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EXHIBIT 1.1
3,280,000 Shares
APAC TELESERVICES, INC.
(an Illinois corporation)
Common Shares
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
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______________, 1996
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
as Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
APAC TeleServices, Inc., an Illinois corporation (the "Company"), and
each of the shareholders of the Company named in Schedule B hereto (the
"Selling Shareholders"), confirm their respective agreements with you and each
of the other underwriters named in Schedule A hereto (collectively, the "U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10), for whom you are acting as representatives
(in such capacity, the "Representatives"), with respect to the sale by the
Selling Shareholders, acting severally and not jointly, and the purchase by the
U.S. Underwriters, acting severally and not jointly, of the respective number
of Common Shares, par value $.01 per share, of the Company (the "Common
Shares") set forth in said Schedules
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A and B hereto and with respect to the grant by certain of the Selling
Shareholders to the U.S. Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 492,000
additional Common Shares to cover over-allotments, if any, in each case except
as may otherwise be provided in the U.S. Pricing Agreement, as hereinafter
defined. The 3,280,000 Common Shares (the "Initial U.S. Securities") to be
purchased by the U.S. Underwriters and all or any part of the 492,000 Common
Shares subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are collectively hereinafter called the "U.S. Securities".
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Selling
Shareholders of 820,000 Common Shares (the "Initial International Securities")
through arrangements with certain underwriters outside the United States (the
"Managers") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇ Brothers
International (Europe), ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
are acting as lead managers (the "Lead Managers") and the grant by certain of
the Selling Shareholders to the Managers, acting severally and not jointly, of
an option to purchase all or any part of the Managers' pro rata portion of up
to 123,000 additional Common Shares solely to cover over-allotments, if any
(the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Selling Shareholders are not obligated
to sell, and the U.S. Underwriters are not obligated to purchase, any Initial
U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the Managers.
The U.S. Underwriters and the Managers are hereinafter collectively
called the "Underwriters", the Initial U.S. Securities and the Initial
International Securities are hereinafter collectively called the "Initial
Securities" and the U.S. Securities and the International Securities are
hereinafter collectively called the "Securities".
Prior to the purchase and public offering of the U.S. Securities by
the several U.S. Underwriters, the Company, the Selling Shareholders and the
Representatives, acting on behalf of the several U.S. Underwriters, shall enter
into an agreement substantially in the form of Exhibit A hereto (the "U.S.
Pricing Agreement"). The U.S. Pricing Agreement may take the form of an
exchange of any standard form of written telecommunication among the Company,
the Selling Shareholders and the Representatives and
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shall specify such applicable information as is indicated in Exhibit A hereto.
The offering of the U.S. Securities will be governed by this Agreement, as
supplemented by the U.S. Pricing Agreement. From and after the date of the
execution and delivery of the U.S. Pricing Agreement, this Agreement shall be
deemed to incorporate the U.S. Pricing Agreement. The initial public offering
price and the purchase price with respect to the International Securities shall
be set forth in a separate instrument (the "International Pricing Agreement"),
the form of which is attached to the International Purchase Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-14097) and related
preliminary prospectuses for the registration of the Securities under the
Securities Act of 1933 (the "1933 Act"), has filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required pursuant to this Agreement, the 1933
Act or otherwise. Such registration statement (as amended, if applicable) and
the two prospectuses constituting a part thereof (including in each case all
documents incorporated or deemed to be incorporated therein by reference and
the information, if any, deemed to be part thereof pursuant to Rule 430A(b) or
Rule 434 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations")), as from time to time amended or supplemented pursuant
to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or otherwise, are hereinafter referred to as the "Registration
Statement", the "U.S. Prospectus" and the "International Prospectus",
respectively, and the U.S. and International Prospectuses are hereinafter
together called "Prospectuses" and, each individually, a Prospectus except that
if any revised prospectuses shall be provided to the U.S. Underwriters or the
Managers by the Company for use in connection with the offering of the
Securities which differs from the Prospectuses on file at the Commission at the
time the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of
the 1933 Act Regulations), the terms "U.S. Prospectus" and "International
Prospectus" shall refer to each such revised prospectus from and after the time
it is first provided to the U.S. Underwriters or the Managers, as the case may
be, for such use. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectuses shall be deemed to include,
without limitation, the form of prospectuses and the term sheets, taken
together, provided to the U.S. Underwriters and the Managers by the Company in
reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectuses"). If the
Company files a registration statement to register a portion of the Securities
and relies on Rule 462(b)
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for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to include both the
registration statement referred to above (No. 333-14097) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the 1933 Act, the 1934 Act, or otherwise. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectuses, the Prospectuses or any term sheets or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included", "described" or "stated"
in the Registration Statement, any preliminary prospectus or the Prospectuses
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectuses, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectuses shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
The Company and the Selling Shareholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon
as the Representatives deem advisable after the Registration Statement becomes
effective and the U.S. Pricing Agreement has been executed and delivered. The
price per share for the International Securities to be purchased by the
Managers pursuant to the International Purchase Agreement shall be identical to
the price per share for the U.S. Securities to be purchased by the U.S.
Underwriters hereunder.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each of the U.S.
Underwriters as of the date hereof and as of the date of the U.S. Pricing
Agreement (such latter date being hereinafter referred to as the "U.S.
Representation Date") as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act. At the respective times the Registration
Statement and any post-effective amendments thereto become effective
and at the U.S. Representation Date, the Registration Statement will
comply in all material
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respects with the requirements of the 1933 Act and the 1933 Act
Regulations 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. The
Prospectuses, at the U.S. Representation Date (unless the term
"Prospectuses" refers to prospectuses which have been provided to the
U.S. Underwriters and the Managers by the Company for use in
connection with the offering of the Securities which differ from the
Prospectuses on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time such
prospectuses are first provided to the U.S. Underwriters and the
Managers for such use) and at Closing Time referred to in Section 2
hereof, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectuses made in
reliance upon and in conformity with information furnished to the
Company in writing by any U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇") expressly for use in the Registration Statement or the
Prospectuses.
(ii) The documents incorporated or deemed to be
incorporated by reference in the Prospectuses, at the time they were
or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in
the Prospectuses, at the time the Registration Statement and any
post-effective amendments thereto become effective and at the Closing
Time 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, in light of the circumstances under which
they were made, not misleading.
(iii) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) The historical financial statements included or
incorporated by reference in the Registration Statement and the
Prospectuses, together with the related schedules and
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notes, present fairly the financial position of the Company at the
dates indicated and the statement of operations, stockholders' equity
and cash flows of the Company for the periods specified; except as
otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The
historical Income Statement Data and Balance Sheet Data contained in
the Registration Statement under the captions "Summary Financial and
Operating Data" and "Selected Financial and Operating Data" and the
historical Income Statement Data under the caption "Recent
Developments" in the Registration Statement have been compiled on a
basis consistent with that of the audited financial statements
included in the Registration Statement.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectuses, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Illinois and has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectuses and to enter into and perform its obligations under
this Agreement, the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in the State of Iowa; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not have a material adverse effect on the
condition, financial
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or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
(vii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise; all of
the issued and outstanding capital stock of each such subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of the subsidiaries was issued in violation of
the preemptive or similar rights of any stockholder of such
corporation arising by operation of law, under the charter or by-laws
of any subsidiary or under any agreement to which the Company or any
subsidiary is a party. Except for the shares of capital stock of each
of the subsidiaries owned by the Company and such subsidiaries,
neither the Company nor any such subsidiary owns any shares of stock
or any other equity securities of any corporation or has any equity
interest in any firm, partnership, association or other entity, except
as described in or by the Prospectuses. The only subsidiaries of the
Company are APAC TeleServices of Michigan, Inc., a Michigan
corporation, APAC TeleServices of Illinois, Inc., an Illinois
corporation, and APAC Insurance Services Agency, Inc., an Illinois
corporation. Such subsidiaries, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) Each of the contracts and agreements between the
Company and the clients of the Company listed on Schedule C hereto
(each, a "Contract" and collectively, the "Contracts") and the
Employment Agreement, dated May 26, 1995, as amended on October 3,
1995, between the Company and ▇▇▇▇ ▇. ▇▇▇▇▇ (the "Simon Agreement")
has been duly authorized, executed and delivered by the Company and,
to the knowledge of the Company (with respect to each
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Contract), by the other parties thereto, is enforceable in accordance
with its terms and is in full force and effect, without termination or
cancellation provisions having been exercised by any of the parties
thereto; to the knowledge of the Company, no exercise of termination
or cancellation provisions of any of the Contracts or the Simon
Agreement is contemplated or has been threatened by any of the parties
thereto; and the consummation of the transactions contemplated in each
of the Contracts and the Simon Agreement has been duly authorized by
all necessary corporate action. The Company has not received any
notice or is otherwise aware of any material infringement of or
material dispute arising out of the rights or obligations of the
Company or the other parties to such Contracts or the Simon Agreement
under the terms of any of the Contracts or the Simon Agreement.
