DeCrane Aircraft Holdings, Inc.
_____ Shares
Common Stock
(Par Value $.01)
_______________
UNDERWRITING AGREEMENT
New York, New York
February ___, 1996
SCHRODER WERTHEIM & CO. INCORPORATED
Dean Witter Reynolds Inc.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Schroder Wertheim & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Dear Sirs:
DeCrane Aircraft Holdings, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters"), for
whom you (the "Representatives"), are acting as representatives _________
shares of Common Stock, par value $.01 per share (the "Common Stock") of the
Company (said shares to be issued and sold by the Company being hereafter
called the "Firm Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to an additional 15% of Firm Securities
shares of Common Stock (the "Option Securities"), on the terms and for the
purposes set forth in Section 2 hereof. The Firm Securities and the Option
Securities are herein collectively referred to as the "Securities." Except
as may be expressly set forth below, any reference to you in this Agreement
shall be solely in your capacity as the Representatives.
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No. 33- ),
and as a part thereof a preliminary prospectus, in respect of the
Securities, has been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered to you and, with the
exception of exhibits to the registration statement, to you for each of
the other Underwriters; if such registration statement has not become
effective, an amendment (the "Final Amendment") to such registration
statement, including a form of final prospectus, necessary to permit
such registration statement to become effective, will promptly be filed
by the Company with the Commission; if such registration statement has
become effective and any post-effective amendment to such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, which amendment or amendments shall be in
form acceptable to you, the most recent such amendment has been declared
effective by the Commission; if such registration statement has become
effective, a final prospectus (the "Rule 430A Prospectus") relating to
the Securities containing information permitted to be omitted at the
time of effectiveness by Rule 430A of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"),
will promptly be filed by the Company pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act (any preliminary
prospectus filed as part of such registration statement being herein
called a "Preliminary Prospectus," such registration statement as
amended at the time that it becomes or became effective, or, if
applicable, as amended at the time the most recent post-effective
amendment to such registration statement filed with the Commission prior
to the execution and delivery of this Agreement became effective (the
"Effective Date"), including all exhibits thereto and all information
deemed to be a part thereof at such time pursuant to Rule 430A of the
rules and regulations of the Commission under the Act, being herein
called the "Registration Statement" and the final prospectus relating to
the Securities in the form first filed pursuant to Rule 424(b)(1) or (4)
of the rules and regulations of the Commission under the Act or, if no
such filing is required, the form of final prospectus included in the
Registration Statement, being herein called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did 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 the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through you expressly for use therein;
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(c) On the Effective Date and the date the Prospectus is filed
with the Commission, and when any further amendment or supplements
thereto become effective or are filed with the Commission, as the case
may be, the Registration Statement, the Prospectus and such amendment or
supplements did and will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not 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;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through you expressly for use therein;
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and to conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification (except where the failure
to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole); and each of the
Company's subsidiaries (other than Tri-Star Technologies ("TST")) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, and, in
the case of TST, has been duly formed and is validly existing as a
partnership in good standing under the laws of its jurisdiction of
formation, with power and authority (corporate and other) to own its
properties and to conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation or, in the case of
TST, as a foreign partnership, for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns
or leases property, or conducts any business, so as to require such
qualification (except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
business affairs or prospects of the Company and its subsidiaries, taken
as a whole);
(e) Except for TST, all the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and, except as otherwise set
forth in the Prospectus, are owned by the Company free and clear of all
liens, pledges, encumbrances, equities, security interests, or claims;
and there are no outstanding options, warrants or other rights calling
for the issuance of, and there are no commitments, plans or arrangements
to issue, any shares of capital stock of any subsidiary or any security
convertible or exchangeable or exercisable for capital stock of any
subsidiary; except for the shares of stock of each subsidiary owned by
the Company, neither the Company nor any subsidiary owns, directly or
indirectly, any shares of capital stock of any corporation or has any
equity interest in any firm, partnership, joint venture, association or
other entity; [Pledge of stock under new credit facility]
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(f) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by the Company of its obligations under this
Agreement have been duly and validly authorized by all requisite
corporate action of the Company; and this Agreement constitutes the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(g) (i) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which loss or interference is material to the Company
and its subsidiaries, taken as a whole; and, (ii) since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, there has not been, and prior to the Time of Delivery
(as defined in Section 4 hereof); 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, taken as a whole, whether or not arising in the ordinary
course of business; (iii) there have been no transactions entered into
by the Company or by any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries, taken as a whole; (iv) there has been no
dividend or distribution of any kind declared or paid or made by the
Company on any class of its capital stock; and (v) neither the Company
nor any of its subsidiaries has incurred any liabilities or obligations,
direct or contingent, which are material to the Company and its
subsidiaries, taken as a whole;
(h) (i) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described or
contemplated by the Prospectus, or such as do not 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 and its
subsidiaries, and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such real property and buildings by the Company and its subsidiaries,
the interests of the Company or any of its subsidiaries in such leases
are free and clear of all material liens, encumbrances and defects,
except as disclosed in the Prospectus, and the Company and its
subsidiaries are in compliance in all material respects with the terms
and conditions of such leases, and (ii) (A) except for such assets and
facilities as are immaterial in the aggregate to the business of the
Company and its subsidiaries, all tangible assets and facilities of the
Company and its subsidiaries are adequate, in the reasonable opinion of
the Company, for the use to which they are being put or would be put in
the ordinary course of business, (B) the operation and use of such
assets and facilities is in compliance with all municipal, county, state
and federal laws, regulations, ordinances, standards, orders and other
regulations where
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the failure to comply therewith could 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, taken as a
whole;
(i) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement, and all the
issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, are free of
any preemptive rights, rights of first refusal or similar rights, were
issued and sold in compliance with the applicable Federal and state
securities laws and conform in all material respects to the description
in the Prospectus; except as described in the Prospectus, there are no
outstanding options warrants or other rights calling for the issuance
of, and there are no commitments, plans or arrangements to issue, any
shares of capital stock of the Company or any security convertible or
exchangeable or exercisable for capital stock of the Company; there are
no holders of securities of the Company who, by reasons of the filing of
the Registration Statement have the right (and have not waived such
right) to request the Company to include in the Registration Statement
securities owned by them;
(j) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable, and will
conform in all material respects to the description thereof in the
Prospectus and will be quoted on the Nasdaq National Market as of the
Effective Date;
(k) The performance of this Agreement, the consummation of the
transactions herein contemplated and the issue and sale of the
