EXHIBIT 1.3
1,600,000 Shares(1)
PRINTWARE, INC.
Common Stock
AGREEMENT AMONG UNDERWRITERS
R. J. STEICHEN & COMPANY ______________, 1996
As Representative of the several Underwriters
named in Schedule II to Exhibit A annexed hereto
Midwest Plaza, Suite 1100
801 Nicollet Mall
Minneapolis, Minnesota 55402
Dear Sirs:
1. UNDERWRITING AGREEMENT. We understand that an underwriting
agreement (the "Underwriting Agreement") attached hereto as EXHIBIT A with
respect to 1,600,000 shares (the "Firm Shares") of common stock, $.01 par value
per share ("Common Stock"), of Printware, Inc., a Minnesota corporation (the
"Company"), proposed to be sold by the Company and by certain shareholders of
the Company (the "Selling Shareholders") is to be entered into among the
Company, the Selling Shareholders, and you and other prospective underwriters,
including us, acting severally and not jointly. The parties on whose behalf you
execute the Underwriting Agreement are named in Schedule II thereto and are
herein called the "Underwriters." The Underwriting Agreement also provides for
the grant by the Company and the Selling Shareholders to the several
Underwriters of an option, on the terms and conditions set forth therein, to
purchase up to an additional 240,000 shares of Common Stock (the "Option
Shares"). The Firm Shares and any Option Shares purchased pursuant to the
Underwriting Agreement are hereinafter collectively called the "Shares." It is
also understood that changes may be made to those who are to be Underwriters and
to the respective aggregate number of Shares to be purchased by them, but that
the aggregate number of the Shares to be purchased by us as set forth in the
accompanying form of Underwriting Agreement will not be changed without our
consent except as provided herein or in the Underwriting Agreement.
2. REGISTRATION STATEMENT AND PROSPECTUS. As used herein, the terms
"Registration Statement," "Preliminary Prospectus" and "Prospectus" shall have
the meanings ascribed to them in the Underwriting Agreement. You will furnish
to us as soon as possible copies of the Prospectus to be used in connection with
the offering of the Shares. We confirm that, if requested by you as
Representative, we have furnished a copy of any amended Preliminary Prospectus
to each person to whom we have furnished a copy of any previous Preliminary
Prospectus, and we confirm that we have delivered and agree that we will deliver
all Preliminary Prospectuses and Prospectuses and all supplements thereto
required for compliance with the
________________________
(1) Plus an option to purchase up to 240,000 additional shares to cover
over-allotments.
provisions of Rule 15c2-8 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). We consent to being named in the Prospectus as one of the
Underwriters of the Shares.
3. AUTHORITY AND COMPENSATION. We hereby authorize you, as our
Representative and on our behalf, to enter into the Underwriting Agreement with
the Company in substantially the form attached hereto as EXHIBIT A and to take
such action as you deem advisable in connection with the performance of the
Underwriting Agreement and this Agreement and the purchase, carrying, sale and
distribution of the Shares. You may waive performance or satisfaction by the
Company of other obligations or conditions included in the Underwriting
Agreement if, in your judgment, such waiver will not have a material adverse
effect upon the interests of the Underwriters.
As compensation for your services, we will pay you an amount equal to
$_____ per share with respect to each share of the Shares which we agree to
purchase under the Purchase Agreement, and you may charge our account therefor.
4. PUBLIC OFFERING. In connection with the public offering of the
Shares, we authorize you, in your discretion:
(a) To determine the time of the initial public offering, to
change the public offering price and the concessions and discounts to
dealers after the initial public offering, to furnish the Company with the
information to be included in the Registration Statement or Prospectus with
respect to the terms of offering and to determine all matters relating to
advertising and communications with dealers or others;
(b) To reserve for sale to dealers selected by you ("Selected
Dealers") and to others, all or any part of our Shares, such reservations
for sales to others to be as nearly as practicable in proportion to the
respective underwriting obligations of the Underwriters unless you agree to
a smaller proportion at the request of any Underwriter and, from time to
time, to add to the reserved Shares any Shares retained by us remaining
unsold and to release to us any of our Shares reserved but not sold;
(c) To sell reserved Shares, as nearly as practicable in
proportion to the respective reservations, to Selected Dealers at the
public offering price less the Selected Dealers' concession and to others
at the public offering price; and
(d) To buy Shares for our account from Selected Dealers at the
public offering price less such amount not in excess of the Selected
Dealers' concession as you determine.