(ix) The authorized, issued and outstanding capital stock of
the Company is set forth in the Prospectuses under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
employee benefit plans referred to in the Prospectuses, pursuant to
the exercise of options referred to in the Prospectuses or pursuant to
the employee stock purchase plan referred to in the Prospectuses); the
issued and outstanding Common Shares, including the Securities to be
purchased by the Underwriters from the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding Common Shares, including the
Securities to be purchased by the Underwriters from the Selling
Shareholders, was issued in violation of the preemptive or other
similar rights of any securityholder of the Company arising by
operation of law, under the charter or by-laws of the Company or under
any agreement to which the Company or any of its subsidiaries is a
party; the Common Shares conform in all material respects to all
statements relating thereto contained in the Prospectuses; and the
Securities are not subject to preemptive or other similar rights of
any securityholder of the Company arising by operation of law, under
the charter and by-laws of the Company or under any agreement to which
the Company or any of its subsidiaries is a party.
(x) Neither the Company nor any of its subsidiaries is in
violation of its charter or in material default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of
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the material property or assets of the Company or any of its
subsidiaries is subject, including any of the Contracts; and the
execution, delivery and performance of this Agreement, the U.S.
Pricing Agreement, the International Purchase Agreement and the
International Pricing Agreement and the consummation of the
transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or the passage of time or
both, conflict with or constitute a material breach of, or material
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or any of its subsidiaries
pursuant to, any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the material property
or assets of the Company or any of its subsidiaries is subject,
including any of the Contracts, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company,
any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their assets or properties or the terms and
conditions of any material Governmental License (as defined below).
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.
(xi) Other than disputes incidental to the Company's business
that could not reasonably be expected to result in a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, no labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent; and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors or any party to
a Contract which in either case might be expected to result in any
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business
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prospects of the Company and its subsidiaries considered as one
enterprise.
(xii) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which the Company,
acting reasonably, believes is likely to result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, or which the Company,
acting reasonably, believes is likely to materially and adversely
affect the properties or assets of the Company or any of its
subsidiaries or the consummation of this Agreement or the
International Purchase Agreement or the performance by the Company of
its obligations hereunder or thereunder or under any of the Contracts;
the aggregate of all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which
any of their respective property or assets is the subject which are
not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a material adverse change in the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xiii) There are no contracts or documents which are required
to be described in the Registration Statement, the Prospectuses or the
documents incorporated by reference therein or to be filed as exhibits
thereto by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations which have not been so described and filed as
required.
(xiv) The Company and its subsidiaries own or possess, or
reasonably believe they can acquire on reasonable terms, the patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names (collectively, "patent and proprietary rights")
presently employed by them in connection with the business now
operated by them, and, other than as explicitly disclosed in writing
to the Representatives, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict
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with asserted rights of others with respect to any such patent or
proprietary rights, or of any facts which would render any such patent
and proprietary rights invalid or inadequate to protect the interest
of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder or under the
International Purchase Agreement, or in connection with the offering,
issuance or sale of the Securities hereunder or under the
International Purchase Agreement or the consummation of the
transactions contemplated by this Agreement, the International
Purchase Agreement, the U.S. Pricing Agreement and the International
Pricing Agreement, except such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xvi) The Company, its subsidiaries and their respective
telephone representatives who sell insurance-related products possess
such certificates, authorities, permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate state, federal, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated or
conducted by them except where the failure to possess such
Governmental Licenses would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; the Company, its
subsidiaries and their respective telephone representatives who sell
insurance-related products are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; all of the Governmental
Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such
Government Licenses to be in full force and effect would not have a
material adverse
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effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and neither the Company nor
any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xvii) This Agreement and the International Purchase
Agreement have been, and, at the U.S. Representation Date, the U.S.
Pricing Agreement and the International Pricing Agreement will each
have been, duly authorized, executed and delivered by the Company.
(xviii) Except as set forth in the Prospectuses, the Company
and its subsidiaries are in compliance in all material respects with
all applicable laws, statutes, ordinances, rules or regulations, the
enforcement of which, individually or in the aggregate, would be
reasonably expected to have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise.
(xix) The Company and its subsidiaries have good and
marketable title to all material properties (real and personal) owned
by the Company and its subsidiaries, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of
its subsidiaries; and all properties held under lease by the Company
or its subsidiaries are held under valid, subsisting and enforceable
leases.
(xx) Except as disclosed in the Prospectuses, there are no
persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxi) Except as disclosed in the Prospectuses, there are no
outstanding options, warrants, or other rights calling for the
issuance of, and no commitments, plans or
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arrangements to issue, any shares of capital stock of the Company or
any of its subsidiaries or any security convertible into or
exchangeable for capital stock of the Company or any of its
subsidiaries.
(xxii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxiii) The Company is not, and upon the sale of the
Securities as contemplated herein and in the International Purchase
Agreement will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxiv) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or has duly requested extension thereof and has paid all taxes
required to be paid by them and any related assessments, fines or
penalties except for any such tax, assessment, fine or penalty that is
being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iv) above in respect
of all federal, state, local and foreign taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has
not been finally determined or remains open to examination by
applicable taxing authorities.
(xxv) The Company and its subsidiaries carry or are entitled
to the benefits of insurance in such amounts and covering such risks
as they reasonably believe is adequate to protect them against the
occurrence of such events, (i) against the risk of which insurance is
available and (ii) the occurrence of which would reasonably be likely
to materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, and all
such insurance is in full force and effect.
(xxvi) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general and specific authorizations; (ii) transactions
are recorded as necessary
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to permit preparations of financial statements in conformity with GAAP
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxvii) The Company and its subsidiaries have not (i) taken
directly or indirectly, any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the Securities or
(ii) since the initial filing of the Registration Statement (A) bid
for, purchased or paid anyone any compensation for soliciting
purchases of, the Securities, or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(xxviii) The Company has not distributed and, prior to the
later to occur of (i) the Closing Time and (ii) completion of the
distribution of the Securities, will not distribute any prospectus (as
such term is defined in the 1933 Act and the 1933 Act Regulations) in
connection with the offering and sale of the Securities other than the
Registration Statement, any preliminary prospectus filed with the
Commission, the Prospectuses or other materials, if any, permitted by
the 1933 Act or by the 1933 Act Regulations and approved by the
Representatives and Lead Managers.
(xxix) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier of
any of them, on the other hand, which is required by the 1933 Act or
the 1934 Act or by the 1933 Act Regulations or the 1934 Act
Regulations to be described in the Registration Statement or the
Prospectuses which is not so described or is not described as
required.
(b) Each Selling Shareholder severally and not jointly represents
and warrants to, and agrees with, each of the U.S. Underwriters as follows:
(i) All authorizations, approvals and consents (other than
the issuance of the order of the Commission declaring the Registration
Statement effective and such authorizations, approvals or consents as
may be necessary under state securities laws) necessary for the
execution and
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delivery by such Selling Shareholder of this Agreement, the U.S.
Pricing Agreement, the International Purchase Agreement and the
International Pricing Agreement and the sale and delivery of the
Securities to be sold by such Selling Shareholder hereunder and under
the International Purchase Agreement have been obtained and are in
full force and effect; such Selling Shareholder has the full right,
power and authority to enter into this Agreement, the U.S. Pricing
Agreement, the International Purchase Agreement and the International
Pricing Agreement and to sell, transfer and deliver the Securities to
be sold by such Selling Shareholder hereunder and under the
International Purchaser Agreement; and the trustees of each Selling
Shareholder which is a trust and their successor or successors (the
"Trustees") are duly and validly authorized to take each such action
without the approval of any other person or court and the execution
hereof and of the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement by the Trustees
shall be an act which validly binds each Selling Shareholder which is
a trust to the terms of this Agreement, the U.S. Pricing Agreement,
the International Purchase Agreement and the International Pricing
Agreement, respectively.
