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EXHIBIT 1.1
7,900,000 SHARES
AMERICAN ITALIAN PASTA COMPANY
CLASS A COMMON STOCK, $.001 PAR VALUE
UNDERWRITING AGREEMENT
October __, 1997
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_____________, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
BT Alex. ▇▇▇▇▇ International
▇▇▇▇▇▇▇ Sachs International
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
American Italian Pasta Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below), and
certain shareholders of the Company (the "FIRM SELLING SHAREHOLDERS") named in
Part A of Schedule I hereto propose to sell to the several Underwriters (as
defined below), an aggregate of 7,900,000 shares of Class A Common Stock, par
value $.001 per share, of the Company (the "FIRM SHARES"), of which 5,310,000
shares are to be issued and sold by the Company (the "COMPANY SHARES") and
2,590,000 shares (the "FIRM SHAREHOLDERS SHARES") are to be sold by the Firm
Selling Shareholders.
It is understood that, subject to the conditions hereinafter stated,
6,320,000 Firm Shares (the "U.S. FIRM SHARES"), consisting of [4,248,000]
Company Shares (the "U.S. COMPANY SHARES") and [2,072,000] Firm Shareholders
Shares, will be sold to the several U.S. Underwriters named in Schedule II
hereto (the "U.S. UNDERWRITERS") in connection with the offering and sale of
such U.S. Firm Shares in the United States and Canada to United States and
Canadian Persons (as such terms are defined in the Agreement Between U.S. and
International Underwriters
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of even date herewith), and 1,580,000 Firm Shares (the "INTERNATIONAL SHARES"),
consisting of [1,062,000] Company Shares (the "INTERNATIONAL COMPANY SHARES")
and [518,000] Firm Shareholders Shares, will be sold to the several
International Underwriters named in Schedule III hereto (the "INTERNATIONAL
UNDERWRITERS") in connection with the offering and sale of such International
Shares outside the United States and Canada to persons other than United States
and Canadian Persons. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Alex. ▇▇▇▇▇ & Sons
Incorporated, ▇▇▇▇▇▇▇, Sachs & Co. and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company shall act as
representatives (the "U.S. REPRESENTATIVES") of the several U.S. Underwriters,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited, Alex. ▇▇▇▇▇ & Sons
Incorporated, ▇▇▇▇▇▇▇ Sachs International and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company 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."
Certain shareholders of the Company named in Part B of Schedule I hereto
(the "ADDITIONAL SELLING SHAREHOLDERS," and together with the Firm Selling
Shareholders, the "SELLING SHAREHOLDERS") severally propose to sell to the
several U.S. Underwriters, not more than an aggregate of 1,185,000 additional
shares of Class A Common Stock, par value $.001 per share, of the Company (the
"ADDITIONAL SHARES"), each Additional Selling Shareholder selling up to the
amount set forth opposite such Additional Selling Shareholder's name in Part B
of Schedule I hereto, 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 Class A Common Stock, par value $.001 per share granted
to the U.S. Underwriters in Section hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares of
Class A Common Stock, par value $.001 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 and the Selling Shareholders are
hereinafter sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (File No. 333-32827)
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
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statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or 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 the 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) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation 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
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extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company.
(d) This Agreement has been duly authorized, executed and delivered by
the Company.
(e) Upon the closing of the offering of the Shares, the authorized, is
sued and outstanding capital stock of the Company will be as set forth in
the Prospectus under the caption "Capitalization" in the column entitled
"Pro Forma As Adjusted," and the authorized capital stock of the Company
conforms as to legal matters to the description thereof contained in the
Prospectus.
(f) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly issued,
fully paid and non-assessable.
(g) The Shares to be sold by the Company and the shares of Class B
Non-Voting Common Stock, par value $.001 per share, ("CLASS B COMMON
STOCK") to be issued in the recapitalization described in the Prospectus
under the caption "Prospectus Summary -- Recapitalization" (the
"RECAPITALIZATION") have been duly authorized and the Shares, when issued
and delivered in accordance with the terms of this Agreement, and such
shares of Class B Common Stock when issued in the Recapitalization will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares and Class B Common Stock will not be subject to any preemptive or
similar rights.
(h) the issuance of Class B Common Stock in the Recapitalization and
the bank refinancing (the "BANK REFINANCING") on the terms set forth in
the Commitment Letter from Bankers Trust Company dated July 30, 1997 and
as described under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources" and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
the Amended and Restated Stockholders Agreement dated as of September ,
1997 among the Company, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged
Equity Fund II, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III, L.P., ▇▇▇▇▇▇ ▇.