Securities and the compliance by the Company with all the provisions of
this Agreement will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge, claim, or
encumbrance upon, any of the property or assets of the Company or any of
its subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or the By-laws, in each case as amended [and restated] to
the date hereof, of the Company or any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court
or governmental agency or body is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated by
this Agreement, except the registration under the Act of the Securities,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under
-5-
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(l) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries or any of their respective
officers or directors is a party or of which any property of the Company
or any of its subsidiaries is the subject, other than litigation or
proceedings incident to the business conducted by the Company and its
subsidiaries which will not individually or in the aggregate have a
material adverse effect on the current or future financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened or contemplated by others; and
neither the Company nor any of its subsidiaries is involved in any labor
dispute, nor, to the Company's knowledge, is any labor dispute
threatened;
(m) The Company and its subsidiaries have such certificates,
authorities, licenses, permits and other approvals or authorizations of
and from governmental or regulatory authorities (including, without
limitation, the Federal Aviation Administration (the "FAA")
(collectively, "Permits") as are necessary under applicable law to
conduct their respective businesses in the manner now being conducted
and as described in the Prospectus; neither the Company nor any of its
subsidiaries has received any notice of proceedings or has any reason to
believe proceedings are pending relating to the revocation or
modification of any such Permits; and the Company and its subsidiaries
have fulfilled and performed all of their respective obligations with
respect to such Permits, and no event has occurred which allows, or
after notice or lapse of time or both would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such permits;
(n) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Registration
Statement and the Prospectus, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder;
(o) The consolidated financial statements and schedules of the
Company and its subsidiaries included in the Registration Statement and
the Prospectus present fairly the financial condition, the results of
operations and the cash flows of the Company and its subsidiaries as of
the dates and for the periods therein specified in conformity with
generally accepted accounting principles consistently applied throughout
the periods involved, except as otherwise stated therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus is accurately presented and,
to the extent such information and data is derived from the financial
statements and books and records of the Company and its subsidiaries, is
prepared on a basis consistent with such financial statements and the
books and records of the Company and its subsidiaries; The pro forma
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financial information included in the Registration Statement and the
Prospectus have been properly compiled and comply in form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X of the Commission; no other financial statements
or schedules are required to be included in the Registration Statement
and the Prospectus;
(p) There are no statutes or governmental regulations, or any
contracts or other documents that are required to be described in or
filed as exhibits to the Registration Statement which are not described
therein or filed as exhibits thereto; and all such contracts to which
the Company or any subsidiary is a party have been duly authorized,
executed and delivered by the Company or such subsidiary, constitute
legal, valid and binding agreements of the Company or such subsidiary
and are enforceable against the Company or subsidiary in accordance with
the terms thereof;
(q) The Company and its subsidiaries own or possess adequate
patent rights or licenses or other rights to use patent rights,
inventions, trademarks, service marks, trade names, copyrights,
technology and know-how necessary to conduct the general business now or
proposed to be operated by them as described in the Prospectus; neither
the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect
to any patent, patent rights, inventions, trademarks, service marks,
trade names, copyrights, technology or know-how which, singly or in the
aggregate, could materially adversely affect the business, operations,
financial condition, income or business prospects of the Company and its
subsidiaries considered as a whole; and, the discoveries, inventions,
products or processes of the Company and its subsidiaries referred to in
the Prospectus do not, to the Company's knowledge, infringe or conflict
with any patent or right of any third party, or any discovery,
invention, product or process which is the subject of a patent
application filed by any third party, known to the Company;
(r) Neither the Company nor any of and its subsidiaries are in
violation of any term or provision of its Certificate of Incorporation,
By-Laws, Certificate of Limited Partnership or Partnership Agreement (or
similar corporate constituent documents), in each case as amended to the
date hereof, or any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or any of its subsidiaries, or
of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries;
(s) No default exists, and no event has occurred which with notice
or lapse of time, or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, bank loan or credit agreement, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or their respective
properties is bound or may be affected in any material adverse respect
-7-
with regard to the property, business or operations of the Company and
its subsidiaries;
(t) The Company and its subsidiaries have timely filed all
necessary tax returns and notices and have paid all federal, state,
county, local and foreign taxes of any nature whatsoever for all tax
years through December 31, 1996, to the extent such taxes have become
due. The Company has no knowledge, or any reasonable grounds to know,
of any tax deficiencies which would have a material adverse effect on
the Company or any of its subsidiaries; the Company and its subsidiaries
have paid all taxes which have become due, whether pursuant to any
assessments, or otherwise, and there is no further liability (whether or
not disclosed on such returns) or assessments for any such taxes, and no
interest or penalties accrued or accruing with respect thereto, except
as may be set forth or adequately reserved for in the financial
statements included in the Registration Statement; the amounts currently
set up as provisions for taxes or otherwise by the Company and its
subsidiaries on their books and records are sufficient for the payment
of all their unpaid federal, foreign, state, county and local taxes
accrued through the dates as of which they speak, and for which the
Company and its subsidiaries may be liable in their own right, or as a
transferee of the assets of, or as successor to any other corporation,
association, partnership, joint venture or other entity;
(u) The Company will not, during the period of 180 days after the
date hereof except pursuant to this Agreement, offer, sell, contract to
sell or otherwise dispose of any capital stock of the Company (or
securities convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, without the prior written consent of
Schroder Wertheim & Co. Incorporated, except for grants of stock options
under the Company's Amended and Restated 1993 Share Incentive Plan (the
"1993 Plan") or pursuant to the terms of convertible securities of the
Company outstanding on the date hereof; [WARRANTS]
(v) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences;
(w) None of the Company or its subsidiaries, or its officers,
directors, employees or agents has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity, or made any unlawful payment of funds of
the Company or any subsidiary or received or retained any funds in
violation of any law, rule or regulation;
-8-
(x) None of the Company or its subsidiaries, or its officers,
directors, employees or agents have taken or will take, directly or
indirectly, any action designed to or which has constituted or that
might be reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities;
(y) (i) The Company and each subsidiary maintains insurance
covering their properties, operations, personnel and business, (ii) such
insurance insures against such losses and risks to an extent which is
adequate in accordance with customary industry practice to protect the
Company and its subsidiaries and their businesses and (iii) all such
insurance is outstanding and duly in force on the date hereof;
(z) The Directors' and Officers' Questionnaires delivered by the
Company to the Underwriters on or prior to the Effective Date are true
and correct in all material respects;
(aa) None of the Company or its subsidiaries is an "investment
company," or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company Act of
1935, as amended, the Federal Power Act, the Interstate Commerce Act or
to any federal or state statute or regulation limiting its respective
ability to incur indebtedness for borrowed money, except statutes or
regulations applicable generally to business corporations incorporated
or doing business in the various states in which the Company and its
subsidiaries do business.