(ii) The execution, delivery and performance of this
Agreement the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement and the sale and
delivery of the Securities to be sold by such Selling Shareholder and
the consummation of the transactions contemplated herein and therein
and compliance by such Selling Shareholder with its obligations
hereunder and thereunder have been duly authorized by such Selling
Shareholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a material breach of, or material default under, or result
in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities to be sold by such Selling Shareholder or any
material property or assets of such Selling Shareholder pursuant to,
any treaty, law, regulation or decree or material contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder may be
bound, or to which any of the material property or assets of such
Selling Shareholder is subject, nor will such action result in any
violation of the trust agreement or other organizational or governing
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, foreign
or domestic; and in the case of each Selling
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Shareholder that is a trust, the trust agreement or other
organizational or governing instrument applicable thereto previously
provided to the Representatives and the Lead Managers is a valid,
binding and enforceable agreement under the laws of the State of
Illinois and such agreement or other instrument has not been modified
or revoked and is in full force and effect and the powers granted
thereby and thereunder to the Trustees to take the actions referred to
in (b)(i) above were validly granted and have not been modified or
revoked and are in full force and effect; and no legal action is
pending or threatened that challenges the validity of such trust
agreement or other organizational or governing instrument or such
powers granted to the Trustees.
(iii) Except as described in the Prospectuses, such Selling
Shareholder has (or in the case of ▇▇▇▇ ▇. ▇▇▇▇▇, such Selling
Shareholder has the right to acquire pursuant to the Simon Agreement)
and will at Closing Time referred to in Section 2(c) hereof and, if
any U.S. Option Securities are purchased, on each Date of Delivery
referred to in Section 2(b) hereof, have good and marketable title to
the Securities to be sold by such Selling Shareholder hereunder and
under the International Purchase Agreement, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity other than pursuant to this Agreement or the International
Purchase Agreement; and upon delivery of the U.S. Securities and
payment of the purchase price therefor as herein contemplated, each of
the U.S. Underwriters will receive good and marketable title to the
U.S. Securities purchased by it from such Selling Shareholder, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(iv) Such 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 constitute
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale of the Securities; and such Selling
Shareholder has not distributed and will not distribute any prospectus
(as such term is defined in the 1933 Act and the 1933 Act Regulations)
in connection with the offering and sale of the Securities other than
any preliminary prospectus filed with the Commission or the
Prospectuses or other material permitted by the 1933 Act or the 1933
Act Regulations.
(v) No filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any governmental
authority or body is necessary or required for the performance by such
Selling Shareholder of
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its obligations hereunder or under the International Purchase
Agreement or in connection with the sale of the Securities hereunder
or under the International Purchase Agreement or the consummation of
the transactions contemplated by this Agreement, the U.S. Pricing
Agreement, the International Purchase and the International Pricing
Agreement, except such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vi) Such Selling Shareholder (or, if the Selling Shareholder
is a trust, the Trustees thereof) has reviewed and is familiar with
the Registration Statement; to the best knowledge of such Selling
Shareholder such Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; such Selling Shareholder (or, if the Selling Shareholder
is a trust, the Trustees thereof) is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder or under
the International Purchase Agreement by any information concerning the
Company or any subsidiary of the Company which is not set forth in the
Prospectuses.
(vii) Such parts of the Registration Statement as
specifically refer to such Selling Shareholder do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(viii) During a period of 180 days from the date of the U.S.
Pricing Agreement, such Selling Shareholder will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose
of, any shares of capital stock of the Company or any security
convertible or exchangeable into or exercisable for such capital stock
owned by such Selling Shareholder or with respect to which such
Selling Shareholder has the power of disposition, other than to (A)
the U.S. Underwriters or the Managers pursuant to this Agreement or
the International Purchase Agreement, (B) members of such Selling
Shareholder's immediate family, (C) a trust or trusts the
beneficiaries of which are exclusively such Selling Shareholder, a
member or members of the ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ family or other
entities controlled by such Selling Shareholder or members of the
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ family, or (D) family limited partnerships which
are controlled by such Selling Shareholder or members of the ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ family, provided that each transferee pursuant to
subclauses (B), (C) and (D) above agrees in
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writing to be bound by the restrictions described above in b(viii).
(ix) Neither such Selling Shareholder nor any of its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or has
any other association with (within the meaning of Article 1, paragraph
(q) of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")), any member firm of the NASD.
(x) Such Selling Shareholder agrees to deliver to the
Representatives and the Lead Managers at or prior to the Closing Time
a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(c) Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the U.S. Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by the Company to each U.S. Underwriter as to the matters covered
thereby; and any certificate signed by any Selling Shareholder as such and
delivered to the Representatives or to counsel for the U.S. Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by such Selling Shareholder to each U.S. Underwriter as to matters
covered thereby.
(d) The liability of the Selling Shareholders for breach of the
representation and warranty set forth in clause (b)(vi) above is limited as set
forth in Section 6(a).
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each
Selling Shareholder, severally and not jointly, agrees to sell to each U.S.
Underwriter, severally and not jointly, and each U.S. Underwriter, severally
and not jointly, agrees to purchase from each Selling Shareholder, at the price
per share set forth in the U.S. Pricing Agreement, that proportion of the
number of Initial U.S. Securities set forth in Schedule B opposite the name of
such Selling Shareholder which the number of Initial U.S. Securities set forth
in Schedule A opposite the name of such U.S. Underwriter (plus any additional
number of Initial U.S. Securities that such U.S. Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof) bears to
the total number of Initial U.S. Securities (except as otherwise provided in
the U.S. Pricing Agreement), subject to such adjustments as the U.S.
Underwriters
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in their discretion shall make to eliminate any sales or purchases of
fractional securities.
(1) If the Company has elected not to rely upon Rule 430A
under the 1933 Act Regulations, the initial public offering price and
the purchase price per share to be paid by the several U.S.
Underwriters for the U.S. Securities have each been determined and set
forth in the U.S. Pricing Agreement, dated the date hereof, and an
amendment to the Registration Statement and the Prospectuses will be
filed before the Registration Statement becomes effective.
(2) If the Company has elected to rely upon Rule 430A under
the 1933 Act Regulations, the initial public offering price and the
purchase price per share to be paid by the several U.S. Underwriters
for the U.S. Securities shall be determined by agreement among the
Representatives, the Company and the Selling Shareholders and, when so
determined, shall be set forth in the U.S. Pricing Agreement. In the
event that such prices have not been agreed upon and the U.S. Pricing
Agreement has not been executed and delivered by all parties thereto
by the close of business on the fourteenth business day following the
date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise
agreed to by the Company, Selling Shareholders and the
Representatives, except that Sections 1, 6, 7 and 8 shall remain in
effect.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
certain of the Selling Shareholders as set forth on Schedule B hereto, acting
severally and not jointly, hereby grant an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 492,000 Common
Shares at the price per share set forth in the U.S. Pricing Agreement. The
option hereby granted will expire 30 days after (i) the date the Registration
Statement becomes effective, if the Company has elected not to rely on Rule
430A under the 1933 Act Regulations, or (ii) the U.S. Representation Date, if
the Company has elected to rely upon Rule 430A under the 1933 Act Regulations,
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the
Representatives to such Selling Shareholders setting forth the number of U.S.
Option Securities as to which the several U.S. Underwriters are then exercising
the option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery for the U.S. Option Securities
(a "Date of Delivery") shall be determined by the Representatives,
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but shall not be, unless otherwise agreed upon by the Representatives and the
Selling Shareholders granting such option, later than seven full business days
after the exercise of said option, and in no event prior to Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of
the U.S. Option Securities, the U.S. Option Securities shall be sold by the
Selling Shareholders granting such option substantially in proportion to the
respective number of U.S. Option Securities set forth opposite their names in
Schedule B hereto and each of the U.S. Underwriters, acting severally and not
jointly, will purchase from each such Selling Shareholder that proportion of
the total number of U.S. Option Securities set forth in Schedule B opposite the
name of such Selling Shareholder as may be adjusted on a pro rata basis to
reflect the aggregate number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite
the name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities.
(c) Payment of the purchase price for the Initial U.S. Securities
shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and delivery of the certificates for the Initial U.S.
Securities shall be made against payment therefor at the office of ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters,
North Tower, World Financial Center, New York, New York 10281-1305, or (in
either case) at such other place or places as shall be agreed upon by the
Selling Shareholders and the Representatives, at 10:00 A.M. on the third
business day (unless postponed in accordance with the provisions of Sections
10) following the date the Registration Statement becomes effective (or, if the
Company has elected to rely upon Rule 430A of the 1933 Act Regulations, the
third business day after execution of the U.S. Pricing Agreement, unless the
U.S. Pricing Agreement is executed after 4:30 P.M., in which case on the
fourth business day thereafter), or such other time not later than ten business
days after such date as shall be agreed upon by the Selling Shareholders and
the Representatives (such time and date of payment and delivery being herein
called "Closing Time"). In addition, in the event that any or all of the U.S.
