Exhibit 1.1
3,200,000 Shares
THE JPM COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
November __, 1997
▇▇▇▇▇▇ BROTHERS INC.
Advest, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The JPM Company, a Pennsylvania corporation (the "Company"), and
certain shareholders of the Company named in Schedule 2 hereto (the "Selling
Shareholders"), propose to sell an aggregate of 3,200,000 shares (the "Firm
Stock") of the Company's Common Stock, par value $.000067 per share (the "Common
Stock"). Of the 3,200,000 shares of the Firm Stock, 2,000,000 are being sold by
the Company and 1,200,000 by the Selling Shareholders. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ are hereinafter referred to as the "Management
Selling Shareholders" and ▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Viva ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇
and ▇▇▇▇ ▇. ▇▇▇▇ are hereinafter referred to as the "Denron Selling
Shareholders." In addition, the Company proposes to grant to the Underwriters
named in Schedule 1 hereto (the "Underwriters") an option to purchase up to an
additional 480,000 shares of the Common Stock on the terms and for the purposes
set forth in Section 3 (the "Option Stock"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "Stock." This is to
confirm the agreement concerning the purchase of the Stock from the Company and
the Selling Shareholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 and Amendments ____,
____ and ____ thereto, with respect to the Stock has (i) been
prepared by the Company in conformity with the requirements of the
United States Securities Act of 1933, as
amended (the "Securities Act") and the rules and regulations (the
"Rules and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act. Copies of such registration statement and the
amendment[s] thereto have been delivered by the Company to you as the
Underwriters. As used in this Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus
included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent
of the Underwriters pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including any documents
incorporated by reference therein at such time and all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with
Section 6(a) hereof and deemed to be a part of the Registration
Statement as of the Effective Time pursuant to paragraph (b) of Rule
430A of the Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. Reference
made herein to any Preliminary Prospectus or to the Prospectus shall
be deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the United
States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects
to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the
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applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement
thereto) 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;
provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of any Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and 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.
(d) The Company and each of its subsidiaries (as
defined in Section 17) have been duly incorporated and are
validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of
their respective businesses requires such qualification, and
have all power and authority, and all required licenses,
permits, clearances, certifications, registrations, approvals,
consents and franchises, necessary to own or lease and operate
their respective properties and to conduct the businesses in
which they are engaged; and none of the subsidiaries of the
Company (other than Denron, Inc. and Electronica Pantera, S.A.
de C.V. is a "significant subsidiary", as such term is defined
in Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus, and none of such shares have been issued in
violation of any preemptive rights; all of the issued shares
of capital stock of each subsidiary of the Company have been
duly and
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validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares)
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims; and no
options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership
interests in any subsidiary of the Company are outstanding.
(f) The offers and sales of the outstanding shares of
the Company's capital stock, whether described in the
Registration Statement or otherwise, were made in conformity
with applicable federal and state securities laws.
(g) The shares of the Stock have been duly and
validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable and the issuance thereof
will not be subject to any preemptive rights, right of first
refusal or similar rights; and the Stock will conform to the
description thereof contained in the Prospectus.
(h) This Agreement has been duly authorized, executed
and delivered by the Company.
(i) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or
by-laws or similar governing instruments of the Company or any
of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets;
and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby.
(j) There are no contracts, agreements or
understandings between the Company and any person granting
such person the right (other than rights which
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have been waived or satisfied) to require the Company to file
a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in
the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under
the Securities Act, except as described in the Prospectus; and
there are no options or warrants for the purchase of, other
outstanding rights to purchase, agreements or obligations to
issue or agreements or other rights to convert or exchange any
obligation or security into, capital stock of the Company or
securities convertible into or exchangeable for capital stock
of the Company, except as described in the Prospectus or the
Company's Proxy Statement for its 1997 Annual Meeting.
(k) Except as described in the Prospectus, the
Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under,
or Regulation D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant
to outstanding options, rights or warrants.
