EXHIBIT 1.01
$100,000,000
PARK ELECTROCHEMICAL CORP.
___% CONVERTIBLE SUBORDINATED NOTES DUE 2006
UNDERWRITING AGREEMENT
----------------------
______________ __, 1996
Lehman Brothers Inc.
Needham & Company, Inc.
Robertson, Stephens & Company LLC,
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Park Electrochemical Corp., a New York corporation (the "Company"),
proposes to sell $100,000,000 principal amount of ___% Convertible Subordinated
Notes due 2006 (the "Firm Notes"). In addition, the Company proposes to grant
to the Underwriters (as defined below) an option to purchase up to an additional
$15,000,000 principal amount of ___% Convertible Subordinated Notes due 2006 on
the terms and for the purposes set forth in Section 2 (the "Option Notes").
The Firm Notes and the Option Notes, if purchased, are hereinafter collectively
called the "Notes." The Notes are convertible into shares of common stock, par
value $.10 per share (the "Common Stock"), of the Company, upon the terms and
subject to the conditions and adjustments set forth in the Indenture (as defined
below), at a conversion price of $___ per share. The Notes are to be issued
pursuant to an Indenture (the "Indenture"), dated as of _________, 1996, between
the Company and The Chase Manhattan Bank, N.A., as trustee (the "Trustee"), the
form of which has been filed as an exhibit to the Registration Statements (as
defined below). This is to confirm the agreement concerning the purchase of the
Notes from the Company by the Underwriters named in Schedule 1 hereto (the
"Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, and amendments
thereto, with respect to the Notes have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act; a second registration statement on Form S-3 with
respect to the
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Notes (i) may also be prepared by the Company in conformity with the
requirements of the Securities Act and the Rules and Regulations and
(ii) if to be so prepared, will be filed with the Commission on the
date hereof under the Securities Act on the date hereof pursuant to
Rule 462(b) of the Rules and Regulations; and the Indenture has been
qualified under the Trust Indenture Act of 1939 (the "Trust Indenture
Act"). Copies of the first such registration statement and the
amendments to such registration statement, together with the form of
any such second registration statement, have been delivered by the
Company to you as the representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means (i)
with respect to the first such registration statement, the date and
the time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by
the Commission and (ii) with respect to any second registration
statement, the date and time as of which such second registration
statement is filed with the Commission, and "Effective Times" is the
collective reference to both Effective Times; "Effective Date" means
(i) with respect to the first such registration statement, the date of
the Effective Time of such registration statement and (ii) with
respect to any second registration statement, the date of the
Effective Time of such second registration statement, and "Effective
Dates" is the collective reference to both Effective Dates;
"Preliminary Prospectus" means each prospectus included in any such
registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Primary
Registration Statement" means the first registration statement
referred to in this Section 1(a), as amended at its Effective Time,
"Rule 462(b) Registration Statement" means the second registration
statement, if any, referred to in this Section 1(a), as filed with the
Commission, and "Registration Statements" means both the Primary
Registration Statement and any Rule 462(b) Registration Statement,
including in each case any documents incorporated by reference therein
at such time and all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations in accordance with Section 5(a) hereof and deemed to be a
part of the Registration Statements as of the Effective Time of the
Primary Registration Statement pursuant to paragraph (b) of Rule 430A
of the Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. Reference
made herein to any Preliminary Prospectus or to the Prospectus shall
be deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or the Prospectus,
as the case may be, and any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the date of such
Preliminary Prospectus or the Prospectus, as the case may
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be, and incorporated by reference in such Preliminary Prospectus or
the Prospectus, as the case may be; and any reference to any amendment
to either of the Registration Statements shall be deemed to include
any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that is incorporated by reference in the Registration Statements. The
Commission has not issued any order preventing or suspending the use
of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform) in all material respects
to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statements and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statements or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein; and the
Indenture conforms in all material respects to the requirements of the
Trust Indenture Act and the applicable rules and regulations
thereunder.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents, when they became effective or
were filed with the Commission, as the case may be, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents
become effective or are filed with Commission, as the case may be,
will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 15) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly
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qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification except where the failure to be so
qualified is not reasonably likely to have a material adverse effect
on the consolidated financial position, stockholders' equity, results
of operations or business of the Company and its subsidiaries, and
have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged;
and none of the subsidiaries of the Company (other than New England
Laminates Co., Inc., Nelco Products, Inc., Nelco Technology Inc.,
Neltec, Inc., Nelco Products Pte, Ltd. and Nelco International
Corporation (collectively, the "Significant Subsidiaries")) is a
"significant subsidiary", as such term is defined in Rule 405 of the
Rules and Regulations.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable, subject to Section 630 of the New York
Business Corporation Law (the "BCL"), and conform to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable
and (except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The Indenture has been duly authorized and, when duly
executed by the proper officers of the Company (assuming due execution
and delivery by the Trustee) and delivered by the Company, will have
been duly executed and delivered by the Company and will constitute a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing; and the Notes have been duly authorized, and,