(ab) (i) Neither the Company nor any of its subsidiaries is
engaged in any unfair labor practice which would have a material adverse
effect on the Company and its subsidiaries, taken as a whole; (ii) there
is (A) no unfair labor practice complaint pending or threatened against
the Company or any of its subsidiaries before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out
of or under collective bargaining agreements is pending or, threatened,
(B) no strike, labor dispute, slowdown or stoppage is pending or
threatened against the Company or any of its subsidiaries and (C) (i) no
union representation question existing with respect to the employees of
the Company or any of its subsidiaries and no union organizing
activities are taking place, and (ii) there has been no violation of any
federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees, of any applicable wage or hour laws, nor
any provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or the rules and regulations promulgated thereunder;
(ac) (i) Each of the Company and its subsidiaries has obtained all
permits, licenses and other authorizations that are required under all
applicable Federal, State, Local and Foreign environmental laws,
including but not limited to the Federal Water Pollution Control Act
(33 U.S.C. Section 1251 ET SEQ.), Resource Conservation & Recovery Act
(42 U.S.C. Section 6901 ET SEQ.), Safe Drinking Water Act (21 U.S.C.
Section 349, 42 U.S.C. Sections 201, 300f), Toxic
-9-
Substances Control Act (15 U.S.C. Section 2601 ET SEQ.),
Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 ET SEQ.), the appropriate laws of any state in which the
Company or any of its subsidiaries owns or leases real property and any
other laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land), or
otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes or under any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated
or approved thereunder (collectively, the "Environmental Laws"), except as
otherwise set forth in the Prospectus or to the extent failure to have
any such permit, license or authorization, individually, or in the
aggregate, does 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, taken as a whole;
(ii) except as described in the Prospectus, each of the Company and its
subsidiaries is in compliance with all terms and conditions of any
required permits, licenses and authorizations, and is also in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws, except to the extent failure to
comply 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, taken as a whole; and (iii)
except as disclosed in the Prospectus, the Company and its susidiaries
do not have any material liabilities arising under Environmental Laws;
(ad) (i) There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions, or plans
relating to the business as presently being conducted by the Company or
its subsidiaries that interfere with or prevent compliance or continued
compliance with the Environmental Laws, or which would be reasonably
likely to give rise to any legal liability (whether statutory or common
law) or otherwise would be reasonably likely to form the basis of any
claim, action, demand, suit, proceeding, hearing, notice of violation,
study, investigation, remediation or cleanup based on or related to the
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the emission, discharge,
release into the workplace, the community or the environment of any
pollutant, contaminant, chemical or industrial, toxic, or hazardous
substance or waste, except for any liabilities or any claims, demands or
other actions specified above that will not individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and (ii) except as previously disclosed
to the Underwriters or their counsel, no asbestos-containing material
and no underground or above-ground storage tanks are located on property
owned or leased by the Company or its subsidiaries and none have been
previously removed or filled by the Company or its subsidiaries or, to
the best of their knowledge, any predecessor of the Company or its
subsidiaries; and
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(ae) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K promulgated under the Securities
Act.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of
_________ Firm Securities, and each of the Underwriters agrees to purchase
from the Company, at a purchase price of $__________ per share, the
respective aggregate number of Firm Securities determined in the manner set
forth below. The obligation of each Underwriter to the Company shall be to
purchase that portion of the number of shares of Common Stock to be sold by
the Company pursuant to this Agreement as the number of Firm Securities set
forth opposite the name of such Underwriter on Schedule I bears to the total
number of Firm Securities to be purchased by the Underwriters pursuant to
this Agreement, in each case adjusted by you such that no Underwriter shall
be obligated to purchase Firm Securities other than in 100 share amounts. In
making this Agreement, each Underwriter is contracting severally and not
jointly.
In addition, subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters, as required (for the
sole purpose of covering over-allotments in the sale of the Firm Securities),
up to _______ Option Securities at the purchase price per share of the Firm
Securities being sold by the Company as stated in the preceding paragraph.
The right to purchase the Option Securities may be exercised by your giving
48 hours' prior written or telephonic notice (subsequently confirmed in
writing) to the Company of your determination to purchase all or a portion of
the Option Securities. Such notice may be given at any time within a period
of 30 days following the date of this Agreement. Option Securities shall be
purchased severally for the account of each Underwriter in proportion to the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto. No Option Securities shall be delivered to or for the
accounts of the Underwriters unless the Firm Securities shall be
simultaneously delivered or shall theretofore have been delivered as herein
provided. The respective purchase obligations of each Underwriter shall be
adjusted by you so that no Underwriter shall be obligated to purchase Option
Securities other than in 100 share amounts. The Underwriters may cancel any
purchase of Option Securities at any time prior to the Option Securities
Delivery Date (as defined in Section 4 hereof) by giving written notice of
such cancellation to the Company.