(l) Neither the Company nor any of its subsidiaries
has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital
stock (except for any increase in the capital stock resulting
from the Company's issuance of shares of Common Stock upon
exercise of options granted under the Company's 1995 Stock
Option Plan and the 1995 Outside Directors Stock Option Plan
in the ordinary course of business) or long-term debt of the
Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material
adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(m) The financial statements (including the related
notes and supporting schedules) filed as part of the
Registration Statement or included or incorporated by
reference in the Prospectus present fairly the financial
condition and results of operations of the entities purported
to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved; the financial information
included in the Prospectus under the caption
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"Prospectus Summary" and "Selected Consolidated Financial
Data" (including as adjusted financial information) presents
fairly the information shown therein and has been compiled on
a basis consistent with that of the financial statements of
the Company.
(n) Price Waterhouse LLP, who have certified certain
financial statements of the Company, whose report appears in
the Prospectus and who have delivered the initial letter
referred to in Section 9(g) hereof, are independent public
accountants as required by the Securities Act and the Rules
and Regulations.
(o) The Company and each of its subsidiaries have
good and marketable title in fee simple to all real property
owned by the Company or any of its subsidiaries 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 proposed to be made of such
property by the Company and its subsidiaries; all real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material
and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its
subsidiaries; the executive offices and assembly facilities of
the Company and each of its subsidiaries (the "Premises"), and
all operations conducted thereon, are now and, since the
Company and any subsidiary began to use such Premises, always
have been and, to the best of the Company's knowledge, prior
to when the Company and each of its subsidiaries began to use
such Premises, always had been, in compliance with all U.S.
and Mexican laws concerning or related to industrial hygiene
and the protection of health and the environment, including
all federal, state and local statutes, ordinances, regulations
and rules, except to the extent that any failure to be in such
compliance would not materially adversely affect the
consolidated financial position, results of operations,
shareholders' equity, business or prospects of the Company and
its subsidiaries.
(p) Except as described in the Prospectus, the
Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary
for companies engaged in similar businesses in similar
industries.
(q) Except as described in the Prospectus, the
Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights and
licenses necessary for the conduct of their respective
businesses and have no reason to believe that the conduct of
their
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respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such
rights of others.
(r) There are no legal or governmental claims,
actions or proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the
consolidated financial position, shareholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries; and to the best of the Company's knowledge, no
such claims, actions or proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(s) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied.
(t) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references
to contracts, agreements or other documents, are accurate in
all material respects and present or summarize fairly, in all
material respects, the information required to be disclosed
under the Securities Act or the Rules and Regulations, and
there are no statutes, regulations, contracts or other
documents which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by the
Securities Act or the Rules and Regulations which have not
been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations.
(u) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, shareholders, customers or suppliers of
the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(v) No labor dispute or disturbance by the employees
of the Company or any subsidiary of the Company exists or, to
the knowledge of the Company, is imminent which might be
expected to have a material adverse effect on the consolidated
financial position, shareholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries; and the Company has no knowledge of any existing
or threatened labor disturbance by the employees of any of the
principal suppliers, contractors or customers of the Company
or any of its subsidiaries that would materially adversely
affect the consolidated financial position, shareholders'
equity, results of operations, business or prospects of the
Company and its subsidiaries.
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(w) The Company is in compliance in all material
respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(x) The Company and each of its subsidiaries has
filed all federal, state, local and foreign income and
franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any
of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might
have) a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
(y) Since the date as of which information is given
in the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, the Company has not
(i) issued or granted any securities (except for options to
purchase shares of Common Stock under the Company's 1995 Stock
Option Plan and the 1995 Outside Directors Stock Option Plan
issued and granted in the ordinary course of business), (ii)
incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(z) The Company and each of its subsidiaries (i)
makes and keeps accurate books and records and (ii) maintains
internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable
intervals.
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(aa) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter or by-laws or similar
governing instruments, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is
a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(ab) Neither the Company nor any of its subsidiaries,
nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of
its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated
or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ac) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment
of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries
in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which would not have, or
could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a
material adverse effect on the general affairs, management,
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; there has been
no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or
into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any of
its subsidiaries or with respect to which the Company or any
of its subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely
to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes,
9
dumpings and releases, a material adverse effect on the
general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall
have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to
environmental protection.
(ad) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder.
(ae) There are no engagements or arrangements between
the Company and an investment bank or third party pursuant to
which such investment bank or third party has been granted any
rights to underwrite securities of the Company or would be
entitled to receive a fee in the event of a private placement
of securities, public offering of securities or merger or
acquisition involving the Company, except for any rights to
underwrite contemplated by this Agreement and any arrangements
for which fees are reflected in Item 14 of Part II of the
Registration Statement.