when duly executed, authenticated, issued and delivered as provided in
the Indenture, will be duly and validly issued and outstanding, and
will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable in accordance with
their terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
(g) All of the shares of Common Stock issuable upon conversion
of the Notes have been duly and validly authorized and reserved for
issuance upon such conversion and, when issued and delivered in
accordance with the terms of the
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Indenture, will be duly and validly issued, fully paid and non-
assessable, subject to Section 630 of the BCL; and the Indenture, the
Notes and the Common Stock issuable upon conversion of the Notes will
conform in all material respects to the descriptions thereof contained
in the Prospectus; there are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Common Stock issuable upon conversion
of the Notes pursuant to the Company's charter or by-laws or any
agreement or other instrument.
(h) The execution, delivery and performance of this Agreement
and the Indenture by the Company, the consummation of the transactions
contemplated hereby and thereby and the issuance and delivery of the
Notes and the Common Stock issuable upon conversion of the Notes will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Notes and the Common
Stock issuable upon conversion of the Notes under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Notes by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Indenture by the
Company and the consummation of the transactions contemplated hereby
and thereby and the issuance of the Common Stock issuable upon
conversion of the Notes.
(i) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by
such person or to require the
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Company to include such securities in the securities registered
pursuant to the Registration Statements or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(j) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, stock options
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any change in the capital stock 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
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statements or
included or incorporated by reference in the Prospectus present fairly
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
(m) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus or
are incorporated by reference therein and who have delivered the
initial letter referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations; and Deloitte & Touche LLP and Arthur Andersen LLP, whose
respective reports appear in the Prospectus and are incorporated by
reference therein and who have each delivered the initial letter
referred to in Section 7(g) hereof, were independent accountants as
required by the Securities Act and the Rules and Regulations during
the periods covered by the respective financial statements on which
they reported as set forth in their respective reports contained and
incorporated in the Prospectus and as of the date of such reports.
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(n) The Company and each of 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 in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.
(o) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(p) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and licenses described in the
Prospectus as being owned or used by it or which are necessary for the
conduct of its business and has no reason to believe that the conduct
of its business will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others which claims,
singularly or in the aggregate, if subject to an unfavorable decision,
ruling or finding, are reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations or business of the Company and its subsidiaries.
(q) Except for environmental proceedings referred to under the
caption "Business--Environmental Matters" in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or asset
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, are
reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries;
and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
(r) The conditions for use of Form S-3, as set forth in General
Instruction I thereto, have been satisfied.
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(s) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to either of
the Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to either of the Registration Statements or incorporated
therein by reference as permitted by the Rules and Regulations.
(t) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(u) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
(v) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(w) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof
and has paid all taxes shown by such returns to be due, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or
any of its subsidiaries, might have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries.
(x) The Company (i) maintains and keeps accurate books and
records and (ii) maintains a system of internal accounting controls
sufficient to provide
9
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements in accordance with generally accepted accounting principles
and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's general or
specific authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable intervals.
(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its properties or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its properties or assets or to the
conduct of its business, other than such defaults, violations or
failures described in clauses (ii) or (iii) above which, singularly or
in the aggregate, are not reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations or business of the Company and its subsidiaries.
(z) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous substances
by the Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the properties now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; there has been no
material spill, discharge, leak, emission, injection, escape, dumping
or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by
the Company or any of its subsidiaries or with respect to which the
Company or any of its subsidiaries have knowledge, except for any such
spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to
have, singularly or in the aggregate with
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all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(aa) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
2. Purchase of the Notes by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell $100,000,000 principal
amount of the Firm Notes to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the principal amount
of the Firm Notes set opposite that Underwriter's name in Schedule 1 hereto.