Option Securities are purchased by the U.S. Underwriters, payment of the
purchase price for, and delivery of certificates for, such U.S. Option
Securities shall be made at the offices set forth above, or at such other place
as shall be agreed upon by the Representatives and the Selling Shareholders
that granted such option to the U.S. Underwriters, on each Date of Delivery as
specified in the notice from the Representatives to such Selling Shareholders.
Payment shall be made to the appropriate Selling Shareholders by wire transfer
of, or certified or official bank check or checks drawn in, same day funds
payable to the order of the appropriate Selling Shareholders against delivery
to the
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Representatives, for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. Certificates for
the Initial U.S. Securities and the U.S. Option Securities, if any, shall be in
such denominations and registered in such names as the Representatives may
request in writing at least two business days before the Closing Time or the
relevant Date of Delivery, as the case may be.
(d) It is understood that each U.S. Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Securities or the U.S. Option Securities, if any, to be purchased by any U.S.
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder. The certificates
for the Initial U.S. Securities and the U.S. Option Securities, if any, will be
made available for examination and packaging by the Representatives not later
than 11:00 A.M. on the last business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
of the U.S. Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective (as and when requested by
the Representatives) and will notify the Representatives immediately,
and confirm the notice in writing, (i) when the Registration
Statement, or any post-effective amendment to the Registration
Statement, shall become effective, or any supplement to the
Prospectuses or any amended Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional
information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose. The
Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the
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earliest possible moment. If the Company elects to rely on Rule 434
under the 1933 Act Regulations, the Company will prepare a term sheet
that complies with the requirements of Rule 434 under the 1933 Act
Regulations. If the Company elects not to rely on Rule 434, the
Company will provide the U.S. Underwriters with copies of the form of
Prospectuses, in such number as the U.S. Underwriters may reasonably
request, and timely file with the Commission such Prospectuses in
accordance with Rule 424(b) of the 1933 Act by the close of business
in New York on the business day immediately succeeding the date of the
U.S. Pricing Agreement. If the Company elects to rely on Rule 434,
the Company will provide the U.S. Underwriters with copies of the
forms of Rule 434 Prospectuses, in such number as the U.S.
Underwriters may reasonably request, and timely file with the
Commission the form of Prospectuses complying with Rule 434(b)(2) of
the 1933 Act in accordance with Rule 424(b) of the 1933 Act by the
close of business in New York on the business day immediately
succeeding the date of the U.S. Pricing Agreement.
(b) The Company will give the Representatives notice of its
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, (including any revised prospectuses which the
Company proposes for use by the U.S. Underwriters or the Managers in
connection with the offering of the Securities which differs from the
prospectuses on file at the Commission at the time the Registration
Statement first becomes effective, whether or not any such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933
Act Regulations or any term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), will furnish the Representatives with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement or use any such prospectus to
which the Representatives or counsel for the U.S. Underwriters shall
have reasonably objected; provided, however, that such objection shall
not prevent the filing of any such amendment or supplement which, in
the opinion of counsel for the Company, is required to be filed,
pursuant to the 1933 Act, the 1933 Act Regulations, the 1934 Act or
the 1934 Act Regulations.
(c) The Company has furnished or will deliver to the
Representatives and counsel for the U.S. Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of
each amendment thereto (including
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exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives a conformed copy
of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the U.S. Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) The Company will deliver to each U.S. Underwriter,
without charge, from time to time until the effective date of the
Registration Statement (or, if the Company has elected to rely upon
Rule 430A, until such time the U.S. Pricing Agreement is executed and
delivered), as many copies of each preliminary prospectus as such U.S.
Underwriter may reasonably request, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each U.S. Underwriter, without charge, from
time to time during the period when the Prospectuses are required to
be delivered under the 1933 Act or the 1934 Act, such number of copies
of the U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request for the purposes contemplated by
the 1933 Act or the 1934 Act or the respective applicable rules and
regulations of the Commission thereunder; provided, that, in the event
that a U.S. Underwriter is required to deliver a U.S. Prospectus in
connection with sales of any of the U.S. Securities at any time nine
months or more after the time of issuance of the U.S. Prospectus, upon
the request of such U.S. Underwriter but at such U.S. Underwriter's
expense, the Company will prepare and deliver to such U.S. Underwriter
as many copies as it may request of a U.S. Prospectus (as amended or
supplemented) complying with Section 10(a)(3) of the 1933 Act. The
U.S. Prospectus and any amendments or supplements thereto furnished
to the U.S. Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) The Company will comply with the 1993 Act and the 1933
Act Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated by this Agreement, the International Purchase Agreement
and the Prospectuses. If, during the period in which a prospectus is
required to be delivered by an U.S. Underwriter under the
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1933 Act, any event shall occur as a result of which it is necessary
to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectuses will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
the light of the circumstances existing at the time it is delivered to
a purchaser, or if it shall be necessary during such period to amend
the Registration Statement or amend or supplement any Prospectus in
order to comply with the 1933 Act or 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will
furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably
request.
(f) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in
reliance upon Rule 430A of the 1933 Act Regulations, then following
the execution of the U.S. Pricing Agreement, the Company will prepare,
and timely file with the Commission in accordance with such Rule 430A
and Rule 424(b) of the 1933 Act Regulations, copies of amended
Prospectuses, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including amended
Prospectuses), containing all information so omitted and will use its
best efforts to cause such post-effective amendment to be declared
effective as promptly as practicable.
(g) The Company will endeavor, in cooperation with the
U.S. Underwriters and their counsel, to qualify the Securities for
offering and sale under the applicable securities laws of such
jurisdictions as the Representatives may designate; provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
take any action that would subject the Company to general service of
process or taxation in any jurisdiction where it is not so subject at
the date of this Agreement. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than
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45 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve month period beginning not
later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(i) [intentionally omitted]
(j) During a period of 180 days from the date of the U.S.
Pricing Agreement, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any capital
stock of the Company or any security convertible or exchangeable into
or exercisable for such capital stock (except for Common Shares issued
pursuant to employee benefit plans referred to in the Prospectuses,
pursuant to the exercise of options referred to in the Prospectuses or
pursuant to the employee stock purchase plan of the Company referred
to in the Prospectuses) or file any registration statement under the
1933 Act with respect to any of the foregoing (except for registration
statements on Form S-8 with respect to employee benefit plans referred
to in the Prospectuses or the employee stock purchase plan of the
Company referred to in the Prospectuses).
(k) In accordance with the Cuba Act and without
limitation to the provisions of Sections 6 and 7 hereof, the Company
agrees to indemnify and hold harmless each U.S. Underwriter from and
against any and all loss, liability, claim damage and expense
whatsoever (including fees and disbursements of counsel), as incurred,
arising out of any violation by the Company of the Cuba Act.
(l) The Company, during the period when the Prospectuses
are required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, copying and delivery to
the U.S. Underwriters of this Agreement, the U.S. Pricing Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation and
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delivery of the certificates for the Securities to the Underwriters, including
any capital duties, stamp duties and stock or other transfer taxes payable upon
the issuance, sale or delivery of the Securities to the Underwriters, and the
transfer of the Securities between the U.S. Underwriters and the Managers, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, the Selling Shareholders' respective counsel, accountants and other
advisors and the Trustees and their respective counsel, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(g) hereof and Section 3(g) of the International Purchase Agreement,
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, provided that the Company's
obligations with respect to the amounts included in this clause (v) and clause
(v) of Section 4 of the International Purchase Agreement shall not
exceed $10,000 in the aggregate, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, of each preliminary prospectus, and of the Prospectuses
and any amendments or supplements thereto including any term sheet delivered by
the Company pursuant to Rule 434 of the 1933 Act Regulations, (vii) the
preparation, copying and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, and (ix) the filing fees in connection
with the review by the NASD of the terms of the sale of the Securities.
(b) The Selling Shareholders, jointly and severally, will pay all
expenses incident to the performance of their respective obligations under, and
the consummation of the transactions contemplated by this Agreement, including
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters, and their transfer between the
U.S. Underwriters and the Managers.