2. Representations, Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder severally (except with respect to
paragraphs (e) and (f) of this Section 2) represents, warrants and agrees
that:
(a) The Selling Shareholder has, and immediately
prior to the First Delivery Date (as defined in Section 5
hereof) the Selling Shareholder will have, good and valid
title to the shares of Stock to be sold by the Selling
Shareholder hereunder on such date, free and clear of all
liens, encumbrances, equities or claims; and upon delivery of
such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Shareholder has placed in custody
under a custody agreement (the "Custody Agreement" and,
together with all other similar agreements executed by the
other Selling Shareholders, the "Custody Agreements") with
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as custodian (the "Custodian"), for delivery
under this Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company
having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling
Shareholder hereunder.
(c) The Selling Shareholder has duly and irrevocably
executed and delivered a power of attorney (the "Power of
Attorney" and, together with all other similar agreements
executed by the other Selling Shareholders, the "Powers
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of Attorney") appointing the Custodian and one or more other
persons, as attorneys-in-fact, with full power of
substitution, and with full authority (exercisable by any one
or more of them) to execute and deliver this Agreement and to
take such other action as may be necessary or desirable to
carry out the provisions hereof on behalf of the Selling
Shareholder.
(d) The Selling Shareholder has the full right, power
and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, transfer and
deliver the Stock to be sold by such Selling Shareholder
hereunder, and this Agreement and Power of Attorney, and the
Custody Agreement have been duly authorized, executed and
delivered by such Selling Shareholder and constitute the
legal, valid and binding obligations of such Selling
Shareholder enforceable in accordance with their respective
terms; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by
the Selling Shareholder and the consummation by the Selling
Shareholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Selling Shareholder is a party or by which the Selling
Shareholder is bound or to which any of the property or assets
of the Selling Shareholder is subject, nor will such actions
result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Selling Shareholder or the property or
assets of the Selling Shareholder; and, except for the
registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Shareholder and the consummation by
the Selling Shareholder of the transactions contemplated
hereby and thereby.
(e) Each Denron Selling Shareholder severally
represents, warrants and agrees that, to the knowledge of
each Denron Selling Shareholder, the Registration Statement
and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will, when
they become effective or are filed with the Commission, as the
case may be, do not and will not, as of the applicable
effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto)
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;
provided that no representation or warranty
11
is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and
in conformity with written information furnished to the
Company by or on behalf of any Underwriter specifically for
inclusion therein.
(f) Each Management Selling Shareholder severally
represents, warrants and agrees that the Registration
Statement and the Prospectus and any further amendments or
supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement
thereto) 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;
provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of any Underwriter specifically for inclusion therein.
(g) The Selling Shareholder has no reason to believe
that the representations and warranties of the Company
contained in Section 1 hereof are not materially true and
correct; such Selling Shareholder has examined the
Registration Statement and the Prospectus (as amended or
supplemented) and has no knowledge of any material fact,
condition or information not disclosed in the Registration
Statement, as of the effective date, or the Prospectus (or any
amendment or supplement thereto), as of the applicable filing
date, which has adversely affected or may adversely affect the
business of the Company and is not prompted to sell shares of
Common Stock by any information concerning the Company which
is not set forth in the Registration Statement and the
Prospectus.
(h) The Selling Shareholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,000,000 shares of
the Firm Stock and each Selling Shareholder hereby agrees to sell the number of
shares of the Firm Stock set opposite his/her name in Schedule 2 hereto,
severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from the Company, and from each
Selling Shareholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by each Selling Shareholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares.
In addition, the Company grants to the Underwriters an option
to purchase up to 480,000 shares of Option Stock. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the
12
Option Stock shall be adjusted by the Underwriters so that no Underwriter shall
be obligated to purchase Option Stock other than in 100 share amounts. The price
of both the Firm Stock and any Option Stock shall be $_____ per share.
The Company and the Selling Shareholders shall not be
obligated to deliver any of the Stock to be delivered on the First Delivery Date
or the Second Delivery Date (as hereinafter defined), as the case may be, except
upon payment for all the Stock to be purchased on such Delivery Date as provided
herein.
