EXHIBIT 1
GC&D Draft 7/2/96
CII Technologies Inc.
Shares*
Common Stock
UNDERWRITING AGREEMENT
______________, 1996
WILLIAM BLAIR & COMPANY, L.L.C.
FURMAN SELZ L.L.C.
As Representatives of the Several
Underwriters Named in Schedule A
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
SECTION 1. Introductory. CII Technologies Inc. (the "Company"), a Delaware
corporation, has an authorized capital stock consisting of _____________ shares
of Preferred Stock, of which [80,000] shares were outstanding as of
_______________, 1996 and _________________ shares of Common Stock $0.01 par
value per share ("Common Stock"), of which ______________ shares were
outstanding as of such date. The Company proposes to issue and sell ____________
shares of its authorized but unissued Common Stock to the several underwriters
named in Schedule A as it may be amended by the Pricing Agreement hereinafter
defined ("Undewriters"), who are acting severally and not jointly. Such total of
______________ shares of Common Stock proposed to be sold by the Company is
hereinafter referred to as the "Firm Shares". In addition, the Company proposes
to grant to the Underwriters an option to purchase up to ____________ additional
shares of Common Stock ("Option Shares") as provided in Section 4 hereof. The
Firm Shares and, to the extent such option is exercised, the Option Shares, are
hereinafter collectively referred to as the "Shares."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and William Blair & Company, L.L.C. and Furman Selz
L.L.C. (the "Representatives"), acting on behalf of the several Underwriters,
shall enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement may take the form of an exchange of
any standard form of written telecommunication between the Company and the
Representatives and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the Shares will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date of
the execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
________________________
* Plus an option to acquire from the Company up to ______________ additional
shares to cover overallotments.
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333- and a related
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preliminary prospectus with respect to the Shares have been prepared and
filed with the Securities and Exchange Commission ("Commission") by the
Company in conformity with the requirements of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "1933 Act," all references herein to specific rules are
rules promulgated under the 1933 Act); the Company has so prepared and has
filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof and (will file
such additional amendments thereto and such amended prospectuses as may
hereafter required.) There have been or will promptly be delivered to you
three signed copies of such registration on statement and amendments, three
copies of each exhibit filed therewith, and conformed copies of such
registration statement and amendments (but without exhibits) and of the
related preliminary prospectus or prospectuses and Final forms of prospectus
for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it
becomes effective and the prospectus constituting a part thereof (including
the information, if any, deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 43OA(b) and/or Rule 434(d)), as
from time to time amended or supplemented, are hereinafter referred to as
the "Registration Statement" and the "Prospectus," respectively, except
that if any revised prospectus shall be provided to the Underwriters by the
Company for use in connection with the offering of the Shares which differs
from the Prospectus on file at the Commission at the time the Registration
Statement became or becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b)),
the term "Prospectus" shall refer to such revised prospectus from and after
the time it was provided to the Underwriters for such use. If the Company
elects to rely on Rule 434 of the 1933 Act, all references to "Prospectus"
shall be deemed to include, without limitation, the form of prospectus and
the term sheet, taken together, provided to the Underwriters by the Company
in accordance with Rule 434 of the 1933 Act (the "Rule 434 Prospectus"). Any
registration statement (including any amendment or supplement thereto or
information which is deemed to be a part thereof) filed by the Company under
Rule 462(b) (the "Rule 462(b) Registration Statement") shall be deemed to be
part of the "Registration Statement" as defined herein, and any prospectus
(including any amendment or supplement thereto or information which is
deemed a part thereof included in such registration statement shall be
deemed to be a part of the "Prospectus" as defined herein, as appropriate.
The Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter collectively
referred to as the "Exchange Act."
(b) The Commission has not issued any order preventing or suspending the
use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case may
be, the Registration Statement, including the information deemed to
be part of the Registration Statement at the time of effectiveness pursuant
to Rule
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430A(b) or Rule 434(d), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are required
to be stated therein in accordance with the 1933 Act and in all material
respects conformed or will in all material respects conform to the requirements
of the 1933 Act and neither the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company makes no representation or
warranty as to information contained in or omitted from any preliminary
prospectus, the Registration Statement the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Underwriter through the Representatives
specifically for use in the preparation thereof.