(c) If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5, Section 9(a)(i) or Section 11
hereof, the Company and the Selling Shareholders, jointly and severally, shall
reimburse the U.S. Underwriters for all of their reasonable out-of-pocket
expenses relating to the transactions contemplated hereby, including the
reasonable fees and disbursements of counsel for the U.S. Underwriters.
(d) The provisions of this Section shall not affect any agreement
among the Company and the Selling Shareholders with respect to such costs and
expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are
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subject to the accuracy of the representations and warranties of the Company
and the Selling Shareholders herein contained, to the performance by the
Company and the Selling Shareholders of their obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective
not later than 5:30 P.M. on the date hereof, or with the consent of
the Representatives, at a later time and date, not later, however,
than 5:30 P.M. on the first business day following the date hereof, or
at such later time and date as may be approved by a majority in
interest of the U.S. Underwriters; and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the U.S. Underwriters. If
the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to
the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period and prior to Closing
Time the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the 1933
Act Regulations.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time,
of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the Company and the
Selling Shareholders, in form and substance reasonably
satisfactory to counsel for the U.S. Underwriters, to the
effect that:
(i) The Company has been duly incorporated
and is validly existing and in good standing under
the laws of the State of Illinois.
(ii) The Company has corporate power and
authority to conduct its business as described in the
Registration Statement and to execute and deliver and
perform its obligations under this Agreement, the
U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement.
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(iii) The Company is duly qualified to
transact business and is in good standing as a
foreign corporation in the States of Florida,
Indiana, Iowa, Maryland, Michigan, North Carolina,
South Carolina, Texas and Virginia (in rendering such
opinion such counsel shall be entitled to rely solely
on certificates of public officials of such States).
(iv) The authorized and outstanding
capital stock of the Company is as set forth in the
Prospectuses under the caption "Capitalization" and
under the caption "Description of Capital Stock"; the
issued and outstanding Common Shares, including the
Securities to be purchased by the U.S. Underwriters
and the Managers from the Selling Shareholders, have
been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding
shares of capital stock of the Company was issued in
violation of the preemptive rights of any stockholder
of the Company arising by operation of law, under the
charter or by-laws of the Company or any of its
subsidiaries or, to the knowledge of such counsel,
under any agreement to which the Company or any of
its subsidiaries is a party.
(v) The shareholders of the Company do not
have any preemptive rights with respect to the
Securities to be purchased by the U.S. Underwriters
and the Managers from the Selling Shareholders.
(vi) Except as disclosed in or specifically
contemplated by the Prospectuses, to the knowledge of
such counsel, there are no outstanding options,
warrants or other rights calling for the issuance of
any shares of capital stock of the Company or any
security convertible into or exchangeable for capital
stock of the Company. The stock option plans of the
Company described in the Prospectuses have been duly
authorized by the Company and the descriptions of the
stock option granted to ▇▇. ▇▇▇▇▇ and the stock
option plans of the Company contained in the
Prospectuses are accurate in all material requests.
(vii) This Agreement, the U.S. Pricing
Agreement, the International Purchase Agreement and
the International Pricing Agreement have each
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been duly authorized, executed and delivered by the
Company.
(viii) Such counsel has been advised by the
Commission that the Registration Statement has been
declared effective under the 1933 Act; any required
filing of the Prospectuses pursuant to Rule 424(b)
has been made in the manner and within the time
period required by Rule 424(b); and, to the knowledge
of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(ix) The Registration Statement, the
Prospectuses and each amendment or supplement to the
Registration Statement and Prospectuses as of their
respective effective or issue dates appeared on their
face to be appropriately responsive in all material
respects to the requirements of the 1933 Act and the
1933 Act Regulations, except that such counsel need
not express any opinion as to the financial
statements, schedules and other financial data
included therein or excluded therefrom, or the
exhibits to the Registration Statement (except to the
extent set forth in the next sentence of this
paragraph) and such counsel need not assume
responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement and the Prospectuses. To the
knowledge of such counsel without having made any
independent investigation and based upon
representations of officers of the Company as to the
factual matters, there were no contracts or documents
required to be described or referred to in, or to be
filed as exhibits to, the Registration Statement as
of its Effective Date which were not so described,
referred to or filed or incorporated by reference as
exhibits thereto.
(x) The Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, its
Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1996, its Current Report on
Form 8-K dated October 17, 1996 and the description
of the Common Shares contained in the Company's
Registration Statement on Form 8-A for such
securities, as of their respective filing or
effective dates, appeared on their face to be
appropriately responsive in all material respects
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30
to the requirements of the applicable provisions of
the 1934 Act, the 1934 Act Regulations, the 1933 Act
and the 1933 Act Regulations, except that such
counsel need not express any opinion as to the
financial statements, schedules and other financial
data included therein or excluded therefrom or the
exhibits to such documents (except to the extent set
forth in the last sentence of paragraph (ix) above)
(xi) The Common Shares conform in all
material respects to the description thereof under
the caption "Description of Capital Stock" in the
Prospectuses, and the form of certificate used to
evidence the Common Shares is in due and proper form
and complies with all requirements of the Illinois
Business Corporation Act and with any applicable
requirements of the charter and by-laws of the
Company.
(xii) To the knowledge of such counsel there
are no legal or governmental actions, suits or
proceedings pending or threatened against the Company
or any of its subsidiaries that are required to be
described in the Prospectuses that are not described
as required.
(xiii) The information in the Prospectuses
under "Description of Capital Stock," "Certain United
States Federal Tax Consequences to Non-United States
Holders" and in the Registration Statement under Item
15 of Form S-3 to the extent that it constitutes
matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, has been
reviewed by them and is correct in all material
respects; to the knowledge of such counsel, there are
no Illinois, New York or United States statutes or
regulations that are required to be described in the
Prospectuses that are not described as required.
(xiv) All descriptions in the Prospectuses
of contracts and other documents to which the Company
or any of its subsidiaries is a party are accurate in
all material respects.
(xv) No authorization, approval, consent or
order of any governmental authority or agency or, to
the knowledge of such counsel, any court (other than
under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as may be required under
the securities or blue sky laws of the various
states, as to which such counsel
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31
need express no opinion) is required under the laws
of the United States or the States of Illinois or New
York (except that such counsel need not express any
opinion regarding matters relating to the regulation
of insurance companies as such or consumer credit
laws) to be obtained by the Company for the due
authorization, execution and delivery of this
Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the
International Pricing Agreement or in connection with
the offering, issuance or sale of the U.S. Securities
to the U.S. Underwriters and the International
Securities to the Managers; and, except as otherwise
stated in such opinion (the form of which has
previously been provided to ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the U.S. Underwriters), the execution,
delivery and performance of this Agreement, the U.S.
Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement,
and the consummation of the transactions contemplated
herein and therein and compliance by the Company with
its obligations hereunder and thereunder will not,
whether with or without the giving of notice or lapse
of time or both, (A) constitute a breach of, or
default or Repayment Event by the Company under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to,
any contract, credit agreement, note, or any other
agreement or instrument listed on Schedule D hereto,
(B) violate the provisions of the charter or by-laws
of the Company, (C) contravene any applicable law,
statute, rule or regulation of the United States or
the States of New York or Illinois, or (D) to the
knowledge of such counsel violate any, judgment,
order, writ or decree of any New York, Illinois or
federal executive, legislative, judicial,
administrative or regulatory body applicable to the
Company or any of its subsidiaries or any of their
respective properties.
(xvi) To the knowledge of such counsel,
except as disclosed in the Prospectuses, there are no
persons with registration or other similar rights to
have any securities registered pursuant to the
Registration Statement or otherwise registered by the
Company under the 1933 Act.
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32
(xvii) The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the 1940 Act.
(xviii) No authorization, approval, consent
or order of any governmental authority or agency or,
to the knowledge of such counsel, any court (other
than under the 1933 Act and the 1933 Act Regulations,
which have been obtained or as may be required under
the securities or blue sky laws of the various
states, as to which such counsel need express no
opinion) is required under the laws of the United
States or the States of Illinois or New York (except
that such counsel need not express any opinion
regarding matters relating to the regulation of
insurance companies as such or consumer credit laws)
to be obtained by the Selling Shareholders for the
execution and delivery of this Agreement, the U.S.
Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement, or
in connection with the offer or sale of the U.S.