We authorize you to determine the form and manner of any communications or
agreements with Selected Dealers. If there shall be any agreements with
Selected Dealers, you are authorized to act as manager thereunder, and we agree
in such event to be governed by the terms and conditions of such agreements.
The form of Selected Dealers' Agreement attached hereto as EXHIBIT B is
satisfactory to us.
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Sales of Shares between Underwriters may be made with your prior consent,
or as you deem advisable for Blue Sky purposes.
After advice from you that the Shares have been released for public
offering, we will offer to the public in conformity with the terms of offering
set forth in the Prospectus such of our Shares as you advise us are not
reserved.
If, prior to the termination of this Agreement, you shall purchase or
contract to purchase, in the open market or otherwise, any Shares sold by us
(otherwise than through you) pursuant to this Agreement, we agree to repurchase
such Shares on demand at a price equal to the total cost of such purchase made
by you as Representative, including commissions, if any, and transfer taxes on
the redelivery. Certificates for the Shares delivered on such repurchase need
not be the identical certificates so purchased by you. In lieu of such action,
you may in your discretion sell for our account the Shares so purchased and
debit or credit our account for the loss or profit resulting from such sale, or
charge our account with an amount not in excess of the Selected Dealers'
concession with respect to such Shares.
5. PAYMENT AND DELIVERY. We authorize you to make payment on our
behalf to the Company of the purchase price of our Shares, to take delivery of
our Shares, registered as you may direct in order to facilitate deliveries, and
to deliver our reserved Shares against sales. At your request, we will pay you
an amount equal to the public offering price, less the selling concession, of
either our Shares or our unreserved Shares as you direct, and such payment will
be directed to our account and applied to the payment of the purchase price.
After you receive payment for reserved Shares sold for our account, you will
remit to us the purchase price (if any) paid by us for such Shares and credit or
debit our account with the difference between the sale price and the purchase
price thereof. You will deliver to us our unreserved Shares promptly, and our
reserved but unsold Shares against payment of the purchase price therefor
(except in the case of Shares for which payment has previously been made), as
soon as practicable after the termination of the provisions referred to in
Section 9 hereof, except that if the aggregate number of reserved but unsold
Shares upon such termination does not exceed 10% of the total number of the
Shares, you may in your discretion sell such reserved but unsold Shares for the
accounts of the several Underwriters as soon as practicable after such
termination, at such prices and in such manner as you determine.
6. AUTHORITY TO BORROW. In connection with the purchase or carrying
of our Shares, we authorize you, in your discretion, to advance your funds for
our account, charging current interest rates, to arrange loans for our account,
and in connection therewith to execute and deliver any notes or other
instruments and to hold or pledge as security any of our Shares. Any lender may
rely upon your instructions in all matters relating to any such loan. Any
Shares held by you for our account may be delivered to us for carrying purposes
and, if so delivered, will be redelivered to you upon demand.
7. STABILIZATION AND OVER-ALLOTMENT. We authorize you, in your
discretion, to make purchases and sales of Shares and of the outstanding shares
of Common Stock, in the open market or otherwise, for long or short account, on
such terms as you deem advisable, and to over-allot in arranging sales. Such
purchases and sales and over-allotments will be made for the accounts of the
Underwriters as nearly as practicable in proportion to their respective
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underwriting obligations. We authorize you, in your discretion, to cover any
short position incurred pursuant to this Section by purchasing securities on
such terms as you deem advisable. At no time will our net commitment under the
foregoing provisions of this Section exceed 15% of our underwriting obligation.
We will on demand take up at cost any securities so purchased and deliver any
securities so sold or over-allotted for our account, and, if any other
Underwriter defaults in its corresponding obligation, we will assume our
proportionate share of such obligation without relieving the defaulting
Underwriter from liability. Upon request, we will advise you of the Shares
retained by us and unsold and will sell to you for the account of one or more of
the Underwriters such of our unsold Shares at such price, not less than the net
price to Selected Dealers nor more than the public offering price, as you
determine.
If you effect stabilizing purchases pursuant to Section 7 hereof, you will
notify us promptly of the initiation and termination thereof. If stabilization
is effected, we will furnish to you not later than three business days following
the date on which stabilizing was commenced such information as is required by
Rule 17a-2(d) under the Exchange Act.