▇▇▇▇ Group, Inc., Citicorp Venture Capital, Ltd. and the other signatories
thereto (the "STOCKHOLDERS AGREEMENT") will not contravene any provision
of applicable law or the certificate of incorporation or
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by-laws of the Company or any agreement or other instrument binding upon
the Company that is material to the Company, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
issuance of the Class B Common Stock in the Recapitalization, for the Bank
Refinancing or for the performance by the Company of its obligations under
this Agreement or the Stockholders Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares or the issue of Class B
Common Stock in the Recapitalization.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(j) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company is a party or to
which any of the properties of the Company 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.
(k) The Company possesses all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business, except where the failure to possess
such certificates, authorizations, or permits would not have a material
adverse effect on the Company, and the Company has not 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 result in
a material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company, except as described
in or contemplated by the Prospectus.
(l) 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
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all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(n) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business
and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a material adverse effect on the Company.
(o) 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 Company.
(p) Except for the Stockholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(q) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned
by it which is material to the business of the Company, 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 materially interfere with the use made and
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proposed to be made of such property by the Company; and any real property
and buildings held under lease by the Company are held by the Company
under valid, subsisting and enforceable leases with such exceptions as are
not material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company, except
as described in or contemplated by the Prospectus.
(r) The Company owns or possesses, 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 the
Company in connection with the business now operated by the Company, and
the Company has not 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 or
operations of the Company.
(s) The Company is 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 the Company is engaged;
the Company has not been refused any insurance coverage sought or applied
for; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings, business or
operations of the Company, except as described in or contemplated by the
Prospectus.
(t) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company has
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course of
business; (ii) the Company has not purchased any of its 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 (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company,
except in each case as described in or contemplated by the Prospectus
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(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement).
(u) The Company has no subsidiaries.
(v) None of the Company's outstanding securities are rated by any
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act.
(w) (i) The Stockholders Agreement has been executed and delivered by
the Company and the employment agreements of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "EMPLOYMENT
AGREEMENTS") as described in the Prospectus have been executed and
delivered by such persons and the Company and each such Employment
Agreement is in full force and effect.
2. Representations and Warranties of the Selling Shareholders. Each of the
Selling Shareholders, severally and not jointly, represents and warrants to and
agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, and, if applicable, the Custody Agreement signed by ▇▇▇▇▇▇▇▇
Holdings, L.P., a Firm Selling Shareholder and Republic New York
Securities Corporation as Custodian, relating to the deposit of the
Shares to be sold by such Firm Selling Shareholder (the "CUSTODY
AGREEMENT"), including the Power of Attorney appointing certain
individuals as such Firm Selling Shareholder's attorneys-in-fact to
the extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement (the "POWER OF ATTORNEY") and the
Shareholders Agreement will not contravene any provision of applicable
law, or the certificate of incorporation or by-laws of such Selling
Stockholder (if such Selling Shareholder is a corporation), or any
agreement or other instrument binding upon such Selling Shareholder or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement or, if applicable, the Custody Agreement
including the Power of Attorney of such Selling Stockholder or the
Shareholders Agreement except such as
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may be required by the securities or Blue Sky laws of the various states
and foreign jurisdictions in connection with the offer and sale of the
Shares.
(c) Such Selling Shareholder has, subject to the proviso of this
paragraph (c), and on the Closing Date or, if applicable, on the Option
Closing Date will have, valid title to the Shares to be sold by such
Selling Shareholder and the legal right and power, and all authorization
and approval required by law, to enter into this Agreement and to sell,
transfer and deliver the Shares to be sold by such Selling Shareholder;
provided that ▇▇▇▇▇▇▇▇ Holdings, L.P., a Firm Selling Shareholder will
have valid title to the Shares to be sold by such Firm Selling Shareholder
and the legal right and power, and all authorization and approval required
by law, to sell, transfer and deliver the Shares to be sold on the Closing
Date upon release of the lien on such Firm Selling Stockholder's Shares
established in favor of Republic National Bank of New York ("RNB") on June
30, 1997 when such Firm Selling Shareholder pledged such Shares to RNB as
collateral for a personal loan.
(d) The Shares to be sold by such Selling Shareholder pursuant to this
Agreement have been duly authorized and are validly issued, fully paid and
non-assessable.