4. Offering of Stock by the Underwriters. The several
Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the office of ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Underwriters and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Shareholders shall deliver or cause to be delivered certificates
representing the Firm Stock to the Underwriters for the account of each
Underwriter against payment to or upon the order of the Company and the Selling
Shareholders of the purchase price by certified or official bank check or checks
payable in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Underwriters shall request in writing not less than two full business days prior
to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company and the Selling
Shareholders shall make the certificates representing the Firm Stock available
for inspection by the Underwriters in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement the option granted in Section 3 may be exercised by written
notice being given to the Company by the Underwriters. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Underwriters, when the shares
of Option Stock are to be delivered; provided, however, that this date and time
shall not be earlier than the First Delivery Date nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the fifth business day after the date on which the option shall have
been exercised. (The date and time the shares of Option Stock are delivered are
sometimes referred to as the
13
"Second Delivery Date" and the First Delivery Date and the Second Delivery Date
are sometimes each referred to as a "Delivery Date".)
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Underwriters and the Company) at 10:00 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Stock to the
Underwriters for the account of each Underwriter against payment to or upon the
order of the Company of the purchase price by certified or official bank check
or checks payable in immediately available funds. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Underwriters shall request in the aforesaid written notice.
For the purpose of expediting the checking and packaging of the certificates for
the Option Stock, the Company shall make the certificates representing the
Option Stock available for inspection by the Underwriters in New York, New York,
not later than 2:00 P.M., New York City time, on the business day prior to the
Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Underwriters and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than Commission's
close of business on the second business day following the
execution and delivery of this Agreement or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus
prior to the last Delivery Date except as permitted herein; to
advise the Underwriters, promptly after it receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has
been filed and to furnish the Underwriters with copies
thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Stock;
to advise the Underwriters, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the
14
issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Underwriters
and to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith;
(c) To deliver promptly to the Underwriters such
number of the following documents as the Underwriters shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than
this Agreement), (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus and
(iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act, to notify the
Underwriters and, upon their request, to file such document
and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Underwriters, be required by the Securities
Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus,
any document incorporated by reference in the Prospectus or
any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Underwriters and
counsel for the Underwriters and obtain the consent of the
Underwriters to the filing;
15
(f) As soon as practicable after the Effective Date,
to make generally available to the Company's security holders
and to deliver to the Underwriters an earning statement of the
Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the
Company, Rule 158);
(g) For a period of five years following the
Effective Date, to furnish to the Underwriters copies of all
materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements
furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as
the Underwriters may reasonably request to qualify the Stock
for offering and sale under the securities laws of such
jurisdictions as the Underwriters may request and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock; provided
that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
(other than (i) the Stock, (ii) shares issued pursuant to
employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or
pursuant to currently outstanding options, warrants or rights
and (iii) shares of Common Stock issued in connection with any
acquisition of another company if the terms of such issuance
provide that such Common Stock shall not be resold prior to
the expiration of the period referenced in this paragraph), or
sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options
pursuant to option plans existing on the date hereof), or (2)
enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause
each officer and director of the Company to furnish to the
16
Underwriters, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree
not to, directly or indirectly, (A) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than
the Stock) or (B) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described
in clause (A) or (B) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in
each case for a period of 90 days from the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.;
(j) To apply the net proceeds from the sale of the
Stock being sold by the Company as set forth in the
Prospectus;
(k) Prior to the Effective Date, to apply for the
inclusion of the Stock on the National Market System and to
use its best efforts to complete that listing, subject only to
official notice of issuance, prior to the First Delivery Date;
and
(l) To take such steps as shall be necessary to
ensure that neither the Company nor any subsidiary shall
become an "investment company" within the meaning of such term
under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
7. Further Agreements of the Selling Shareholders. Each
Selling Shareholder agrees:
(a) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
(other than the Stock and shares of Common Stock gifted
provided that the recipient of such shares of Common Stock
enters into a lock-up letter containing the provisions of this
paragraph) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in
each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc.