3. The Underwriters propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by certified
or official bank check or checks, payable in New York Clearing House funds,
to the order of the Company, for the purchase price of the Firm Securities
being sold by the Company at the office of Schroder Wertheim & Co.
Incorporated, Equitable Center, 787 Seventh Avenue, New York, New York, at
9:30 A.M.,
-11-
New York City time, on __________ __, 199_, or at such other time, date and
place as you and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery."
Certificates in definitive form for the Option Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price thereof by certified
or official bank check or checks, payable in New York Clearing House funds,
to the order of the Company, for the purchase price of the Option Securities,
in New York, New York, at such time and on such date (not earlier than the
Time of Delivery nor later than ten business days after giving of the notice
delivered by you to the Company with reference thereto) and in such
denominations and registered in such names as shall be specified in the
notice delivered by you to the Company with respect to the purchase of such
Option Securities. The date and time of such delivery and payment are herein
sometimes referred to as the "Option Securities Delivery Date." The
obligations of the Underwriters shall be subject, in their discretion, to the
condition that there shall be delivered to the Underwriters on the Option
Securities Delivery Date opinions and certificates, dated such Option
Securities Delivery Date, referring to the Option Securities, instead of the
Firm Securities, but otherwise to the same effect as those required to be
delivered at the Time of Delivery pursuant to Section 7(d), 7(e), 7(f) and
7(i).
Certificates for the Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to
the Time of Delivery and the Option Securities Delivery Date, respectively.
Such certificates will be made available for checking and packaging in New
York, New York, at least 24 hours prior to the Time of Delivery and Option
Securities Delivery Date.
5. The Company covenants and agrees with each of the Underwriters:
(a) If the Registration Statement has not become effective, to
file promptly the Final Amendment with the Commission and use its best
efforts to cause the Registration Statement to become effective; if the
Registration Statement has become effective, to file promptly the Rule
430A Prospectus with the Commission; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you after reasonable notice thereof; to advise you,
promptly after it receives notice thereof of the time when the
Registration Statement, or any amendment thereto, or any amended
Registration Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or Prospectus
or for additional information; and in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
-12-
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain withdrawal of
such order;
(b) Promptly from time to time to take such action as you may
request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish each of the Representatives and counsel for the
Underwriters, without charge, signed copies of the registration
statement originally filed with respect to the Securities and each
amendment thereto (in each case including all exhibits thereto) and to
each other Underwriter, without charge, a conformed copy of such
registration statement and each amendment thereto (in each case without
exhibits thereto) and, so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many copies of
each Preliminary Prospectus, the Prospectus and all amendments or
supplements thereto as you may from time to time reasonably request. If
at any time when a prospectus is required to be delivered under the Act
an event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or if for
any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Act, the Company will forthwith
prepare and, subject to the provisions of Section 5(a) hereof, file with
the Commission an appropriate supplement or amendment thereto, and will
furnish to each Underwriter and to any dealer in securities, without
charge, as many copies as you may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance in
accordance with the requirements of Section 10 of the Act;
(d) To make generally available to its stockholders as soon as
practicable, but in any event not later than 45 days after the close of
the period covered thereby, an earnings statement in form complying with
the provisions of Section 11(a) of the Act covering a period of 12
consecutive months beginning not later than the first day of the
Company's fiscal quarter next following the Effective Date;
(e) To file promptly all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") subsequent to the
Effective Date and during any period when the Prospectus is required to
be delivered;
-13-
(f) For a period of five years from the Effective Date, to furnish
to its stockholders after the end of each fiscal year an annual report
(including a consolidated balance sheet and statements of income, cash
flow and stockholders' equity of the Company and its subsidiaries
certified by independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the Effective Date),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the Effective Date, to
furnish to you copies of all reports or other communications (financial
or other) furnished to its stockholders, and deliver to you (i) as soon
as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request
in connection with your obligations hereunder;
(h) To apply the net proceeds from the sale of the Securities in
the manner set forth in the Prospectus under the caption "Use of
Proceeds";
(i) That it will not, and will cause its subsidiaries, officers,
directors, employees, agents and affiliates not to, take, directly or
indirectly, any action designed to cause or result in, or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities;
(j) That prior to the Time of Delivery there will not be any
change in the capital stock or material change in the short-term debt or
long-term debt of the Company or any of its subsidiaries, or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company or any of its subsidiaries, otherwise than as
set forth or contemplated in the Prospectus;
(k) That it will not, during the period of 180 days after the date
hereof (other than pursuant to this Agreement), offer, sell, contract to
sell or otherwise dispose of any capital stock of the Company (or
securities convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, without the prior written consent of
Schroder Wertheim & Co. Incorporated, except for grants of stock options
under the Company's Stock Option Plan [; [WARRANTS]
(l) That it has caused the Securities to be included for quotation
on the Nasdaq National Market as of the Effective Date; and
-14-
(m) To file with the Commission such reports on Form SR as may
be required pursuant to Rule 463 under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid: i) the fees, disbursements and
expenses of counsel and accountants for the Company, and all other expenses,
in connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and amendments and supplements thereto and the
furnishing of copies thereof, including charges for mailing, air freight and
delivery and counting and packaging thereof and of any Preliminary Prospectus
and related offering documents to the Underwriters and dealers; ii) the cost
of printing this Agreement, the Agreement Among Underwriters, the Selling
Agreement, communications with the Underwriters and selling group and the
Preliminary and Supplemental Blue Sky Memoranda and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
iii) all expenses in connection with the qualification of the Securities for
offering and sale under securities laws as provided in Section 5(b) hereof,
including filing and registration fees and the fees, disbursements and
expenses for counsel for the Underwriters in connection with such
qualification and in connection with Blue Sky surveys or similar advice with
respect to sales; iv) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing
any required review by the National Association of Securities Dealers, Inc.
