the state of its respective incorporation, with corporate power and
authority to own or lease its properties and to conduct its business as
described in the Prospectus. Each of the Company and TRI's Subsidiary is duly
qualified to do business and is in good standing in all jurisdictions where it
is required to be so qualified, except where the failure to be so qualified
would not individually or in the aggregate have a material adverse effect on the
business. condition (financial or other), results of operations or properties of
the Company and TRI's Subsidiary taken as a whole.
(ii) Except as disclosed in the Registration
Statement and the Prospectus, there is no action, suit, investigation or
proceeding, governmental or otherwise, pending or, to the best of my knowledge,
threatened against ▇▇▇▇ National Corporation, ▇▇▇▇ National Group, Inc., the
Company or TRI's Subsidiary, (A) in which an injunction or order has been
entered preventing the issuance or sale of the Securities, (B) that seeks to
restrain, enjoin or prevent the issuance of the Securities or any of the
transactions contemplated thereby, or (C) questions the legality or validity of
any such transaction or that seeks to recover damages or obtain other relief in
connection with any such transaction.
(iii) Neither ▇▇▇▇ Gift, TRI nor TRI's Subsidiary is
in violation of its Certificate or Incorporation or Bylaws.
Except as set forth in the Prospectus, I am not aware of (A)
the existence of any default (or any event the occurrence of which with notice
or lapse of time, or both, would constitute a default) under any bond,
indenture, mortgage, deed of trust, note, loan or credit agreement or other
material agreement or instrument filed as an exhibit to either the Registration
Statement or any document incorporated therein by reference pursuant to Item 12
of Form S-3 under the 1933 Act and to which the Company or TRI's Subsidiary is a
party or to which any of them or their property or assets is subject or (B) the
issuance of any notice or pendency or threat of any investigation or review by
any governmental entity with respect to (1) any alleged violation by the Company
or TRI's Subsidiary of any statute, law, ordinance, rule, regulation, judgment
decree or order of any governmental entity, agency or body, or (2) any alleged
failure by the Company or TRI's Subsidiary to have all permits, certificates,
licenses, approvals and other authorizations required in connection with the
operation of its business, which, with respect to clauses (A) and (B) herein
would (individually or in the aggregate) have a material adverse effect on the
business, condition (financial or other), results of operations or properties of
the Company and TRI's Subsidiary taken as a whole.
30
I have reviewed and read the Registration Statement and
Prospectus. I have not, however, independently verified and am not passing upon,
and do not assume any responsibility for, the accuracy, completeness or fairness
of the information contained in the Registration Statement and Prospectus or
incorporated by reference therein. Based upon my review of the Registration
Statement and Prospectus described above, however, no facts have come to my
attention that cause me to believe that the Registration Statement (except for
the operating statistics, financial statements and the notes thereto, financial
schedules, other financial, statistical and accounting data included therein and
except for the information referred to under the caption "Experts" as having
been included or incorporated by reference in the Registration Statement and
Prospectus on the authority of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Peat Marwick LLP, as
experts, as to all of which I express no view), at the time it became effective
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus (with the foregoing exceptions) as of its
date or on the date hereof included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
There is no litigation or governmental proceedings or
investigations, pending, or, to the best of my knowledge, threatened against the
Company or TRI's Subsidiary, required to be described in the Registration
Statement and the Prospectus that are not described as required, or of any
contracts or other documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described and filed as required.
31
Annex III
Form of Opinion of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(i) Each of ▇▇▇▇ Vision Corporation (the "Company")
and the Subsidiaries (defined as Pearle, Inc., Western States Optical, Inc., Bay
Cities Optical Company, ▇▇▇▇ Vision Services, Inc., ▇▇▇▇ Management Services,
Inc. and ▇▇▇▇ Lens Supply, Inc.) is duly incorporated, validly existing, and in
good standing under the laws of the state of its respective incorporation, with
corporate power and authority to own or lease its properties and to conduct its
business as described in the Prospectus. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified would not individually or in the aggregate have a material
adverse effect on the business, condition (financial or other), results of
operations or properties of the Company and the Subsidiaries taken as a whole.
(ii) Except as disclosed in the Registration
Statement and the Prospectus, there is no action, suit, investigation or
proceeding, governmental or otherwise, pending or, to the best of my knowledge,
threatened against the Company or any of the Subsidiaries, (A) in which an
injunction or order has been entered preventing the issuance or sale of the
Securities, (B) that seeks to restrain, enjoin or prevent the issuance of the
Securities or any of the transactions contemplated thereby, or (C) questions the
legality or validity of any such transaction or that seeks to recover damages or
obtain other relief in connection with any such transaction.
(iii) Neither the Company nor any of the Subsidiaries
is in violation of their respective Certificate of Incorporation or Bylaws.
Except as set forth in the Prospectus, I am not aware of (A)
the existence of any default (or any event the occurrence of which with notice
or lapse of time, or both, would constitute a default) under any bond,
indenture, mortgage, deed of trust, note, loan or credit agreement or other
material agreement or instrument filed as an exhibit to either the Registration
Statement or any document incorporated therein by reference pursuant to Item 12
of Form S-3 under the 1933 Act and to which the Company or any of the
Subsidiaries is a party or to which any of them or their property or assets is
subject or (B) the issuance of any notice or pendency or threat of any
investigation or review by any governmental entity with respect to (1) any
alleged violation by the Company or any of the Subsidiaries of any statute, law,
ordinance, rule, regulation, judgment decree or order of any governmental
entity, agency or body, or (2) any alleged failure by the Company or any of the
Subsidiaries to have all permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of its business, which,
with respect to clauses (A) and (B) herein would (individually or in the
aggregate) have a material adverse effect on the business, condition (financial
or other), results of operations or properties of the Company and the
Subsidiaries taken as a whole.
32
I have reviewed and read the Registration Statement and
Prospectus. I have not, however, independently verified and am not passing upon,
and do not assume any responsibility for, the accuracy, completeness or fairness
of the information contained in the Registration Statement and Prospectus or
incorporated therein by reference. Based upon my review of the Registration
Statement and Prospectus described above, however, no facts have come to my
attention that cause me to believe that the Registration Statement (except for
the operating statistics, financial statements and the notes thereto, financial
schedules, other financial, statistical and accounting data included or
incorporated by reference therein and except for the information referred to
under the caption "Experts" as having been included in the Registration
Statement and Prospectus on the authority of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG Peat
Marwick LLP, as experts, as to all of which I express no view), at the time it
became effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (with the foregoing
exceptions) as of its date or on the date hereof included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
There is no litigation or governmental proceedings or
investigations, pending, or, to the best of my knowledge, threatened against the
Company or any of the Subsidiaries, required to be described in the Registration
Statement and the Prospectus that are not described as required, or of and
contracts or other documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described and filed as required.