17
(b) That the Stock to be sold by the Selling
Shareholder hereunder, which is represented by the
certificates held in custody for the Selling Shareholder, is
subject to the interest of the Underwriters and the other
Selling Shareholders thereunder, that the arrangements made by
the Selling Shareholder for such custody are to that extent
irrevocable, and that the obligations of the Selling
Shareholder hereunder shall not be terminated by any act of
the Selling Shareholder, by operation of law, by the death or
incapacity of any individual Selling Shareholder or, in the
case of a trust, by the death or incapacity of any executor or
trustee or the termination of such trust, or the occurrence of
any other event.
(c) To deliver to the Underwriters prior to the First
Delivery Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Shareholder is a
non-United States person) or Form W-9 (if the Selling
Shareholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the stock; (e) the costs of delivering and distributing the Custody
Agreements and the Powers of Attorney; (f) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (g) any applicable listing or other fees; (h)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (i) all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
under this Agreement; provided that, except as provided in this Section 8 and in
Section 13, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Shareholders contained herein, to the performance by the Company
and the Selling Shareholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
18
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 6(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date
that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, is material or omits to
state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Custody Agreements, the Powers of Attorney, the
Stock, the Registration Statement and the Prospectus, and all
other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Shareholders
shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to
pass upon such matters.
(d) Duane, Morris & Heckscher LLP shall have
furnished to the Underwriters its written opinion, as counsel
to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory
to the Underwriters, to the effect that:
(i) The Company and each of its subsidiaries
have been duly incorporated and are validly existing
as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are
duly licensed or qualified to do business and are in
good standing as foreign corporations in each
jurisdiction in which their respective ownership or
lease of property or the conduct of their respective
businesses requires such license or qualification,
except where the failure so to license or qualify
would not have a material adverse effect on the
consolidated financial position, shareholders'
equity, results of operations, business or prospects
of the Company and its subsidiaries and have all
power and authority necessary to own or hold their
respective properties and conduct the businesses in
which they are engaged;
19
(ii) The Company has an authorized
capitalization as set forth in the Prospectus, and
all of the issued shares of capital stock of the
Company (including the shares of Stock being
delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus, and none of such shares
have been issued in violation of any preemptive
rights; all of the issued shares of capital stock of
each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid,
non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances,
equities or claims; all issuances and repurchases of
securities by the Company were exempt from, or
complied in all material respects with, the
provisions of all applicable federal and state
securities and state corporate laws;
(iii) There are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such
counsel;
(iv) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a
party or of which any property or assets of the
Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any
of its subsidiaries, might have a material adverse
effect on the consolidated financial position,
shareholders' equity, results of operations, business
or prospects of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) The Registration Statement was declared
effective under the Securities Act as of the date and
time specified in such opinion, the Prospectus was
filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened
by the Commission;
(vi) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Company prior to such Delivery
Date (other than the financial statements and related
20
schedules therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Securities Act
and the Rules and Regulations; the documents
incorporated by reference in the Prospectus and any
further amendment or supplement to any such
incorporated document made by the Company prior to
such Delivery Date (other than the financial
statements and related schedules therein, as to which
such counsel need express no opinion), when they
became effective or were filed with the Commission,
as the case may be, complied as to form in all
material respects with the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder; and the Company has filed all forms,
reports and documents required to be filed with the
Commission under the Exchange Act;
(vii) To the best of such counsel's
knowledge, there are no contracts or other documents
which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules and Regulations
which have not been described or filed as exhibits to
the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(viii) The Company has full power and
authority to enter into this Agreement; and this
Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the shares of
Stock being delivered on such Delivery Date by the
Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation
of the transactions contemplated hereby will not
conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or
instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its
subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of
their properties or assets; and, except for the
registration of the Stock under the Securities Act