of the terms of the sale of the Securities; v) all fees and expenses in
connection with quotation of the Securities on the Nasdaq National Market;
and vi) all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically provided for in
this Section 6, including the fees of the Company's Transfer Agent and
Registrar, the cost of any stock issue or transfer taxes on sale of the
Securities to the Underwriters, the cost of the Company's personnel and other
internal costs, the cost of printing and engraving the certificates
representing the Securities and all expenses and taxes incident to the sale
and delivery of the Securities to be sold by the Company to the Underwriters
hereunder. It is understood, however, that, except as provided in this
Section, Section 8 and Section 11 hereof, the Underwriters will pay all their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties
and other statements of the Company herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company shall have
performed all its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Registration Statement shall have become effective, and
you shall have received notice thereof not later than 10:00 P.M., New
York City time, on the date of execution of this Agreement, or at such
other time as you and the Company may agree; if required, the Prospectus
shall have been filed with the Commission in the manner and within the
time period required by Rule 424(b); no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the
-15-
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) All corporate proceedings and related legal and other matters
in connection with the organization of the Company and the registration,
authorization, issue, sale and delivery of the Securities shall have
been reasonably satisfactory to Milbank, Tweed, Hadley & McCloy
("Milbank"), counsel to the Underwriters, and Milbank shall have been
timely furnished with such papers and information as they may reasonably
have requested to enable them to pass upon the matters referred to in
this subsection;
(c) You shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto,
contains an untrue statement of fact or omits to state a fact which in
your judgment is in either case material and, in the case of an
omission, is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(d) Spolin & Silverman, counsel to the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
i) The Company has been duly and validly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware, and is qualified to do business and is in
good standing in each jurisdiction in which its ownership or
leasing of properties requires such qualification or the conduct of
its business requires such qualification (except where the failure
to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the business affairs or
prospects of the Company and its subsidiaries, taken as a whole);
and the Company has all necessary corporate power and all material
governmental authorizations, permits and approvals required to own,
lease and operate its properties and conduct its business as
described in the Prospectus;
ii) Each of the Company's subsidiaries (other than TST) has
been duly and validly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation and, in the case of TST, has been duly formed and
is validly existing as a partnership in good standing under the
laws of its jurisdiction of formation, and is qualified to do
business and is in good standing in each jurisdiction in which its
ownership or leasing of properties requires such qualification or
the conduct of its business requires such qualification (except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the business
affairs or prospects of the Company and its subsidiaries, taken as
a whole); and each of the Company's subsidiaries has all necessary
power (corporate or otherwise) and all material governmental
-16-
authorizations, permits and approvals required to own, lease and
operate its properties and to conduct its business as described in
the Prospectus;
iii) Except for TST, all the outstanding shares of capital
stock of each of the Company's subsidiaries, and, in the case of
TST, all partnership interests have been duly authorized and are
validly issued and outstanding, are fully paid and non-assessable
and are owned by the Company of record and to the best knowledge of
such counsel, (A) beneficially and (B) free and clear of all liens,
pledges, encumbrances, equities, security interests or claims of
any nature whatsoever; and neither the Company nor any of its
subsidiaries has granted any outstanding options, warrants or
commitments with respect to any shares of its capital stock, or, in
the case of TST, any partnership interests, whether issued or
unissued, except as otherwise described in the Prospectus;
iv) The Company has an authorized capitalization as set forth
in the Registration Statement and all the issued shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; are free of any
preemptive rights, and were issued and sold in compliance with all
applicable Federal and state securities laws; except as described
in the Prospectus, to the knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the
issuance of, and there are no commitments, plans or arrangements to
issue, any shares of capital stock of the Company; the Securities
being sold by the Company have been duly and validly authorized
and, when duly countersigned by the Company's Transfer Agent and
Registrar and issued, delivered and paid for in accordance with the
provisions of the Registration Statement and this Agreement, will
be duly and validly issued, fully paid and non-assessable; the
Securities conform to the description thereof in the Prospectus;
the Securities have been duly authorized for quotation on the
Nasdaq National Market, as of the Effective Date; and the
certificates for the Securities as are in valid and sufficient
form;
v) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries or any of their respective
officers or directors is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
resolved against the Company or any of its subsidiaries or any of
their respective officers or directors, individually, or to the
extent involving related claims or issues, in the aggregate, is of
a character required to be disclosed in the Prospectus which has
not been properly disclosed therein;
vi) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable in accordance with its terms,
except as enforceability
-17-
of the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
and except as enforceability of those provisions relating to indemnity
may be limited by the Federal securities laws and principles of public
policy;
vii) The Company has full corporate power and authority to
execute, deliver and perform this Agreement, and the execution,
delivery and performance of this Agreement, the consummation of the
transactions herein contemplated and the issue and sale of the
Securities and the compliance by the Company with all the
provisions of this Agreement will not conflict with, or result in a
breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon, any of the property or assets of
the Company or any of its subsidiaries pursuant to, the terms of
any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation, the By-Laws, the
Certificate of Limited Partnership or the Partnership Agreement in
each case as amended [and restated], of the Company or any of its
subsidiaries, or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
viii) No consent, approval, authorization, order,
registration or qualification of or with any court or any
regulatory authority or other governmental body is required for the
issue and sale of the Securities or the consummation of the other
transactions contemplated by this Agreement, except such as have
been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Under-writers;
ix) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is currently in violation of
its Certificate of Incorporation, the By-laws, the Certificate of
Limited Partnership or the Partnership Agreement or in default
under, any indenture, mortgage, deed of trust, lease, bank loan or
credit agreement or any other agreement or instrument of which such
counsel has knowledge to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
property may be bound or affected (in any respect that is material
in light of the financial condition of the Company and its
subsidiaries, taken as a whole);
-18-
x) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any Securities pursuant to the Company's Certificate of
Incorporation or By-Laws, in each case as amended to the date
hereof, or any agreement or other instrument known to such counsel;
and no holders of securities of the Company have rights to the
registration thereof under the Registration Statement or, if any
such holders have such rights, such holders have waived such rights;
xi) To the extent summarized therein, all contracts and
agreements summarized in the Registration Statement and the
Prospectus are fairly summarized therein, conform in all material
respects to the descriptions thereof contained therein, and, to the
extent such contracts or agreements or any other material
agreements are required under the Act or the rules and regulations
thereunder to be filed, as exhibits to the Registration Statement,
they are so filed; and such counsel does not know of any contracts
or other documents required to be summarized or disclosed in the
Prospectus or to be so filed as an exhibit to the Registration
Statement, which have not been so summarized or disclosed, or so
filed;
xii) All descriptions in the Prospectus of statutes,
regulations (including, without limitation, those of the FAA) or
legal or governmental proceedings are fair summaries thereof and
fairly present the information required to be shown with respect to
such matters;
xiii) Nothing has come to such counsel's attention to give
such counsel reason to believe that any of the representations and
warranties of the Company contained in this Agreement or in any
certificate or document contemplated under this Agreement to be
delivered are not true or correct or that any of the covenants and
agreements herein contained to be performed on the part of the
Company or any of the conditions herein contained, or set forth in
the Registration Statement and the Prospectus, to be fulfilled or
complied with by the Company have not been or will not be duly and
timely performed, fulfilled or complied with; and
xiv) The Registration Statement has become effective under the
Act, the Prospectus has been filed in accordance with Rule 424(b)
of the rules and regulations of the Commission under the Act,
including the applicable time periods set forth therein, or such
filing is not required and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act, and the
Registration Statement, the Prospectus and each amendment or
supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder;
it being understood that such counsel need express no
-19-
opinion as to the financial statements and schedules or other
financial data contained in the Registration Statement or the
Prospectus.