8. OPEN MARKET TRANSACTIONS. We and you agree not to bid for,
purchase, attempt to induce others to purchase, or sell, directly or indirectly,
any Shares or outstanding shares of Common Stock, except as brokers pursuant to
unsolicited orders and as otherwise provided in this Agreement.
We represent that we have not participated in any transaction prohibited by
the preceding paragraph and that we have at all times complied with the
provisions of Rule l0b-6 and l0b-6A of the Securities and Exchange Commission as
applicable to the offering of the Shares.
9. TERMINATION. The provisions of the last two paragraphs of
Section 4, the first sentence of Section 7, and all of Section 8 hereof, will
terminate at the close of business on the thirtieth (30th) day after the date of
the initial public offering of the Shares, unless sooner terminated as
hereinafter provided. You may terminate such provisions at any time by notice
to us to the effect that the offering provisions of this Agreement are
terminated.
10. EXPENSES AND SETTLEMENT. You may charge our account with any
transfer taxes on sales made by you of Shares purchased by us under the
Underwriting Agreement and with our proportionate share (based upon our
underwriting obligation) of all other expenses incurred by you under this
Agreement or in connection with the purchase, carrying, sale or distribution of
the Shares. The accounts hereunder will be settled as promptly as practicable
after the termination of the provisions referred to in Section 9 hereof, but you
may reserve such amount as you may deem advisable for additional expenses. Your
determination of the amount to be paid to or by us will be conclusive. You may
at any time make partial distributions of credit balances or call for payment of
debit balances. Any of our funds in your hands may be held with your general
funds without accountability for interest. Notwithstanding any settlement, we
will remain liable for any taxes on transfers for our account, and for our
proportionate share (based upon our underwriting obligation) of all expenses and
liabilities which may be incurred by or for the accounts of the Underwriters.
11. DEFAULT BY UNDERWRITERS. Default by one or more Underwriters
hereunder or under the Underwriting Agreement will not release the other
Underwriters from their obligations
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or affect the liability of any defaulting Underwriter to the other
Underwriters for damages resulting from such default. If one or more
Underwriters default under the Underwriting Agreement, you may arrange for
the purchase by others, including nondefaulting Underwriters, of Shares not
taken up by the defaulting Underwriter or Underwriters.
12. POSITION OF REPRESENTATIVE. You will be under no liability to us
for any act or omission except for obligations expressly assumed by you herein,
and no obligation on your part will be implied hereby or inferred herefrom. The
rights and liabilities of the Underwriters are several and not joint, and
nothing will constitute the Underwriters a partnership, association or separate
entity.
If for federal income tax purposes the Underwriters should be deemed to
constitute a partnership, then each Underwriter elects to be excluded from the
application of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code
of 1986, as amended. You, as Representative of the several Underwriters, are
authorized, in your discretion, to execute on behalf of the Underwriters such
evidence of such election as may be required by the Internal Revenue Service.
13. INDEMNIFICATION. We will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Act"), or
Section 20(a) of the Exchange Act, and reimburse your and their expenses, to the
extent and upon the terms upon which each Underwriter agrees to indemnity the
Company in the Underwriting Agreement.
14. CONTRIBUTION. Each Underwriter (including you) will pay upon
your request, as contribution, its proportionate share, based upon its
underwriting obligation, of any losses, claims, damages or liabilities, joint or
several, paid or incurred by any Underwriter to any person other than an
Underwriter, arising out of or based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any related Preliminary
Prospectus, or any other selling or advertising material approved by you for use
by the Underwriters in connection with the sale of the Shares, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading (other than
an untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by an Underwriter specifically for use therein); and will pay such
proportionate share of any legal or other expenses reasonably incurred by you or
with your consent in connection with investigating or defending any such loss,
claim, damage or liability, or any action in respect thereof. In determining the
amount of any Underwriter's obligation under this Section, appropriate
adjustment may be made by you to reflect any amounts received by one or more
Underwriters in respect of such claim from the Company pursuant to Section 6 of
the Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by us pursuant to this Section any loss, damage,
liability or expense which is incurred by us as a result of any such claim
asserted against us, and if such loss, claim, damage, liability or expense is
incurred by us subsequent to any payment by us pursuant to this Section,
appropriate provisions shall be made to effect such credit, by refund or
otherwise. If any such claim is asserted, you may take such action in
connection therewith as you deem necessary or desirable, including retention
of counsel for the
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Underwriters, and in your discretion separate counsel for any
particular Underwriter or group of Underwriters, and the fees and
disbursements of any counsel so retained by you shall be included in the
amount payable pursuant to this Section. In determining amounts payable
pursuant to this Section, any loss, claim, damage, liability or expense
incurred by any person controlling any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act which has been
incurred by reason of such control relationship shall be deemed to have been
incurred by such Underwriter. Any Underwriter may elect to retain at its own
expense its own counsel. You may settle or consent to the settlement of any
such claim, on advice of counsel retained by you, with the approval of a
majority in interest of the Underwriters. Whenever you receive notice of the
assertion of any claim to which the provisions of this Section would be
applicable, you will give prompt notice thereof to each Underwriter. You
will furnish each Underwriter with periodic reports, at such times as you
deem appropriate, as to the status of such claim and the action taken by you
in connection therewith. If any Underwriter or Underwriters default in their
obligation to make any payments under this Section, each nondefaulting
Underwriter shall be obligated to pay its proportionate share of all
defaulted payments, based upon such Underwriter's underwriting obligation as
related to the underwriting obligations of all nondefaulting Underwriters.