and such consents, approvals, authorizations,
registrations or qualifications as may be required
under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the
21
Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration
with, any such court or governmental agency or body
is required for the execution, delivery and
performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby;
and
(x) To the best of such counsel's
knowledge, except as described in the Prospectus,
there are no contracts, agreements or understandings
between the Company and any person granting such
person the right (other than rights which have been
waived or satisfied) to require the Company to file a
registration statement under the Securities Act with
respect to any securities of the Company owned or to
be owned by such person or to require the Company to
include such securities in the securities registered
pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of
the United States of America, the laws of the Commonwealth of
Pennsylvania, the laws of Delaware and jurisdictions in which
it is admitted; and (ii) rely (to the extent such counsel
deems proper and specifies in its opinion), as to matters
involving the application of the laws of the United Mexican
States and the laws of the State of California upon the
opinions of other counsel of good standing, provided that any
such other counsel is satisfactory to counsel for the
Underwriters and furnishes a copy of its opinion to the
Underwriters. Counsel for the Company shall also have
furnished to the Underwriters a written statement, addressed
to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters, to the effect that
(x) such counsel has acted as counsel to the Company on a
regular basis since October 1995 (although the Company is also
represented with respect to certain other matters, by other
outside counsel), has acted as counsel to the Company in
connection with previous financing transactions and has acted
as counsel to the Company in connection with the preparation
of the Registration Statement, and (y) based on the foregoing,
no facts have come to the attention of such counsel which lead
it to believe that (I) the Registration Statement, as of the
Effective Date, contained any 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 that the Prospectus contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading or (II) any document
incorporated by reference in the Prospectus or any further
amendment or supplement to any such incorporated document made
by the Company prior to such Delivery Date, when they became
effective or were
22
filed with the Commission, as the case may be, contained, in
the case of a registration statement which became effective
under the Securities Act, any 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, in the case of other documents which were
filed under the Exchange Act with the Commission, an 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. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus except for the statements made in
the Prospectus under the captions "Description of Capital
Stock," "Risk Factors - Shares Eligible for Future Sale,"
"Risk Factors - AntiTakeover Protections," and "Shares
Eligible for Future Sale", insofar as such statements relate
to the Stock and concern legal matters. The opinion of counsel
for the Company shall include a statement to the effect that
it may be relied upon by counsel for the Underwriters in their
opinion delivered to the Underwriters.
(e) The respective counsel for the Management Selling
Shareholders and the Denron Selling Shareholders shall each
have furnished to the Underwriters its written opinion, as
counsel to each of the Selling Shareholders for whom it is
acting as counsel, addressed to the Underwriters and dated the
First Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, to the effect that:
(i) Each Selling Shareholder has full right,
power and authority to enter into this Agreement, the
Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody
Agreement by each Selling Shareholder and the
consummation by each Selling Shareholder of the
transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any Selling
Shareholder is a party or by which any Selling
Shareholder is bound or to which any of the property
or assets of any Selling Shareholder is subject, nor
will such actions result in any violation of any
statute or any order, rule or regulation known to
such counsel of any court or governmental agency or
body having jurisdiction over any Selling Shareholder
or the property or assets of any Selling Shareholder;
and, except for the registration of the Stock under
the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable
state securities
23
laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or
registration with, any such court or governmental
agency or body is required for the execution,
delivery and performance of this Agreement, the Power
of Attorney or the Custody Agreement by any Selling
Shareholder and the consummation by any Selling
Shareholder of the transactions contemplated hereby
and thereby;
(ii) This Agreement has been duly executed
and delivered by or on behalf of each Selling
Shareholder;
(iii) A Power-of-Attorney and a Custody
Agreement have been duly executed and delivered by
each Selling Shareholder and constitute valid and
binding agreements of each Selling Shareholder,
enforceable in accordance with their respective
terms;
(iv) Immediately prior to the First
Delivery Date, each Selling Shareholder had good and
valid title to the shares of Stock to be sold by such
Selling Shareholder under this Agreement, free and
clear of all liens, encumbrances, equities or claims,
and full right, power and authority to sell, assign,
transfer and deliver such shares to be sold by such
Selling Shareholder hereunder; and
(v) Good and valid title to the shares of
Stock to be sold by each Selling Shareholder under
this Agreement, free and clear of all liens,
encumbrances, equities or claims, has been
transferred to each of the several Underwriters; and
there are no transfer or similar taxes payable in
connection with the sale and delivery of the shares
of Stock by each Selling Stockholder to the
Underwriters, except as specified in such opinion.