(e) The Stockholders Agreement and, if applicable, the Custody
Agreement including the Power of Attorney have been duly authorized,
executed and delivered by such Selling Shareholder and are valid and
binding agreements of such Selling Shareholder.
(f) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other encumbrances.
(g) (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 and the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph 2(g) apply only to statements or omissions in
the Registration Statement or the Prospectus based upon
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information relating to such Selling Shareholder furnished to the Company
in writing by such Selling Shareholder for use therein.
(h) Such Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement,
and other than as permitted by the Securities Act, such Selling
Shareholder has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the
Shares.
3. Agreements to Sell and Purchase. Each of the Company and the Firm
Selling Shareholders, severally and not jointly, agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from such Seller at $____ per
share (the "PURCHASE PRICE") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the number of Firm Shares to be sold by such Seller as the
number of Firm Shares set forth in Schedule II or Schedule III hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Additional Selling
Shareholders agree to sell to the U.S. Underwriters up to an aggregate of
1,185,000 Additional Shares and the U.S. Underwriters shall have a one-time
right to purchase, severally and not jointly, up to 1,185,000
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 (as defined below) but not earlier than the Closing Date nor earlier than
the second business day after the giving of the notice hereinafter referred to
nor later than ten business days after the date of such notice. Additional
Shares may be purchased as provided in Section 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
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Shares set forth in Schedule II hereto opposite the name of such U.S.
Underwriter bears to the total number of U.S. Firm Shares. The Additional
Shares to be purchased by the U.S. Underwriters hereunder and the U.S. Firm
Shares are hereinafter collectively referred to as the "U.S. SHARES."
Each Seller hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (except with respect to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stockholders (as defined in the Registration Statement and Prospectus), a
written consent must be received from all the U.S. Representatives) 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 Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock (whether such
shares or any such securities are now owned by such Seller or are hereafter
acquired) 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 Shares to
be sold hereunder, (B) the issuance by the Company of shares of Common Stock
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised in
writing, (C) the issuance of shares in connection with the Recapitalization,
(D) the issuance of shares in connection with the conversion from time to time
of Class A Common Stock into Class B Common Stock (and vice versa), (E) the
grants of stock options to employees, directors or consultants pursuant to the
terms of a plan disclosed in the Registration Statement which first become
exercisable more than 180 days after the date of the Prospectus, (F) the
issuance by the Company of shares of Common Stock pursuant to any 401(k) plan,
(G) bona fide charitable donations or estate planning dispositions, provided
that, prior to such transfer, the transferee in any such transaction agrees in
writing to be bound by the terms of this paragraph and the form and substance
of such writing has received written approval from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, or (H) transfers due to the death or disability of a seller,
provided that the transferee agrees in writing to be bound by the terms of this
paragraph and the form and substance of such writing has received written
approval from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In addition, each Selling
Shareholder agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated (except with respect to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stockholders (as
defined in the Registration Statement and Prospectus), a written consent must
be received from all the U.S. Representatives) on behalf of the Underwriters,
it will not, during the period ending 180 days after the date of the
Prospectus, make any
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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.
The Company hereby confirms its engagement of ▇▇▇▇▇▇▇, Sachs & Co. as, and
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. hereby confirms its agreement with the Company to render
services as, a "qualified independent underwriter" within the meaning of
Section (b)(15) of Rule 2720 of the Conduct Rules of the National Association
of Securities Dealers, Inc. (the "NASD") with respect to the offering and sale
of the Shares. ▇▇▇▇▇▇▇, Sachs & Co., in its capacity as qualified independent
underwriter and not otherwise, is referred to herein as the "QIU." The Company
and ▇▇▇▇▇▇▇, Sachs & Co. hereby agree that $10,000 of the underwriting
discounts to be received by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. pursuant to this Section 3
will be compensation for its services as QUI hereunder. The Public Offering
Price (as defined in Section hereof) shall not be higher than the maximum
price recommended by ▇▇▇▇▇▇▇, Sachs & Co. acting as QIU.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
U.S.$_____ 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.
5. Payment and Delivery. Payment for the Firm Shares to be sold by the
Company and the Firm Selling Shareholder shall be made to each such Seller in
Federal or other funds immediately available in New York City against delivery
of such Firm Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on ____________, 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 to be sold by Additional Selling
Shareholders shall be made to each such Selling Shareholder in Federal or other
funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on the date specified in the notice described
in Section or at such other time on the same or on such other date, in any
event not later than
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_______, 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 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.