Such counsel shall also state that nothing has come to such
counsel's attention that would lead such counsel to believe that
either the Registration Statement or any amendment or supplement
thereto, at the time such Registration Statement or amendment or
supplement became effective and as of the Time of Delivery, or the
Prospectus or any amendment or supplement thereto, as of its date
and as of the Time of Delivery, contains or contained any untrue
statement of material fact or omitted or omits 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.
In rendering their opinions set forth in Section 7(d) above,
such counsel may rely, to the extent deemed advisable by such
counsel, (a) as to factual matters, upon certificates of public
officials and officers of the Company, and (b) as to the laws of
any jurisdiction other than the United States and jurisdictions in
which they are admitted, on opinions of counsel (provided, however,
that you shall have received a copy of each of such opinions which
shall be dated the Time of Delivery, addressed to you or otherwise
authorizing you to rely thereon, and Spolin & Silverman in its
opinion to you delivered pursuant to this subsection, shall state
that such counsel are satisfactory to them and Spolin & Silverman
has no reason to believe that the Underwriters and they are not
justified to so rely);
(e) Milbank, counsel to the Underwriters, shall have furnished to
you their written opinion or opinions, dated the Time of Delivery, in
form and substance satisfactory to you, with respect to the
incorporation of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(f) At the time this Agreement is executed and also at the Time of
Delivery, Price Waterhouse LLP shall have furnished to you a letter or
letters, dated the date of this Agreement and the Time of Delivery, in
form and substance satisfactory to you, to the effect, that:
i) They are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
ii) In their opinion the consolidated financial statements of
the Company and its subsidiaries (including the related schedules
and notes) included in the Registration Statement and Prospectus
and covered by their reports included therein comply as to form in
all material respects with the
-20-
applicable accounting requirements of the Act and the published
rules and regulations thereunder;
iii) On the basis of specified procedures as of a specified
date not more than five days prior to the date of their letter
(which procedures do not constitute an examination made in
accordance with generally accepted auditing standards), consisting
of a reading of the latest available unaudited interim consolidated
financial statements of the Company and its subsidiaries, a reading
of the latest available minutes of any meeting of the Board of
Directors and stockholders of the Company and its subsidiaries
since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its
subsidiaries who have responsibility for financial and accounting
matters, and such other procedures or inquiries as are specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its subsidiaries included in the
Prospectus do not comply in form in all material respects with
the applicable accounting requirements of the Act and the
rules and regulations promulgated thereunder or are not
presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included
in the Registration Statement and the Prospectus;
(B) as of a specified date not more than five days prior
to the date of their letter, there was any change in the
capital stock, or the long-term debt or short-term debt of the
Company and its subsidiaries on a consolidated basis, or any
decrease in total assets, net current assets, net assets or
stockholders' equity or other items specified by the
Representatives, of the Company and its subsidiaries on a
consolidated basis, each as compared with the amounts shown on
the December 31, 1996 balance sheet included in the
Registration Statement and the Prospectus, except in each case
for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or such other changes,
decreases or increases which are described in their letter and
which do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the
Registration Statement; and
(C) for the period from January 1, 1997 to a specified
date not more than five days prior to the date of such letter,
there was any decrease, as compared with the corresponding
period of the preceding fiscal year, in the following
consolidated amounts: net sales, income from operations,
income before provision for income taxes, net income
-21-
or net income per share of the Company and its subsidiaries,
except in all instances for decreases which the Registration
Statement discloses have occurred or may occur; or such other
decreases which are described in their letter and which do
not, in the sole judgment of the Representatives, make it
impractical or inadvisable to proceed with the purchase and
delivery of the Securities as contemplated by the Registration
Statement; and
iv) in addition to the examination referred to in their
reports included in the Registration Statement and the Prospectus
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 specified by the Representatives, which are derived
from the general accounting records of the Company and its
subsidiaries which appear in the Prospectus, or in Part II of, or
in exhibits and schedules to, the Registration Statement, and have
compared such amounts and financial information with the accounting
records of the Company and its subsidiaries and have found them to
be in agreement and have proved the mathematical accuracy of
certain specified percentages.