Counsel for the Management Selling Shareholders, in rendering
such opinion may (i) state that its opinion is limited to
matters governed by the Federal laws of the United States of
America, the laws of the Commonwealth of Pennsylvania, the
General Corporation Law of the State of Delaware and
jurisdictions in which it is admitted; and (ii) in rendering
the opinion in Section 9(e)(iv) above, rely upon a certificate
of each Selling Shareholder in respect of matters of fact as
to ownership of and liens, encumbrances, equities or claims on
the shares of Stock sold by such Selling Shareholder, provided
that such counsel shall furnish copies thereof to the
Underwriters and state that it believes that both the
Underwriters and it are justified in relying upon such
certificate. Such counsel shall also have furnished to the
Underwriters a written statement, addressed to the
Underwriters and dated the First Delivery Date, in form and
substance satisfactory to the Underwriters, to the effect that
(x) such counsel has acted as counsel to each Selling
24
Shareholder and has acted as counsel to each Selling
Shareholder in connection with the preparation of the
Registration Statement, and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead it
to believe that the Registration Statement, as of the
Effective Date, contained any untrue statement of a material
fact relating to any Selling Shareholder or omitted to state
such a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue
statement of a material fact relating to any Selling
Shareholder or omits to state such a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that such counsel
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. The opinion of
counsel for the Denron Selling Shareholders shall include a
statement to the effect that it may be relied upon by counsel
for the Underwriters in their opinion delivered to the
Underwriters.
Counsel for the Denron Selling Shareholders, in rendering such
opinion, may (i) state that its opinion is limited to matters
governed by the Federal laws of the United States of America,
the laws of the State of California, the General Corporation
Law of the State of Delaware and jurisdictions in which it is
admitted; and (ii) in rendering the opinion in Section
9(e)(iv) above, rely upon a certificate of each Selling
Shareholder in respect of matters of fact as to ownership of
and liens, encumbrances, equities or claims on the shares of
Stock sold by such Selling Shareholder, provided that such
counsel shall furnish copies thereof to the Underwriters and
state that it believes that both the Underwriters and it are
justified in relying upon such certificate. In addition, such
counsel shall state in its opinion that such opinion assumes
that the laws of Pennsylvania are identical to the laws of
California and such counsel shall also state that it is not
opining as to the laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a
written statement, addressed to the Underwriters and dated the
First Delivery Date, in form and substance satisfactory to the
Underwriters, to the effect that (x) such counsel has acted as
counsel to each Selling Shareholder and has acted as counsel
to each Selling Shareholder in connection with the preparation
of the Registration Statement, and (y) based on the foregoing,
no facts have come to the attention of such counsel which lead
it to believe that the Registration Statement, as of the
Effective Date, contained any untrue statement of a material
fact relating to any Selling Shareholder or omitted to state
such a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue
statement of a material fact relating to any Selling
Shareholder or omits to state such a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that
25
such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus. The opinion
of counsel for the Denron Selling Shareholders shall include a
statement to the effect that it may be relied upon by counsel
for the Underwriters in their opinion delivered to the
Underwriters.
(f) The Underwriters shall have received from ▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such
opinion or opinions, dated such Delivery Date, with respect to
the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall
have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass
upon such matters.
(g) At the time of execution of this Agreement, the
Underwriters shall have received from Price Waterhouse LLP, a
letter, in form and substance satisfactory to the Underwriters
and in accordance with the Statement on Auditing Standards No.
72, addressed to the Underwriters and dated the date hereof
(i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five
days prior to the date hereof), the findings of such firm with
respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of Price Waterhouse
LLP referred to in the preceding paragraph and delivered to
the Underwriters concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have
furnished to the Underwriters a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the findings
of such firm with respect to the financial information and
other matters covered by the initial letter and (iii)
confirming in all material respects the findings set forth in
the initial letter.
26
(i) The Company shall have furnished to the
Underwriters a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and
its Chief Financial Officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and
correct as of such Delivery Date; the Company has
complied with all its agreements contained herein;
and the conditions set forth in Sections 9(a) and
9(k) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include
any untrue statement of a material fact and did not
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading, and (B) since the Effective Date no
event has occurred which should have been set forth
in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) Each Selling Shareholder (or the Custodian or one
or more attorneys-in-fact on behalf of the Selling
Shareholders) shall have furnished to the Underwriters on the
First Delivery Date a certificate, dated the First Delivery
Date, signed by, or on behalf of, the Selling Shareholder (or
the Custodian or one or more attorneys-in-fact) stating that
the representations, warranties and agreements of the Selling
Shareholder contained herein are true and correct as of the
First Delivery Date and that the Selling Shareholder has
complied with all agreements contained herein to be performed
by the Selling Shareholder at or prior to the First Delivery
Date.