6. Conditions to the Underwriters' Obligations. The obligations of the
Company and the Selling Shareholders to sell the Shares to the Underwriters and
the several obligations of the Underwriters to purchase and pay for the Shares
on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than _______ (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, there shall not have occurred any change, or
any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company, 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 by an executive officer of
the Company, acting in such capacity but not personally, to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company
has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
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The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received a certificate from the
Attorneys-in-Fact (as defined in the Custody Agreements) on behalf of the Firm
Selling Shareholder, dated the Closing Date and signed by such
Attorneys-in-Fact, to the effect that the representations and warranties of
such Selling Shareholder contained in this Agreement are true and correct as of
the Closing Date and that such Selling Shareholder has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification;
(ii) upon the closing of the offering of the Shares, the authorized,
issued and outstanding capital stock of the Company will be as set forth
in the Prospectus under the caption "Capitalization" in the column
entitled "Pro Forma As Adjusted," and the authorized capital stock of the
Company conforms as to legal matters to the description thereof contained
in the Prospectus;
(iii) the shares of Common Stock (including the Shares to be sold by
the Selling Shareholders) outstanding prior to the issuance of the Shares
to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable;
(iv) the Shares and the shares of the Class B Common Stock in the
Recapitalization have been duly authorized and the shares, when issued and
delivered in accordance with the terms of this Agreement, and the shares
of the Class B Common Stock when issued and delivered in connection with
the recapitalization will be non-assessable, and the issuance of such
Shares and Class
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B Common Stock will not be subject to any preemptive rights or rights in
the nature of preemptive rights;
(v) this Agreement has been duly authorized, executed and delivered by
the Company;
(vi) the issuance of Class B Common Stock in the Recapitalization and
the execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement and the Stockholders
Agreement will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or, to the best of
such counsel's knowledge, any agreement or other instrument binding upon
the Company that is material to the Company, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the issuance of the Class B
Common Stock, for the Bank Refinancing or for the performance by the
Company of its obligations under this Agreement and the Stockholders
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares by the U.S. Underwriters or the issue of Class B Common Stock or
foreign securities laws or regulations in connection with the offer and
sale of the Shares by the International Underwriters;
(vii) the statements (A) in the Prospectus under the captions "Risk
Factors -- Anti-Takeover Effect of Certain Charter, By-law and Statutory
Provisions," "Management -- Employment Agreements," " -- Management Bonus
Plan," " -- Stock Option Plans" and " -- 401(k) Profit Sharing Plan,"
"Certain Relationships and Related Transactions," "Certain United States
Federal Income Tax Considerations for non-U.S. Holders," "Description of
Capital Stock," "Underwriters" and (B) in the Registration Statement in
Items 14 and 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present in all material respects the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
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(viii) to such counsel's knowledge no legal or governmental
proceedings are pending or threatened to which the Company is a party or
to which any of the properties of the Company is subject 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;
(ix) the Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
(x) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
and other financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to believe
that (except for financial statements and schedules and other financial
and statistical data as to which such counsel need not express any belief)
the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for financial
statements and schedules and other financial and statistical data as to
which such counsel need not express any belief) the Prospectus contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) the Underwriters shall have received on the Closing Date an opinion of
counsel for each of the Selling Shareholders dated the Closing Date, to the
effect that:
(i) this Agreement has been duly authorized, executed and delivered
by or on behalf of each Selling Shareholder;
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(ii) the execution and delivery by each Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement and, if applicable, the Custody Agreement including the Power of
Attorney of such Selling Shareholder and the Stockholders Agreement will
not contravene any provision of applicable law, or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon such
Selling Shareholder or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement or, if applicable, the Custody Agreement
including the Power of Attorney of such Selling Shareholder or the
Stockholders Agreement, except such as may be required by the securities
or Blue Sky laws of the various states and foreign jurisdictions in
connection with offer and sale of the Shares;
(iii) each of the Selling Shareholders has valid title to the Shares
to be sold by such Selling Shareholder and the legal right and power, and
all authorization and approval required by law, to enter into this
Agreement, if applicable, the Custody Agreement including the Power of
Attorney of such Selling Shareholder and the Stockholders Agreement and to
sell, transfer and deliver the Shares to be sold by such Selling
Shareholder;
(iv) the Stockholders Agreement and, if applicable, the Custody
Agreement including the Power of Attorney of each Selling Shareholder have
been duly authorized, executed and delivered by such Selling Shareholder;
(v) delivery of the Shares to be sold by each Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other encumbrances;
and
(vi) such counsel (A) has no reason to believe that the Registration
Statement and the prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the
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statements therein not misleading and (B) has no reason to believe that
the Prospectus contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; such opinion shall relate only to information furnished in
writing by or on behalf of the Selling Shareholder represented by such
counsel expressly for use in the Registration Statement or Prospectus.