In addition, the Company grants to the Underwriters an option to
purchase up to $15,000,000 principal amount of Option Notes. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Notes and is exercisable as provided in Section 4 hereof. Option Notes shall
be purchased severally for the account of the Underwriters in proportion to the
principal amount of Firm Notes set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Notes shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Notes other than in multiples
of $1,000.
The price of both the Firm Notes and any Option Notes shall be equal
to _____% of the principal amount thereof, plus accrued interest, if any, from
___________, 1996 to the applicable Delivery Date.
The Company shall not be obligated to deliver any of the Notes to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Notes to be
purchased on such Delivery Date as provided herein.
3. Offering of Notes by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Notes, the several Underwriters
propose to offer the Firm Notes for sale upon the terms and conditions set forth
in the Prospectus; provided, however, that no Notes registered pursuant to the
Rule 462(b) Registration Statement, if any, shall be offered prior to the
Effective Time thereof.
4. Delivery of and Payment for the Notes. Delivery of and payment
for the Firm Notes shall be made at the offices of Simpson Thacher & Bartlett at
425 Lexington Avenue, New York, New York 10017, at 10:00 A.M., New York City
time, on the [third][fourth] full business
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day following the date of this Agreement or at such other date or place as shall
be determined by agreement between the Representatives and the Company. This
date and time are sometimes referred to as the "First Delivery Date." On the
First Delivery Date, the Company shall deliver or cause to be delivered the Firm
Notes to the Representatives for the account of each Underwriter through the
facilities of The Depository Trust Company against payment to or upon the order
of the Company of the purchase price by certified or official bank check or
checks payable in immediately available (same-day) funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate principal amount of Option Notes as to which the option is being
exercised, the names in which the Option Notes are to be registered, the
denominations in which the Option Notes are to be issued and the date and time,
as determined by the Representatives, when the Option Notes are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
Option Notes are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date").
Delivery of and payment for the Option Notes shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the Option Notes to the Representatives for the account of
each Underwriter through the facilities of The Depository Trust Company against
payment to or upon the order of the Company of the purchase price by certified
or official bank check or checks payable in immediately available (same-day)
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City
time, the day following the execution and delivery of this Agreement;
to make no further amendment or any supplement to the Registration
Statements or to the Prospectus prior to the Second Delivery Date
except as permitted herein; to advise
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the Representatives, promptly after it receives notice thereof, of the
time when any amendment to either Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives
with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with
the offering or sale of the Notes; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Notes 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 Statements or the
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 Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement, the Indenture,
the computation of the ratio of earnings to fixed charges and the
computation of per share earnings), (ii) each Preliminary Prospectus,
the Prospectus (not later than 10:00 A.M., New York City time, of the
day following the execution and delivery of this Agreement) and any
amended or supplemented Prospectus (not later than 10:00 A.M., New
York City time, on the day following the date of such amendment or
supplement) and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time of the
Primary Registration Statement in connection with the offering or sale
of the Notes (or any other securities relating thereto) and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the
Exchange Act any
13
document incorporated by reference in the Prospectus in order to
comply with the Securities Act or the Exchange Act, to notify the
Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time request of an amended or supplemented Prospectus which
will correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to
either of the Registration Statements, any supplement to the
Prospectus or any document incorporated by reference in the Prospectus
or (ii) any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the
Representatives to the filing;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement, to make generally available to the
Company's security holders and to deliver to the Representatives an
earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of three years following the Effective Date of
the Primary Registration Statement, to furnish to the Representatives
copies of all materials furnished by the Company to its shareholders
and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange
upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Notes and the
Common Stock issuable upon conversion of the Notes for offering and
sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes; 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
14
jurisdiction or to subject itself to taxation in any jurisdiction in
which it is not currently subject to jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, offer for sale, sell or otherwise dispose
of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition or purchase by any
person at any time in the future of) any (i) debt securities of the
Company with maturities longer than one year (other than the Notes as
contemplated by this Agreement) or (ii) shares of Common Stock (other
than shares offered or issued pursuant to employee benefit plans,
stock option plans or other employee compensation plans existing on
the date hereof or pursuant to currently outstanding options, warrants
or rights and other than in connection with the offer for sale, or the
conversion, of the Notes), or sell or grant options, rights or
warrants with respect to any such debt securities or shares of Common
Stock (other than the grant of options pursuant to option plans