(k) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Underwriters, so material
and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock
being
27
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States shall
be such) as to make it, in the judgment of a majority in
interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of
the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(m) The National Market System shall have approved
the Stock for inclusion, subject only to official notice of
issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (B) in any blue sky application or other document prepared or
executed by the Company (or based upon any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the Stock
under the securities laws of any state or other jurisdiction (any such
28
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company shall not
be liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in conformity
with written information concerning such Underwriter furnished to the Company by
or on behalf of any Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) The Selling Shareholders, jointly and severally, shall
indemnify, and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto (except that with respect to the Denron Selling
Shareholders, only such statements (i) relating to the Selling Shareholders and
(ii) in the case of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Denron, Inc.) or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, Registration Statement
or the Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading (except that with respect to the Denron Selling Shareholders, only
such omissions (i) relating to the Selling Shareholders and (ii) in the case of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Denron, Inc.), and shall reimburse each Underwriter, its
officers and employees and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter, its officers and employees or
controlling
29
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Selling Shareholders shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any such amendment or
supplement in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Selling Shareholders may
otherwise have to any Underwriter or any officer, employee or controlling person
of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), and each
person, if any, who controls the Company within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any such director, officer,
employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this
30
Section 10. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that the Underwriters shall have the right to employ counsel to
represent jointly the Underwriters and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against the Company
or any Selling Shareholder under this Section 10 if, in the reasonable judgment
of the Underwriters, it is advisable for the Underwriters, officers, employees
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company or the Selling Shareholders. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one hand
and the Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this
31
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Shareholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 10(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the legend concerning
market stabilization activities on the inside front cover page of, and the
concession and reallowance figures and the information contained in paragraphs
seven through nine appearing under the caption "Underwriting" in, the Prospectus
are correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
11. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the
32
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Underwriters who
so agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Underwriters do not elect to purchase the shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Shareholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have to the Company and the Selling Shareholders for
damages caused by its default. If other underwriters are obligated or agree to
purchase the Stock of a defaulting or withdrawing Underwriter, either the
Underwriters or the Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Company or counsel for the Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Underwriters by notice given to and received by the
Company and the Selling Shareholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Section 9(k)
or 9(l), shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If the Company or
any Selling Shareholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Shareholders is
not fulfilled, the Company and the Selling Shareholders will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and
33
upon demand the Company and the Selling Shareholders shall pay the full amount
thereof to the Underwriters. If this Agreement is terminated pursuant to Section
11 by reason of the default of one or more Underwriters, neither the Company nor
any Selling Shareholder shall be obligated to reimburse any defaulting
Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc.,
Three World Financial Center, New York, New York 10285,
Attention: Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy,
in the case of any notice pursuant to Section 10(d), to the
Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇,
with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Fax:________);
(c) if to any Selling Shareholders, shall be delivered or
sent by mail, telex or facsimile transmission to such Selling
Shareholder at the address set forth on Schedule 2 hereto.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company and the Selling Shareholders shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. and the Company and
the Underwriters shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Selling Shareholders by the
Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Shareholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Shareholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or
34
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Shareholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
35
If the foregoing correctly sets forth the agreement among the
Company, the Selling Shareholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
THE JPM COMPANY
By
----------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule 2 to this Agreement
By
----------------------------------
Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
ADVEST, INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By ▇▇▇▇▇▇ BROTHERS INC.
By
----------------------------------
Name:
Title: Managing Director
36
SCHEDULE 1
Number of Number of
Underwriters Shares
------------ ---------
▇▇▇▇▇▇ Brothers Inc. . . . . . . . . . . . . . . .
Advest, Inc. . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. . . . . . . . . . . .
---------
---------
Total . . . . . . . . . . . . . . . . . . . . 3,200,000
---------
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SCHEDULE 2
Number of Shares
Name and address of Selling Shareholder of Firm Stock
--------------------------------------- ----------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o The JPM Company
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o The JPM Company
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o The JPM Company
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Viva ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇.#▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total.............................................. 1,200,000
=========
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