(f) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(d)(iv) (but only
with respect to the Shares), 6(d)(v), 6(d)(vii) (but only as to the statements
in the Prospectus under "Underwriters") and 6(d)(x) above.
With respect to Section 6(d)(x) above, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, may state that their opinion and belief are based up
on their 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 opinions of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ and counsel for each
Selling Shareholder, described in Sections 6(d) and 6(e) above shall be
rendered to the Underwriters at the request of the Company or the Selling
Shareholders, as the case may be, and shall so state therein.
(g) RNB shall have (i) released its lien on all Shares to be sold by
the Firm Selling Stockholder and (ii) delivered executed UCC Form 3s evidencing
the termination by RNB of all recorded security interests in such Shares.
(h) The underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters, from
Ernst & Young LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
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(i) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date.
(j) 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 issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
(k) The Company shall have received a bank commitment for a new
credit agreement in connection with the Bank Refinancing as described in
the Prospectus.
7. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, five 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
Section 7(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
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result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(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 , 1998 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees
to pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities laws
and all expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection
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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 National Association of
Securities Dealers, Inc., (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 Company 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 Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show with the prior
approval of the Company, (ix) the fees of the QIU pursuant to Section 3 hereof
and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, each Selling
Shareholder agrees to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including the fees,
disbursements and expenses of such Selling Shareholder's counsel, but not
including any of the expenses payable by the Company as set forth above. It is
understood, however, that except as provided in this Section, Section 9 entitled
"Indemnity and Contribution," and the last paragraph of Section 11 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any
of the Shares by them and any advertising expenses connected with any offers
they may make and their out-of-pocket costs with respect to any "road show"
undertaken in connection with the marketing of the offering of the Shares.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in
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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
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.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers 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, each Underwriter and each person, if any who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act and the QIU and each person, if any, who controls any
QIU within the meaning of 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, but only with reference to information relating to such
Selling Shareholder furnished in writing by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act 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
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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, 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) The Company will indemnify and hold harmless ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
in its capacity as QIU, against any losses, claims, damages or liabilities,
joint or several, to which the QIU may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
QIU for any legal or other expenses reasonably incurred by the QIU in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a), 9(b), 9(c) or 9(d), 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 (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying 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 (i) the fees
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and expenses of more than one separate firm (in addition to any local counsel)
for all Underwriters and all persons, if any, who controlling any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, (iii) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Selling Shareholders and all persons, if any, who control any Selling
Shareholder within the meaning of either such Section and (iv) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the QIU and all persons who control the QIU within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters, and such
control persons of any Underwriters, such firm shall be designated in writing
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any such separate firm for
the Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any
such separate firm for the Selling Shareholders and such control persons of any
Selling Shareholders, such firm shall be designated in writing by the Selling
Shareholders selling a majority of the amount of shares being sold by the
Selling Shareholders under this Agreement. In the case of any such separate
firm for the QIU and such control persons of the QIU, such firm shall be
designated in writing by the QIU. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 60 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.
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(f) To the extent the indemnification provided for in Section 9(a),
9(b), 9(c) or 9(d) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 9(f) (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 9(f)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers, the Underwriters and the QIU shall
be deemed to be in the same proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Sellers, 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 and the fee
payable to ▇▇▇▇▇▇▇, Sachs & Co. in its capacity as QIU pursuant to Section 3
hereof and not in its capacity as an Underwriter, respectively bear to the sum
of the aggregate Public Offering Price of the Shares and the fee payable to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in its capacity as QIU pursuant to Section 3 hereof and not
in its capacity as an Underwriter. The relative fault of the Sellers on the one
hand and the Underwriters or the QIU 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 Sellers or by either of
the Underwriters or the QIU and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 3 are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(g) The Sellers, the Underwriters and the QIU agree that it would not be
just or equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 9(f). 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
25
27
any such action or claim. Notwithstanding the provisions of this Section 9, 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. Notwithstanding the
provisions of this Section 9, no Selling Shareholder shall be required to
contribute any amount in excess of the amount of net proceeds received by such
selling Shareholder with respect to the Shares sold by such Selling
Shareholder. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section and
the representations, warranties and other statements of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of any termination of this Agreement, any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, any Selling Shareholder or any person controlling any Selling
Shareholder, the QIU or any person controlling the QIU, or the Company, the
Company's officers or directors or any person controlling the Company and
acceptance of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date 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, trading of any securities of
the Company shall have been suspended on any exchange or in any
over-the-counter market, a general moratorium on commercial banking activities
in New York shall have been declared by either Federal or New York State
authorities or 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 in the case of any of the events
specified in clauses 10(a)(i) through 10(a)(iv), such event, singly or together
with any other such event, makes it, in your judgment, impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus.