Securities hereunder and the International Securities
pursuant to the International Purchase Agreement or
the consummation of the transactions contemplated by
this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the
International Pricing Agreement; and the Trustees are
duly and validly authorized to take each such action
without the approval of any other person or court and
the execution hereof and of the U.S. Pricing
Agreement, the International Purchase Agreement and
the International Pricing Agreement by the Trustees
is an act which validly binds each Selling
Shareholder which is a trust to the terms of this
Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the
International Pricing Agreement, respectively.
(xix) This Agreement, the U.S. Pricing
Agreement, the International Purchase Agreement and
the International Pricing Agreement have each been
duly executed and delivered by or on behalf of each
Selling Shareholder.
(xx) The execution, delivery and performance
of this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the
International Pricing Agreement and the sale and
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33
delivery of the Securities and the consummation of
the transactions contemplated herein and therein and
compliance by the Selling Shareholders with the terms
of this Agreement and the International Purchase
Agreement have been duly authorized by all necessary
action on the part of the Selling Shareholders and do
not and will not, whether with or without the giving
of notice or passage of time or both, violate, or
result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities
pursuant to, any treaty, law, statute, regulation or
decree, nor will such action result in any violation
of the provisions of the trust agreement or other
organizational or governing instruments of the
Selling Shareholders, if applicable, or any
applicable treaty, law, statute or regulation under
the laws of the United States or the States of
Illinois or New York, or, to the knowledge of such
counsel, violate any judgment, order, writ or decree
of any government, government instrumentality or
court, foreign or domestic, having jurisdiction over
any Selling Shareholder; with respect to the Selling
Shareholders that are trusts, the trust agreement or
other organizational or governing instrument relating
to such trust is a valid, binding and enforceable
agreement under the laws of the State of Illinois
and, to such counsel's knowledge, such agreement or
other instrument has not been modified or revoked and
is in full force and effect and the powers granted
thereby and thereunder to the Trustees were validly
granted and have not been modified or revoked and are
in full force and effect; and, to the knowledge of
such counsel, no legal action is pending or
threatened that challenges the validity of such trust
agreement or other organizational or governing
instrument or such powers granted to the Trustees.
(xxi) Based solely upon a review of the
Company's stock transfer book, to the knowledge of
such counsel, each Selling Shareholder other than
▇▇▇▇ ▇. ▇▇▇▇▇ is, and immediately prior to Closing
time will be, the sole registered owner of the U.S.
Securities to be sold by such Selling Shareholder;
the Simon Agreement has been duly authorized,
executed and delivered by the Company and ▇▇▇▇ ▇.
▇▇▇▇▇, and to the knowledge of such counsel, the
Simon Agreement is in full force and effect, without
termination or cancellation
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34
provisions having been exercised by either party
thereto, and is enforceable in accordance with its
terms except that enforcement may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether enforcement is sought in
equity or at law); upon payment for the U.S.
Securities and when the U.S. Underwriters take
delivery of the certificates representing the U.S.
Securities and, assuming such certificates are
registered in the names of the U.S. Underwriters and
the U.S. Underwriters purchased such U.S. Securities
for value in good faith (as defined in Section 1-201
of the Illinois Uniform Commercial Code (the "UCC"))
and without notice of any adverse claim (as defined
in Section 8-302 of the UCC), each U.S. Underwriter
will have acquired such U.S. Securities free of any
adverse claim; and such Selling Shareholder has the
full right, power and authority (A) to enter into
this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the
International Pricing Agreement and (B) to sell,
transfer and deliver the Securities to be sold by
such Selling Shareholder under this Agreement and the
International Purchase Agreement.
(2) The favorable opinion, dated as of Closing Time,
of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the U.S. Underwriters,
with respect to the matters set forth in (i) (as to the
Company's existence and good standing), (v) (solely as to
preemptive rights arising by operation of law or under the
charter or by-laws of the Company), (vii), (viii), the first
sentence of (ix), (xi) and (xiii) (solely as to the
information in the Prospectus under "Description of Capital
Stock -- Common Shares") of subsection (b)(1) of this Section.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, ▇▇▇▇▇▇▇▇▇,
Will & ▇▇▇▇▇ and ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ shall each additionally
state that such counsel has participated in conferences with
officers and representatives of the Company, the Selling
Shareholders and representatives of the independent
accountants of the Company and the Underwriters, at which the
contents of the Registration Statement and the Prospectuses
were discussed, and that although such counsel is not required
to pass upon or assume any responsibility for the accuracy,
completeness or
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35
fairness of the statements contained in the Registration
Statement or the Prospectuses (except to the extent
specifically set forth in subsections (b)(1) and (b)(2)
respectively) and are not required to make an independent
check or verification thereof, except to the extent otherwise
set forth in their opinion, based upon the foregoing, no facts
have come to their attention to lead them to believe that as
of its effective date, the Registration Statement, contained
an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or the Prospectuses
as of their dates (unless the term "Prospectuses" refers to a
prospectus which has been provided to the U.S. Underwriters by
the Company for use in connection with the offering of the
Securities which differs from the Prospectuses on file at the
Commission at the time the Registration Statement becomes
effective, in which case at the time it is first provided to
the U.S. Underwriters for such use) and as of the Closing Time
contained or contain an untrue statement of a material fact or
omitted or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading, except that such
counsel need not express any opinion or belief as to the
financial statements, schedules and other financial data
included or incorporated by reference therein or excluded from
the Registration Statement or the Prospectuses or the exhibits
to the Registration Statement.
(c) At Closing Time there shall not have been, since the date
hereof or since the respective dates as of which information is given
in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of
the Company signed by the President or a Vice President of the Company
and the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties
of the Company contained in Section 1(a) are true and correct with the
same force and effect as though expressly made at and as of Closing
Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under this
Agreement at or prior to Closing Time, and (iv) no stop order
suspending the
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36
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission. As used in this Section 5(c), the term "Prospectuses"
means the Prospectuses in the form first used to confirm sales of the
Securities.
(d) At Closing Time the Representatives shall have
received a certificate of each of the Selling Shareholders, dated as
of Closing Time, to the effect that (i) to the knowledge of such
Selling Shareholder (or, if such Selling Shareholder is a trust, to
the knowledge of the Trustees thereof), there has been no material
adverse change as described in Section 5(c), (ii) the representations
and warranties of such Selling Shareholder contained in Section 1(b)
are true and correct with the same force and effect as though
expressly made at and as of Closing Time and (iii) such Selling
Shareholder has complied in all material respects with all agreements
and satisfied all conditions on its part to be performed under this
Agreement at or prior to Closing Time.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter
dated such date, in form and substance satisfactory to the
Representatives, to the effect that (i) they are independent public
accountants with respect to the Company within the meaning of the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations; (ii) in their opinion, the financial statements and
financial statement schedules, if any, audited by them and included or
incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations; (iii) based upon limited procedures set
forth in detail in such letter (which shall include, without
limitation, the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information,
with respect to the Company's unaudited balance sheet as of June 30,
1996, and the Company's unaudited statements of income, shareholders'
equity and cashflows for the twenty-six weeks ended June 30, 1996, and
the Company unaudited statements of income and cash flows for the
twenty-six weeks ended July 2, 1995, included in the Registration
Statement and the Company's condensed financial statements for the
same periods included in the Company's quarterly report on Form 10-Q
for the quarter ended June 30, 1996 and incorporated by reference in
the Registration Statement (collectively, the "Unaudited Financial
Statements")), nothing has come to their attention which
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37
causes them to believe that (A) any material modifications should be
made to the Unaudited Financial Statements for them to be in
conformity with generally accepted accounting principles or (B) the
Unaudited Financial Statements do not comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations or (C) at a specified date not more than three days prior
to the date of this Agreement, there has been any change in the
capital stock of the Company or any increase in the long-term debt or
any decrease in the working capital or stockholders' equity of the
Company as compared with the amounts shown in the June 30, 1996
balance sheet included in the Registration Statement or, during the
period from July 1, 1996 to a specified date not more than three days
prior to the date of this Agreement, there were any decreases as
compared with the corresponding period in the preceding year, in
revenues, income from operations, net income or net income per share
of the Company, except in all instances for changes, increases or
decreases which the Registration Statement and the Prospectuses
disclose have occurred or may occur or which such letter discloses
have occurred; (iv) in addition to the examination referred to in
their opinions and the limited procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information which are included or incorporated by
reference in the Registration Statement and Prospectuses and which are
specified by the Representatives, and have found such amounts,
percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company
identified in such letter; and (v) they have compared the information
included or incorporated by reference in the Prospectuses under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301 and 402, respectively, of Regulation S-K.