existing on the date hereof and other than in connection with the
offer for sale, or the conversion, of the Notes), without the prior
written consent of the Representatives; and to cause each officer and
director of the Company to furnish to the Representatives, prior to
the First Delivery Date, a letter or letters, in form and substance
satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to, directly or indirectly, offer for
sale, sell or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the
disposition or purchase by any person at any time in the future of)
any such debt securities or, except as described therein, shares of
Common Stock for a period of 90 days from the date of the Prospectus,
without the prior written consent of Lehman Brothers Inc.;
(j) To reserve and continue to reserve a sufficient number of
shares of Common Stock for issuance upon conversion of the Notes;
(k) To complete the listing of the Notes on the New York Stock
Exchange, Inc. ("NYSE"), subject only to official notice of issuance
and evidence of satisfactory distribution prior to the First Delivery
Date;
(l) To complete the listing of the Common Stock issuable upon
conversion of the Notes on the NYSE, subject to official notice of
issuance of the Notes; and
(m) To apply the net proceeds from the sale of the Notes being
sold by the Company as set forth in the Prospectus.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Notes and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statements and any amendments and
exhibits thereto; (c) the costs of distributing
15
the Registration Statements as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the costs of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Notes; (g) any applicable
listing or other fees; (h) the fees and expenses of qualifying the Notes under
the securities laws of the several jurisdictions as provided in Section 5 and
of preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Underwriters); (i) any fees charged by
securities rating services for rating the Notes; (j) the acceptance fees of the
Trustee and, unless otherwise agreed with the Trustee, the fees and expenses of
counsel to the Trustee; and (k) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11, the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Notes which they may sell and the
expenses of advertising any offering of the Notes made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the
effectiveness of either of the Registration Statements or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in
either of the Registration Statements or the Prospectus or otherwise
shall have been complied with or withdrawn.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or
supplement thereto contains any untrue statement of a fact which, in
the opinion of Simpson Thacher & Bartlett, counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
16
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Notes, the
Indenture, the Common Stock issuable upon conversion of the Notes, the
Registration Statements and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all material respects to counsel for
the Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Brian W. Pusch, Esq. shall have furnished to the
Representatives his written opinion, as special counsel to the
Company, addressed to the Underwriters and dated such Delivery Date,
in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) The Company and each of its Significant
Subsidiaries have been duly incorporated and are validly existing
as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in
each jurisdiction specified in such opinion, and have all power
and authority necessary to own or hold their respective
properties and conduct the businesses in which they are engaged;
(ii) The Indenture has been duly authorized, executed
and delivered by the Company and, assuming due execution and
delivery by the Trustee, constitutes a valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;
(iii) The Notes have been duly authorized, executed
and delivered by the Company and, assuming due authentication
thereof by the Trustee and upon payment and delivery in
accordance with this Agreement, will be duly and validly issued
and outstanding and will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
17
(iv) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable (subject
to Section 630 of the BCL) and conform to the description thereof
contained in the Prospectus; all of the shares of Common Stock
issuable upon conversion of the Notes have been duly and validly
authorized and reserved for issuance upon such conversion and,
when issued and delivered in accordance with the terms of the
Indenture, will be duly and validly issued, fully paid and non-
assessable (subject to Section 630 of the BCL); and all of the
issued shares of capital stock of each Significant Subsidiary of
the Company have been duly and validly authorized and issued and
are fully paid, non-assessable (except as otherwise provided by
applicable law) and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(v) The Indenture and the Notes conform to the
description thereof contained in the Prospectus;
(vi) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Common Stock issuable upon
conversion of the Notes pursuant to the Company's charter or by-
laws or any agreement or other instrument known to such counsel;
(vii) To the best of such counsel's knowledge and
other than as referred to under the caption "Business--
Environmental Matters" in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or asset of
the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
are reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(viii) The Primary Registration Statement was
declared effective under the Securities Act and the Indenture was
qualified under the Trust Indenture Act as of the date and time
specified in such opinion, the Rule 462(b) Registration
Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and, to the
18
knowledge of such counsel, no stop order suspending the
effectiveness of either of the Registration Statements has been
issued and no proceeding for that purpose is pending or
threatened by the Commission;
(ix) The Registration Statements, as of their
respective Effective Dates, and the Prospectus, as of its date,
and any further amendments or supplements thereto, as of their
respective dates, made by the Company prior to such Delivery Date
(other than the financial statements and other financial data
contained therein, as to which such counsel need express no
opinion) complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
the documents incorporated by reference in the Prospectus and any
further amendment or supplement to any such incorporated document
made by the Company prior to such Delivery Date (other than the