26
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11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule II or
Schedule III bears to the aggregate number of Firm Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Shareholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders. In any
such case either you or the relevant Sellers 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 U.S. Underwriter or U.S. 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 U.S. Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting U.S. Underwriter from liability in respect of
any default of such U.S. 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 any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller
27
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shall be unable to perform its obligations under this Agreement, the Sellers
will reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
AMERICAN ITALIAN PASTA COMPANY
By:
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇▇▇▇ HOLDINGS, L.P.
By:
-------------------------------------
Attorney-in-Fact
THE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LEVERAGED
EQUITY FUND II, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity
Holdings, Inc., its general partner
By:
-------------------------------------
28
30
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL
PARTNERS III, L.P.
By: MSCP III, L.P., its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its general partner
By:
--------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL
INVESTORS, L.P.
By: MSCP III, L.P., its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its general partner
By:
--------------------------------------
Name:
Title:
MSCP III 892 INVESTORS, L.P.
By: MSCP III, L.P., its general partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III,
Inc., its general partner
By:
--------------------------------------
Name:
Title:
29
31
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇ ▇. ▇▇▇▇ & COMPANY
Acting severally on behalf of themselves and the several U.S. Underwriters
named in Schedule II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INTERNATIONAL LIMITED
BT ALEX. ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
▇▇▇▇▇▇ ▇. ▇▇▇▇ & COMPANY
Acting severally on behalf of themselves and the several International
Underwriters named in Schedule III hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By:
-------------------------------------
Name:
Title:
30
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SCHEDULE I
PART A
NUMBER OF FIRM SHARES
SELLING SHAREHOLDER TO BE SOLD
------------------------------------- ---------------------
▇▇▇▇▇▇▇▇ Holdings, L.P. 630,000
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged
Equity Fund II, L.P. 1,375,893
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Partners III, L.P. 584,107
---------------------
Total............................ 2,590,000
=====================
33
PART B
NUMBER OF ADDITIONAL
SELLING SHAREHOLDER SHARES TO BE SOLD
---------------------------------------------- --------------------
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Leveraged Equity Fund II,
L.P. ........................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III, L.P......
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Investors, L.P.........
MSCP III 892 Investors, L.P...................
--------------------
Total..................................... 1,185,000
====================
2
34
SCHEDULE II
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------- ---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated...........
BT Alex. ▇▇▇▇▇ Incorporated.................
▇▇▇▇▇▇▇, Sachs & Co.........................
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company....................
---------------------
Total U.S. Firm Shares 6,320,000
=====================
35
SCHEDULE III
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------- ---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated Limited...
BT Alex. ▇▇▇▇▇ International................
▇▇▇▇▇▇▇ Sachs International.................
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company....................
---------------------
Total International Shares 1,580,000
=====================
36
EXHIBIT A
[FORM OF LOCK-UP LETTER]
October __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
BT Alex. ▇▇▇▇▇ International
▇▇▇▇▇▇▇ Sachs International
▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with American Italian Pasta Company, a Delaware corporation (the "COMPANY"),
and certain shareholders of the Company providing for the public offering (the
"PUBLIC OFFERING") by the several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
MSIL (the "UNDERWRITERS") of 5,900,000 shares (the "SHARES") of Class A Common
Stock, par value $.001 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, it 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
37
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 (whether 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) bona fide charitable donations or
estate planning dispositions, provided that, prior to such transfer, the
transferee in any such transaction agrees in writing to be bound by the terms
of this agreement and the form and substance of such writing has received
written approval from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or (b) transfers due to the death or
disability of a seller, provided that the transferee agrees in writing to be
bound by the terms of this agreement and the form and substance of such writing
has received written approval from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it 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. This letter agreement will terminate in
the event that the Public Offering has not been consummated on or prior to
March 31, 1998. 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
2