(f) At Closing Time the Representatives shall have received
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three days prior to
Closing Time and, if the Company has elected to rely on Rule 430A of
the 1933 Act Regulations, to the further effect that they have carried
out procedures as
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38
specified in clause (iv) of subsection (e) of this Section with
respect to certain amounts, percentages and financial information
specified by the Representatives and deemed to be a part of the
Registration Statement pursuant to Rule 430(A)(b) and have found such
amounts, percentages and financial information to be in agreement with
the records specified in such clause (iv).
(g) At the Closing Time the Securities shall have been
approved for inclusion in the Nasdaq National Market and such approval
shall not have been withdrawn or limited.
(h) At Closing Time and at each Date of Delivery counsel for
the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to
pass upon the offer and sale of the U.S. Securities as contemplated
herein and the International Securities as contemplated in the
International Purchase Agreement and related proceedings, or the
fulfillment of any of the conditions herein or therein contained; and
all proceedings taken by the Company or the Selling Shareholders in
connection with the sale of the U.S. Securities as contemplated herein
and the International Securities as contemplated in the International
Purchase Agreement shall be reasonably satisfactory in form and
substance to the Representatives and counsel for the U.S.
Underwriters.
(i) In the event that the U.S. Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or any portion
of the U.S. Option Securities, the representations and warranties of
the Company and the Selling Shareholders contained herein and the
statements in any certificates furnished by the Company and the
Selling Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(1) Certificates, dated such Date of Delivery, of
(x) the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
and (y) the Selling Shareholders confirming that the
certificates delivered at the Closing Time pursuant to Section
5(c) and 5(d) hereof, respectively, remain true and correct as
of such Date of Delivery.
(2) The favorable opinion of ▇▇▇▇▇▇▇▇▇, Will &
▇▇▇▇▇, counsel for the Company and the Selling Shareholders,
in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of
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Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Sections 5(b)(1) and 5(b)(3)
hereof.
(3) The favorable opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Sections 5(b)(2) and 5(b)(3)
hereof.
(4) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this Section 5(i)(4) shall be a
date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company and the Selling
Shareholders at any time at or prior to Closing Time, and such termination
shall be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 3(k), 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Company and the Selling Shareholders jointly and severally
agree to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or prospectus, including the Prospectuses
(or any amendment or supplement
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thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any alleged untrue statement or omission;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the indemnifying party and
parties; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the third sentence of Section 6(c) hereof, the
fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto), (B) this
indemnity agreement, with respect to any preliminary prospectus, shall not
apply to any loss, liability, claim, damage or expense if a copy of the U.S.
Prospectus (as then amended or supplemented, if the Company shall have
furnished any amendments or supplements thereto to such U.S. Underwriter) was
not sent or given by or on behalf of such U.S. Underwriter to the person
asserting any such loss, liability, claim, damage or expense if such is
required by law at or prior to the written confirmation of the sale of such
U.S. Securities to such person and if the U.S. Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, liability,
claim, damage or expense, and (C) the obligations of each Selling Shareholder
for indemnification pursuant to this Section 6, for contribution pursuant to
Section 7 and for any breach of the representation and warranty of such Selling
Shareholder set forth
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in Section 1(b)(vi) of this Agreement (to the extent such breach does not also
constitute a breach of any other representation and warranty of such Selling
Shareholder) (together with any liability of such Selling Shareholder under
Section 6 of the International Purchase Agreement or for any breach of the
representation and warranty set forth in Section 1(b)(vi) of the International
Purchase Agreement (to the extent such breach does not also constitute a breach
of any other representation and warranty of such Selling Shareholder)) shall be
limited to the net proceeds received by such Selling Shareholder from the sale
of his or its Securities pursuant to this Agreement and the International
Purchase Agreement.
In making a claim for indemnification under this Section 6 or
contribution under Section 7 hereof by the Company or the Selling Shareholders,
the indemnified parties may proceed against either (1) both the Company and the
Selling Shareholders jointly or (2) the Company only, but may not proceed
solely against the Selling Shareholders. In the event that the indemnified
parties are entitled to seek indemnity or contribution hereunder against any
loss, liability, claim, damage and expense incurred with respect to a final
judgment from a trial court then, as a precondition to any indemnified party
obtaining indemnification or contribution from any Selling Shareholder, the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution under this
Agreement with respect to such loss, liability, claim, damage or expense (the
"Final Judgment") from the Company and the Selling Shareholders and shall seek
to satisfy such Final Judgment in full from the Company by making a written
demand upon the Company for such satisfaction. Only in the event such Final
Judgment shall remain unsatisfied in whole or in part 30 days following the
date of receipt by the Company of such demand shall any party entitled to
indemnification hereunder have the right to take action to satisfy such Final
Judgment by making demand directly on the Selling Shareholders (but only if and
to the extent the Company has not already satisfied such Final Judgment,
whether by settlement, release or otherwise). The indemnified parties shall,
however, be relieved of their obligation to first obtain a Final Judgment, to
seek to obtain payment from the Company with respect to such Final Judgment or,
having sought such payment, to wait such 30 days after failure by the Company
to immediately satisfy any such Final Judgment if (A) the Company files a
petition for relief under the United States Bankruptcy Code (the "Bankruptcy
Code"), (B) an order for relief is entered against the Company in an
involuntary case under the Bankruptcy Code, (C) the Company makes an assignment
for the benefit of its creditors, or (D) any court orders or approves the
appointment of a receiver or custodian for the Company or a substantial portion
of its assets. The foregoing provisions of this paragraph are not intended to
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require any indemnified party to obtain a Final Judgement against the Company
or the Selling Shareholders before obtaining reimbursement of expenses pursuant
to clause (a)(iii) of this Section 6. However, the indemnified parties shall
first seek to obtain such reimbursement in full from the Company by making a
written demand upon the Company for such reimbursement. Only in the event such
expenses shall remain unreimbursed in whole or in part 30 days following the
date of receipt by the Company of such demand shall any indemnified party have
the right to receive reimbursement of such expenses from the Selling
Shareholders by making written demand directly on the Selling Shareholders (but
only if and to the extent the Company has not already satisfied the demand for
reimbursement, whether by settlement, release or otherwise). The indemnified
parties shall, however, be relieved of their obligation to first seek to obtain
such reimbursement in full from the Company or, having made written demand
therefor, to wait such 30 days after failure by the Company to immediately
reimburse such expenses if (I) the Company files a petition for relief under
the Bankruptcy Code, (II) an order for relief is entered against the Company in
an involuntary case under the Bankruptcy Code, (III) the Company makes an
assignment for the benefit of its creditors, or (IV) any court orders or
approves the appointment of a receiver or custodian for the Company or a
substantial portion of its assets.
(b) Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each
Selling Shareholder and each Trustee against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary U.S. prospectus or the
U.S. Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such U.S.
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the U.S.
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement.
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If it so elects within a reasonable time after receipt of such notice, an
indemnifying party may assume the defense of such action, with counsel chosen
by it, unless the indemnified parties reasonably object to such assumption on
the grounds that there are legal defenses available to them which are different
from, or in addition to, those available to such indemnifying party. If the
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating
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the unpaid balance as unreasonable, in each case prior to the date of such
settlement.
(e) The provisions of this Section shall not affect any agreement
among the Company and the Selling Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the U.S. Underwriters
on the other hand from the offering of the U.S. Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) 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 of the U.S.
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, 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 U.S. Underwriters on the other hand in
connection with the offering of the U.S. Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the U.S. Securities pursuant to this Agreement
(before deducting expenses) received by the Selling Shareholders and the total
underwriting discount received by the U.S. Underwriters, in each case as set
forth on the cover of the U.S. Prospectus, bear to the aggregate initial public
offering price of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Shareholders or by the U.S. Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholders and the U.S. Underwriters agree
that it would not be just and equitable if
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contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the U.S. Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company and each
Trustee shall have the same rights to contribution as the Selling Shareholder
that is a trust of which such Trustee is a Trustee. The U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial U.S. Securities set forth opposite their
respective names in Schedule A hereto and not joint.
Notwithstanding the provisions of this Section 7, each Selling
Shareholder's liability for contribution shall be limited as specified in
clause (C) of the proviso to Section 6(a). Any claim for contribution
pursuant to this Section 7 against any of the Selling Shareholders may be made
only in accordance with the last paragraph of Section 6(a).
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The provisions of this Section shall not affect any agreement among
the Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the U.S. Pricing Agreement, or contained in certificates of
officers of the Company or the Selling Shareholders submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling Shareholders, and
shall survive delivery of the U.S. Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to
the Company and the Selling Shareholders, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the U.S.