financial statements and related schedules and other financial
data contained therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder; and the
Indenture conforms in all material respects to the requirements
of the Trust Indenture Act and the applicable rules and
regulations thereunder;
(x) To the best of such counsel's knowledge, there
are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to
the Registration Statements or incorporated therein by reference
as permitted by the Rules and Regulations;
(xi) This Agreement has been duly authorized,
executed and delivered by the Company;
(xii) The issue and sale of the Notes being
delivered on such Delivery Date by the Company and the compliance
by the Company with all of the provisions of this Agreement and
the Indenture and the consummation of the transactions
contemplated hereby and thereby and the issuance and delivery of
the Common Stock issuable upon conversion of the Notes will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
material 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 properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result
19
in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets;
and, except for the registration of the Notes and the Common
Stock issuable upon conversion of the Notes under the Securities
Act, such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Notes by the Underwriters (in the case of
such state securities laws, as to which such counsel need express
no opinion) and the qualification of the Indenture under the
Trust Indenture Act of 1939, as amended, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or the
Indenture by the Company and the consummation of the transactions
contemplated hereby and thereby and the issuance of the Common
Stock issuable upon conversion of the Notes; and
(xiii) To the best of such counsel's knowledge,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require
the Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statements or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States
of America and the laws of the State of New York. Such counsel shall
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in form
and substance satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Company on a regular
basis with respect to corporate and securities law matters (although
the Company is also represented by its General Counsel and, with
respect to certain other matters, by other outside counsel) and has
acted as counsel to the Company in connection with the preparation of
the Registration Statements, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead him to believe
that (I) the Registration Statements (other than the financial
statements and other financial data contained therein, as to which
such counsel need make no such written statement), as of their
respective Effective Dates, contained any untrue statement of a
material fact or omitted to state any material fact required
20
to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (other than the
financial statements and other financial data contained therein, as to
which such counsel need make no such written statement) contains any
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading or (II) any document incorporated by
reference in the Prospectus or any further amendment or supplement to
any such incorporated document made by the Company prior to such
Delivery Date (other than the financial statements and other financial
data contained therein, as to which such counsel need make no such
written statement), when they became effective or were filed with the
Commission, as the case may be, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and
statement may be qualified by a statement to the effect that, except
as set forth in paragraphs (iv) and (v) above, such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statements or the
Prospectus.
(e) White & Case, special tax counsel to the Company, shall have
furnished to the Representatives their written opinion, as special tax
counsel to the Company, addressed to the Underwriters and dated the
Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that: the statements contained in the
Prospectus under the caption "Certain Federal Income Tax
Consequences", insofar as they describe federal statutes, rules and
regulations, constitute a fair summary thereof.
(f) With respect to the letter of Ernst & Young LLP delivered to
the Representatives concurrently with the execution of this Agreement
(as used in this paragraph, the "initial letter"), the Company shall
have furnished to the Representatives a letter (as used in this
paragraph, the "bring-down letter") of such accountants, addressed to
the Underwriters and dated such Delivery Date (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
21
(g) With respect to the letter of each of Deloitte & Touche LLP
and Arthur Andersen LLP delivered to the Representatives concurrently
with the execution of this Agreement (each, as used in this paragraph,
the "initial letter"), the Company shall have furnished to the
Representatives a letter (as used in this paragraph, the "bring-down
letter") of each such accountants, addressed to the
Underwriters and dated the Delivery Date (i) confirming that such
accountants were independent public accountants within the meaning of
the Securities Act and were in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission during the periods covered by
the respective financial statements on which they reported as set
forth in their respective reports contained and incorporated in the
Prospectus and as of the date of such reports and (ii) confirming in
all material respects the conclusions and findings set forth in such
accountants' initial letter.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board or
an Executive Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the condition set forth in Section 7(a) has been
fulfilled;
(ii) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus and since such date there has
not been any material adverse change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a
prospective change, in or affecting the general affairs or
management of the Company or the consolidated financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus; and
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A) the
Registration Statements, as of their respective Effective Dates,
and the Prospectus, as of each of the Effective Dates, did not
include any untrue statement of a material fact and did not omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the
22
Effective Date of the Primary Registration Statement no event has
occurred which should have been set forth in a supplement or
amendment to either of the Registration Statements or the
Prospectus which has not been set forth in such a supplement or
amendment.