15. REPORTS AND BLUE SKY MATTERS. We authorize you to file with the
Securities and Exchange Commission and any other governmental agency any reports
required in connection with any transaction effected by you for our account
pursuant to this Agreement, and we will furnish any information needed for such
reports. You will not have any responsibility with respect to the right of any
Underwriter or other person to sell the Shares in any jurisdiction,
notwithstanding any information you may furnish in that connection.
16. MISCELLANEOUS. Any notice hereunder from you to us or from us to
you shall be deemed to have been duly given when sent by mail, telegram or
delivered in person, if to us, at the address stated in the Underwriters'
Questionnaire or telex constituting Questionnaire which we have furnished in
connection with this offering or, if to you, to R. J. Steichen & Company,
Midwest Plaza, Suite 1100, 801 Nicollet Mall, Minneapolis, Minnesota 55402.
We understand that you are members in good standing of the National
Association of Securities Dealers, Inc. ("NASD"). We hereby confirm that we are
either (i) a member in good standing of the NASD or (ii) a dealer with its
principal place of business located outside the United States, its territories
and its possessions and not registered as a broker or dealer under the Exchange
Act who agrees not to make any sales within the United States, its territories
or its possessions or to persons who are nationals thereof or residents therein.
We hereby agree to comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with respect to Free-Riding and
Withholding and Section 24 of Article III of the NASD's Rules of Fair Practice,
and, if we are a foreign dealer and not a member of the NASD, to comply with
such Interpretation with respect to Free-Riding and Withholding and the
provisions of Sections 8, 24, 25 (as such Section applies to foreign nonmembers)
and 36 of Article III of such Rules of Fair Practice as though we were a member
of the NASD. In connection with the sales and offers to sell Shares made by us
outside the United States (a) we will either furnish to each person to whom any
such sale or offer is made a copy of the then current Preliminary Prospectus or
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), as the case may be, or
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inform such person that such Preliminary Prospectus or Prospectus will be
available upon request and (b) we will furnish to each person to whom any
such sale or offer is made such Prospectus, advertisement or other offering
document containing information relating to the Shares or the Company as may
be required under the law of the jurisdiction in which such offer or sale is
made. Any prospectus, advertisement or other offering document furnished by
us to any such person in accordance with the preceding sentence and any such
additional offering material as we may furnish to any person (i) shall comply
in all respects with the law of the jurisdiction in which it is so furnished,
(ii) shall be prepared and so furnished at our sole risk and expense, and
(iii) shall not contain information relating to the Shares or the Company
which is inconsistent in any respect with the information contained in the
then current Preliminary Prospectus or in the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), as the case may be. We confirm that we will not make
sales of the Shares to discretionary accounts.
This instrument may be signed by the Underwriters in various counterparts
which together shall constitute one and the same agreement among all the
Underwriters and shall become effective at such time as all the Underwriters
shall have signed such counterparts and you shall have confirmed all such
counterparts.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
By: _________________________________________
Attorney-in-fact for the several
Underwriters listed in Schedule II to the
Underwriting Agreement
Confirmed as of the date first above written.
R. J. STEICHEN & COMPANY
As Representative
BY: ___________________________________
Managing Director
MPLS:80181-1
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