v) On the basis of a reading of the pro forma consolidated
financial statements included in the Registration Statement and the
Prospectus, carrying out certain specified procedures that would
not necessarily reveal matters of significance with respect to the
comments set forth in this clause (v), inquiries of certain
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma consolidated financial
statements, nothing came to their attention that caused them to
believe that the pro forma consolidated financial statements do not
comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
(g) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree; and since the respective dates as of which information
is given in the Prospectus, there shall not have been any change in the
capital stock (other than shares issued pursuant to the exercise of
options issued pursuant to the 1993 Plan or pursuant to the terms of
convertible securities of the Company outstanding on the date hereof) or
short-term debt or long-term debt of the Company or any of its
subsidiaries nor any change or any development involving a prospective
change, in or affecting the general affairs, management, financial
-22-
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case is in your judgment so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on
the terms and in the manner contemplated in the Prospectus;
(h) Between the date hereof and the Time of Delivery there shall
have been no declaration of war by the Government of the United States;
at the Time of Delivery there shall not have occurred any material
adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities
or to enforce contracts for the resale of Securities and no event shall
have occurred resulting in (i) trading in securities generally on the
New York Stock Exchange or in the Common Stock on the principal
securities exchange or market in which the Common Stock is listed or
quoted being suspended or limited or minimum or maximum prices being
generally established on such exchanges or market, or (ii) additional
material governmental restrictions, not in force on the date of this
Agreement, being imposed upon trading in securities generally by the New
York Stock Exchange or in the Common Stock on the principal securities
exchange or market in which the Common Stock is listed or quoted or by
order of the Commission or any court or other governmental authority, or
(iii) a general banking moratorium being declared by either Federal or
New York authorities;
(i) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates signed by the chief executive
officer and the chief financial officer, on behalf of the Company,
satisfactory to you as to such matters as you may reasonably request and
as to (i) the accuracy of the Company's representations and warranties
herein at and as of the Time of Delivery and (ii) the performance by the
Company of all its obligations hereunder to be performed at or prior to
the Time of Delivery; the Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates signed by the
chief executive officer and the chief financial officer, on behalf of
the Company, as to (i) the fact that they have carefully examined the
Registration Statement and Prospectus and, (a) as of the Effective Date,
the statements contained in the Registration Statement and the
Prospectus were true and correct and neither the Registration Statement
nor the Prospectus omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (b) since the Effective Date, no event has occurred that
is required by the Act or the rules and regulations of the Commission
thereunder to be set forth in an amendment of, or a supplement to, the
Prospectus that has not been set forth in such an amendment or
supplement; and (ii) the matters set forth in subsection (a) of this
Section 7;
(j) Each director, officer and five percent stockholder of the
Company shall have delivered to you an agreement not to offer, sell,
contract to sell or otherwise
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dispose of any shares of capital stock of the Company (or securities
convertible into, or exchangeable for, capital stock of the Company),
directly or indirectly, for a period of 180 days after the date of this
Agreement, without the prior written consent of Schroder Wertheim & Co.
Incorporated; and
(k) The Company shall have delivered to you evidence that the
Securities have been authorized for quotation on the Nasdaq National
Market as of the Effective Date.
8. (a) The Company will indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or in any Blue Sky application or other document executed by the
Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all the Securities under the security laws thereof or filed
with the Commission or any securities association or securities exchange
(each, an "Application"), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements made therein not misleading, or (ii) any untrue statement or
alleged untrue statement made by the Company in Section 1 of this Agreement,
or (iii) the employment by the Company of any device, scheme or artifice to
defraud, or the engaging by the Company in any act, practice or course of
business which operates or would operate as a fraud or deceit, or any
conspiracy with respect thereto, in which the Company shall participate, in
connection with the issuance and sale of any of the Securities, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating, preparing to
defend, defending or appearing as a third-party witness in connection with
any such action or claim; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission relating to an Underwriter
made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance
upon and in conformity with written information furnished to the Company by
such Underwriter through you expressly for use therein; [and PROVIDED, FURTHER,
that the indemnity agreement contained in this Section 8(a) with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
(or any persons controlling such Underwriter) on account of any losses,
claims, damages, liabilities or litigation arising from the sale of
Securities to any person, if such Underwriter fails to send or give a copy of
the Prospectus, as the same may be then supplemented or amended, to such
person, within the time required by the Act and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus,
unless such failure is the result of noncompliance by the Company with
Section 5(c) hereof].
-24-
(b) In addition to any obligations of the Company under Section 8(a),
the Company agrees that it shall perform its indemnification obligations
under Section 8(a) (as modified by the last paragraph of this Section 8(b))
with respect to counsel fees and expenses and other expenses reasonably
incurred by making payments within 45 days to the Underwriter in the amount
of the statements of the Underwriter's counsel or other statements which
shall be forwarded by the Underwriter, and that they shall make such payments
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the obligation to reimburse the Underwriters for such
expenses and the possibility that such payments might later be held to have
been improper by a court and a court orders return of such payments.
The indemnity agreement in Section 8(a) shall be in addition to any
liability which the Company may otherwise have and shall extend upon the same
terms and conditions to each person, if any, who controls any Underwriter
within the meaning of the Act or the Exchange Act.
(c) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or any Application, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus or such amendment or supplement or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter relating to such Underwriter
through you expressly for use therein, and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
The indemnity agreement in this Section 8(c) shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act.
(d) Promptly after receipt by an indemnified party under Section 8(a)
or 8(c) of notice of the commencement of any action (including any
governmental investigation), such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
under Section 8(a) or 8(c) except to the extent it was unaware of such action
and has been prejudiced in any material respect by such failure or from any
liability which it may have to any indemnified party otherwise than under
such Section 8(a) or 8(c). In case any such action shall be brought against
any
-25-
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. If, however,
(i) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or (ii) an
indemnified party shall have reasonably concluded that representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them and the indemnified
party so notifies the indemnifying party, then the indemnified party shall be
entitled to employ counsel different from counsel for the indemnifying party
at the expense of the indemnifying party and the indemnifying party shall not
have the right to assume the defense of such indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to local 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 set of allegations or
circumstances. The counsel with respect to which fees and expenses shall be
so reimbursed shall be designated in writing by Schroder Wertheim & Co.
Incorporated in the case of parties indemnified pursuant to Section 8(a) and
by the Company in the case of parties indemnified pursuant to Section 8(c).