(i) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs or management of the Company or the
consolidated financial 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 described in clause (i) or (ii), is, in the reasonable
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Notes being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the NYSE or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in
interest of the several Underwriters, impracticable or inadvisable to
proceed with the public offering or delivery of the Notes being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt
23
securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(l) The NYSE shall have approved the Notes for listing, subject
only to official notice of issuance and evidence of satisfactory
distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company and Nelco International Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Company (the "Principal
Subsidiary"), jointly and severally, shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or (B) in any blue sky application or other document
prepared or executed by the Company (or based upon any written information
furnished by the Company) specifically for the purpose of qualifying any or all
of the Notes or the Common Stock issuable upon conversion of the Notes under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), or
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Underwriter and each such officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company and the Principal Subsidiary shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Company through the
24
Representatives by or on behalf of any Underwriter specifically for inclusion
therein as described in Section 8(e). The foregoing indemnity agreement is in
addition to any liability which the Company or the Principal Subsidiary may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company through the Representatives by
or on behalf of that Underwriter specifically for inclusion therein as described
in Section 8(e), and shall reimburse the Company and any such director, officer
or controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of
25
investigation; provided, however, that the Representatives shall have the right
to employ counsel to represent jointly the Representatives and those other
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company or the Principal
Subsidiary under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company and the Principal Subsidiary. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 8(a) and 8(b), shall use its best efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
prior written consent (which consent shall not be unreasonably withheld), but if
settled with its prior written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Sections 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes purchased under this Agreement (before deducting expenses)
received by the Company on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Notes under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged
26
omission to state a material fact relates to information supplied by the Company
or the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Principal Subsidiary and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
8(d) were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), 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(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Notes set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statements and the
Prospectus.
9. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Notes which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the principal amount of Firm
Notes set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total principal amount of Firm Notes set opposite
the names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Notes on such Delivery Date if the total
principal amount of Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such date exceeds 9.09% of the total principal
amount of Notes to be purchased on such Delivery Date, and any remaining non-
defaulting Underwriter shall not be obligated to purchase more than 110% of the
principal amount of Notes which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Notes to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters
27
satisfactory to the Representatives do not elect to purchase the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Notes) shall terminate without liability on the part of any non-
defaulting Underwriter or the Company, except that the Company will continue to
be liable for the payment of expenses to the extent set forth in Sections 6 and
11. As used in this Agreement, the term "Underwriter" includes, for all purposes
of this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Notes which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Notes of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Notes if, prior to that
time, any of the events described in Sections 7(i), 7(j) or 7(k) shall have
occurred or if the Underwriters shall decline to purchase the Notes for any
reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Notes for delivery to the Underwriters for any reason
permitted under this Agreement, or (b) the Underwriters shall decline to
purchase the Notes for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 10), the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Notes, and upon
demand the Company shall pay the full amount thereof to the Representatives. If
this Agreement is terminated pursuant to Section 9 by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 212-528-8822);
28
(b) if to the Company or the Principal Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Primary Registration
Statement, Attention: Chief Financial Officer (Fax: 516-354-4128);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Lehman Brothers Inc. on behalf of the
Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective personal representatives and successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the indemnities and agreements of the Company contained in
Section 8(a) of this Agreement shall also be deemed to be for the benefit of the
officers and employees of each Underwriter and the person or persons, if any,
who control each Underwriter within the meaning of Section 15 of the Securities
Act and (B) the indemnity agreement of the Underwriters contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of directors,
officers and employees of the Company and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Principal Subsidiary and the
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each
29
be deemed to be an original but all such counterparts shall together constitute
one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
30
If the foregoing correctly sets forth the agreement among the Company,
the Principal Subsidiary and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
PARK ELECTROCHEMICAL CORP.
By ________________________________________
Title:
NELCO INTERNATIONAL CORPORATION
By ________________________________________
Title:
Accepted:
Lehman Brothers Inc.
Needham & Company, Inc.
Robertson, Stephens & Company LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Lehman Brothers Inc.
By _____________________________________
Authorized Representative
SCHEDULE 1
Principal Amount
Underwriters of Firm Notes
------------ ----------------
Lehman Brothers Inc. . . . . . . . . . . . . . . . . .
Needham & Company, Inc. . . . . . . . . . . . . . . .
Robertson, Stephens & Company LLC . . . . . . . . . . .
____________
Total . . . . . . . . . . . . . . . . . . . . . . . $100,000,000
============