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Shares has been suspended or materially limited by the Commission or the
Nasdaq National Market, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York or Illinois authorities. As used in this
Section 9(a), the term "U.S. Prospectus" means the U.S. Prospectus in the form
first used to confirm sales of the U.S. Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party
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to any other party except as provided in Section 4 hereof. Notwithstanding any
such termination, the provisions of Sections 1, 3(k), 6, 7 and 8 hereof shall
remain in effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one
or more of the U.S. Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement and the U.S. Pricing Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting U.S.
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of
the non-defaulting U.S. Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the U.S. Underwriters to purchase and
of the relevant Selling Shareholders to sell the Option Securities to
be purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the U.S. Underwriters to purchase and the relevant Selling
Shareholders to sell the relevant U.S. Option Securities, as the case may be,
either (i) the Representatives or (ii) the Company and any Selling Shareholder
shall have the right to postpone Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "U.S.
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Underwriter" includes any person substituted for a U.S. Underwriter under this
Section 10.
SECTION 11. Default by One or More of the Selling Shareholders. If a
Selling Shareholder shall fail at Closing Time or at a Date of Delivery to sell
and deliver the number of U.S. Securities that such Selling Shareholder or
Selling Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of U.S. Securities to be sold by them hereunder to the
total number to be sold by all Selling Shareholders as set forth in Schedule B
hereto, then the U.S. Underwriters may, at the option of the Representatives,
by notice from the Representatives to the Company and the non-defaulting
Selling Shareholders, either (a) terminate this Agreement without any liability
on the part of any non-defaulting party except that the provisions of Sections
1, 3(k), 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to
purchase the U.S. Securities which the non-defaulting Selling Shareholders have
agreed to sell hereunder. No action taken pursuant to this Section 11 shall
relieve any Selling Shareholder so defaulting from liability, if any, in
respect of such default.
In the event of any default by any Selling Shareholder as referred to
in this Section 11, each of the Representatives, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectuses or in
any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the Representatives at ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇;
notices to the Company shall be directed to it at APAC TeleServices, Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇
▇. ▇▇▇▇▇; notices to any Selling Shareholder which is not a trust shall be
directed to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and notices to the Selling Shareholders
which are trusts shall be directed to M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ c/o TCS Group,
L.L.C., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 13. Parties. This Agreement and the U.S. Pricing Agreement
shall each inure to the benefit of and be binding upon the U.S. Underwriters,
the Company and the Selling Shareholders and their respective successors, heirs
and legal representatives.
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Nothing expressed or mentioned in this Agreement or the U.S. Pricing Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the U.S. Underwriters, the Company and the Selling Shareholders and
their respective successors, heirs and legal representatives and the
controlling persons, officers and directors and Trustees referred to in
Sections 6 and 7 and their respective successors, heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the U.S. Pricing Agreement or any provision herein
or therein contained. This Agreement and the U.S. Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors, heirs and legal representatives
and said controlling persons, officers and directors and Trustees and their
respective successors, heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of U.S. Securities from any
U.S. Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company and the Selling
Shareholders, a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
APAC TELESERVICES, INC.
By:
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Title:
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Seven Hundred Thirty U/A/D 4/2/94
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Seven Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Seven Hundred Thirty U/A/D 4/2/94
----------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Four Hundred Thirty U/A/D 4/2/94
50
51
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Four Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Trustee of the ▇▇▇▇▇▇▇▇
1996 Charitable Remainder Unitrust
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
----------------------------------------
Authorized Signatory
For themselves and as Representatives of the other
U.S. Underwriters named in Schedule A hereto.
51
52
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇ Brothers Inc. . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,280,000
=========
Sch A - 1
53
SCHEDULE B
Number of Maximum
Initial Number of
U.S. U.S. Option
Securities Securities
Name to be sold to be sold
---- ---------- ----------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . 720,000
▇▇▇▇▇▇▇▇ 1996 Charitable
Remainder Unitrust . . . . . . . . . . . . . . . . . . . . . 880,000 480,000
Trust Seven Hundred Thirty
U/A/D 4/2/94 . . . . . . . . . . . . . . . . . . . . 800,000
Trust Four Hundred Thirty
U/A/D 4/2/94 . . . . . . . . . . . . . . . . . . . . 800,000
▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . 80,000 12,000
--------- --------
Total . . . . . . . . . . . . . . . . . . 3,280,000 492,000
========= ========
Sch B - 1
54
SCHEDULE C
Certain Clients of the Company
▇.▇. Penney Life Insurance Company (each contract with ▇.▇.
▇▇▇▇▇▇ Life Insurance Company includes an exhibit thereto
regarding the services to be performed for Mass Marketing
Insurance)
American Bankers Life Assurance Company
Discover Card Services, Inc.
Western Union Financial Services, Inc.
United Parcel Service General Services Company
Chevy Chase Bank
Quill Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Corporation
AT&T
Sch C - 1
55
SCHEDULE D
Certain Contracts and Other Agreements
1. Credit Agreement, dated as of June 5, 1996, among APAC TeleServices,
Inc., the Lenders party thereto and ▇▇▇▇▇▇ Trust and Savings Bank.
2. APAC TeleServices, Inc. Revolving Note (Facility A) dated as of _____,
19 __.
3. APAC TeleServices, Inc. Revolving Note (Facility B) dated as of _____,
19 __.
4. APAC TeleServices, Inc. Facility B Term Note dated as of _____, 19 __.
5. All Industrial Revenue Bonds described in the "Notes to Financial
Statements" contained in the Prospectus.
6. Registration Rights Agreement dated as of October 3, 1995 between APAC
TeleServices, Inc., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Co-Trustees of the
1994 ▇▇▇▇▇▇▇▇ Family Trust No. 1 u/a/d April 2, 1994 and the 1994
▇▇▇▇▇▇▇▇ Family Trust No. 2 u/a/d April 2, 1994, as co-trustees.
7. Tax Agreement dated as of October 2, 1995 between APAC TeleServices,
Inc., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Co-Trustees of the 1994 ▇▇▇▇▇▇▇▇
Family Trust No. 1 u/a/d April 2, 1994 and the 1994 ▇▇▇▇▇▇▇▇ Family
Trust No. 2 u/a/d April 2, 1994, as co-trustees.
8. Each contract and agreement between the Company and the following
clients of the Company:
▇.▇. ▇▇▇▇▇▇ Life Insurance Company (each contract with ▇.▇.
Penney Life Insurance Company includes an exhibit thereto
regarding the services to be performed for Mass Marketing
Insurance)
American Bankers Life Assurance Company
Discover Card Services, Inc.
Western Union Financial Services, Inc.
United Parcel Service General Services Company
AT&T
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Corporation
Chevy Chase Bank
Quill Corporation
Sch D - 1
56
Exhibit A
3,280,000 Shares
APAC TELESERVICES, INC.
(an Illinois corporation)
Common Shares
(Par Value $.01 Per Share)
PRICING AGREEMENT
-----------------
_______, 1996
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
as Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
Reference is made to the U.S. Purchase Agreement dated _______, 1996
(the "U.S. Purchase Agreement") relating to the purchase by the several U.S.
Underwriters named in Schedule A thereto, for whom you are acting as
representatives (the "Representatives"), of the above Common Shares (the
"Initial U.S. Securities"), of APAC TeleServices, Inc., an Illinois corporation
(the "Company").
Pursuant to Section 2 of the U.S. Purchase Agreement, the Company and
the Selling Shareholders named in Schedule B to the U.S. Purchase Agreement
(the "Selling Shareholders") agree with each U.S. Underwriter as follows:
Exh. A - 1
57
1. The initial public offering price per share for the Initial
U.S. Securities, determined as provided in said Section 2, shall be
$_________________.
2. The purchase price per share for the Initial U.S. Securities
to be paid by the several U.S. Underwriters shall be $ ,
being an amount equal to the initial public offering price set forth
above less $ per share.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
Exh. A - 2
58
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders,
a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the U.S. Underwriters, the Company and
the Selling Shareholders in accordance with its terms.
Very truly yours,
APAC TELESERVICES, INC.
By:
-------------------------------------
Title:
----------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
Exh. A - 3
59
----------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
----------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Trustee of the ▇▇▇▇▇▇▇▇ 1996
Charitable Remainder Unitrust
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Exh. A - 4
60
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
--------------------------------
Authorized Signatory
For themselves and as Representatives of the
other U.S. Underwriters named in the Purchase Agreement
Exh. A - 5