If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(b), the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(e) In order to provide for just and equitable contribution under the
Act in any case in which (i) any Underwriter (or any person who controls any
Underwriter within the meaning of the Act or the Exchange Act) makes claim
for indemnification pursuant to Section 8(a) hereof, but is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that Section 8(a) provides for
indemnification in such case or (ii) contribution under the Act may be
required on the part of any Underwriter or any such
-26-
controlling person in circumstances for which indemnification is provided
under Section 8(c), then, and in each such case, each indemnifying party
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject as an indemnifying party hereunder (after
contribution from others) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Securities purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8(e) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 8(e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 8(e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of a fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
Section 8(e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) Promptly after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding, such party will, if a
claim for contribution in respect thereof is to be made against another party
(the "contributing party"), notify the contributing party of the commencement
thereof; but the omission so to notify the
-27-
contributing party will not relieve it from any liability which it may have
to any other party for contribution under the Act except to the extent it was
unaware of such action and has been prejudiced in any material respect by
such failure or from any liability which it may have to any other party other
than for contribution under the Act. In case any such action, suit or
proceeding is brought against any party, and such party notifies a
contributing party of the commencement thereof, the contributing party will
be entitled to participate therein with the notifying party and any other
contributing party similarly notified.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Firm Securities on the terms contained herein. If the aggregate number
of Firm Securities as to which Underwriters default is more than one-eleventh
of the aggregate number of all the Firm Securities and within 36 hours after
such default by any Underwriter you do not arrange for the purchase of such
Firm Securities, then the Company shall be entitled to a further period of 36
hours within which to procure another party or other parties satisfactory to
you to purchase such Firm Securities on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Firm Securities, or the Company
notifies you that it has so arranged for the purchase of such Firm
Securities, you or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement
or the Prospectus or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Firm Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Securities of such defaulting Underwriter or Underwriters by you or the
Company or both as provided in subsection (a) above, the aggregate number of
such Firm Securities which remain unpurchased does not exceed one-eleventh of
the aggregate number of all the Firm Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number
of the Firm Securities which such Underwriter agreed to purchase hereunder
and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Firm Securities which such Underwriter
agreed to purchase hereunder) of the Firm Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Securities of a defaulting Underwriter or Underwriters by you or the
Company as provided in subsection (a) above, the aggregate number of such
Firm Securities which remain unpurchased exceeds one-eleventh of the
aggregate number of all the Firm Securities, or if the Company shall not
exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Firm Securities of a defaulting
Underwriter or
-28-
Underwriters, then this Agreement shall thereupon terminate without liability
on the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity agreement in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or an officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.
11. This Agreement shall become effective (a) if the Registration
Statement has not heretofore become effective, at the earlier of 12:00 Noon,
New York City time, on the first full business day after the Registration
Statement becomes effective, or at such time after the Registration Statement
becomes effective as you may authorize the sale of the Securities to the
public by Underwriters or other securities dealers, or (b) if the
Registration Statement has heretofore become effective, at the earlier of 24
hours after the filing of the Prospectus with the Commission or at such time
as you may authorize the sale of the Securities to the public by Underwriters
or securities dealers, unless, prior to any such time you shall have received
notice from the Company that it elects that this Agreement shall not become
effective, or you, or through you such of the Underwriters as have agreed to
purchase in the aggregate fifty percent or more of the Firm Securities
hereunder, shall have given notice to the Company that you or such
Underwriters elect that this Agreement shall not become effective; provided,
however, that the provisions of this Section and Section 6 and Section 8
hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 hereof, or
if this Agreement, by election of you or the Underwriters, shall not become
effective pursuant to the provisions of this Section, the Company shall not
then be under any liability to any Underwriter except as provided in Section
6 and Section 8 hereof, but if this Agreement becomes effective and is not so
terminated but the Securities are not delivered by or on behalf of the
Company as provided herein because the Company has been unable for any reason
beyond its control and not due to any default by it to comply with the terms
and conditions hereof, the Company will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Securities,
but the Company shall then be under no further liability to any Underwriter
except as provided in Section 6 and Section 8 hereof.
12. The statements set forth in the last paragraph on the front cover
page of the Prospectus, the paragraph on the inside front cover of the
Prospectus containing stabilization language and the second paragraph under
the caption "Underwriting" in the Prospectus
-29-
constitute the only information furnished by any Underwriter through the
Representatives to the Company for purposes of Sections 1(b), 1(c) and 8
hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by Schroder Wertheim & Co. Incorporated on behalf
of you as the Representatives.
All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, shall be in writing and, if to the
Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail)
to you as the Representatives in care of Schroder Wertheim & Co.
Incorporated, Equitable Center, 787 Seventh Avenue, New York, New York 10019,
Attention: Syndicate Department; and if to the Company, shall be delivered
or sent by mail, telex or facsimile transmission (subsequently confirmed by
delivery or by letter sent by mail) to the address of the Company set forth
in the Registration Statement, Attention:________________________; PROVIDED,
HOWEVER, that any notice to any Underwriter pursuant to Section 8(d) hereof
shall be delivered or sent by mail, telex or facsimile transmission
(subsequently confirmed by delivery or by letter sent by mail) to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be construed in accordance with the laws of
the State of New York, without giving effect to the conflicts of laws
principles thereof.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument. If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on
-30-
behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement Among Underwriters, manually or facsimile executed
counterparts of which, to the extent practicable and upon request, shall be
submitted to the Company for examination, but without warranty on your part
as to the authority of the signers thereof.
Very truly yours,
DeCrane Aircraft Holdings, Inc.
By:__________________________________
R. Jack DeCrane
Chairman and C.E.O.
Accepted as of the date hereof:
SCHRODER WERTHEIM & CO. INCORPORATED
DEAN WITTER REYNOLDS INC.
By: SCHRODER WERTHEIM & CO. INCORPORATED
By:__________________________________
Managing Director
-31-
SCHEDULE I
Underwriter Number of Firm Securities
----------- -------------------------
Schroder Wertheim & Co. Incorporated . . . . . . .
Dean Witter Reynolds Inc.. . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . .
-----------
-----------
-----------
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