(c) Communications Instruments, Inc., a North Carolina corporation, and
Kilovac Corporation, a California corporation (collectively the "Subsidiaries,)
constitute the Company's only "significant subsidiaries" (as such term is
defined in Rule 405 of Regulation C under the 1933 Act).
(d) The Company and the Subsidiaries have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective places of incorporation, with corporate power and authority to own
their properties and conduct their business as described in the Prospectus; the
Company and the Subsidiaries are duly qualified to do business as foreign
corporations under the corporation law of, and are in good standing as such in,
each jurisdiction in which such qualification is required except in any such
case where the failure to so qualify or be in good standing would not have a
material adverse effect upon the Company and the Subsidiaries taken as a whole;
and no proceeding of which the Company has knowledge has been instituted in any
such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(e) Except as disclosed in the Registration Statement, the Company owns
directly or indirectly 100 percent of the issued and outstanding capital stock
of the Subsidiaries, free and clear of any claims, liens, encumbrances or
security interests and all of such capital stock has been duly authorized and
validly issued and is fully paid and nonassessable.
(f) The issued and outstanding shares of capital stock of the Company as
set forth in the Prospectus have been duly authorized and validly issued, are
fully paid and nonassessable, and conform to the description thereof contained
in the Prospectus.
(g) The Shares to be sold by the Company have been duly authorized and when
issued, delivered and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and will conform to the description
thereof contained in the Prospectus.
(h) The making and performance by the Company of this Agreement and the
Pricing Agreement have been duly authorized by all necessary corporate action
and will not violate any provision of the Company's charter or bylaws and will
not result in the breach, or be in contravention, of any provision of any
agreement, franchise, license, indenture, mortgage, deed of trust, or other
instrument to which the Company or either of the Subsidiaries are a party or by
which the Company, either of the Subsidiaries or the property of any of them may
be bound or affected, or any order, rule or regulation applicable to the Company
or either of the Subsidiaries of any court or regulatory body, administrative
agency or other governmental body applicable to
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the Company or either of the Subsidiaries or any of their respective
properties, or any order of any court or governmental agency or authority
entered in any proceeding to which the Company or either of the Subsidiaries
were or are now a party or by which any of them are bound. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the Pricing Agreement or the consummation of
the transactions contemplated herein or therein, except for compliance with the
1933 Act and blue sky laws applicable to the public offering of the Shares by
the several Underwriters and clearance of such offering with the National
Association of Securities Dealers, Inc. ("NASD"). This Agreement has been duly
executed and delivered by the Company.
(i) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the Registration
Statement are independent accountants as required by the 1933 Act.
(j) The consolidated financial statements and schedules of the Company
included in the Registration Statement present fairly the consolidated financial
position of the Company and the Subsidiaries as of the respective dates of such
financial statements, and the consolidated results of operations and cash flows
of the Company and the Subsidiaries for the respective periods covered thereby,
all in conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed in the Prospectus;
and the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. The financial information
set forth in the Prospectus under "Selected Historical Consolidated Financial
Information" presents fairly, on the basis stated in the Prospectus, the
information set forth therein.
The financial statements of the Hartman Electrical Manufacturing Division of
Figgie International, Inc. ("Hartman") included in the Registration Statement
present fairly the consolidated financial position of Hartman as of the
respective dates of such financial statements, and the results of operations and
cash flows of Hartman for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed in the Prospectus.
The pro forma financial statements and other pro forma financial
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and other pro forma
information, have been properly compiled an the pro forma basis described
therein, and in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate under the circumstances.
(k) Neither the Company nor either of the Subsidiaries is in violation of
its charter or in default under any consent decree, or in default with respect
to any material provision of any lease, loan agreement, franchise, license,
permit or other contract obligation to which it is a party; and there does not
exist any state of facts which constitutes an event of default as defined in
such documents or which, with notice or lapse of time or both, would constitute
such an event of default in each case, except for defaults which neither singly
nor in the aggregate are material to the Company and the Subsidiaries taken as a
whole,
(l) There are no material legal or governmental proceedings pending, or to
the Company's knowledge, threatened to which the Company or either of the
Subsidiaries is or may
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be a party or of which material property owned or leased by the, Company or
either of the Subsidiaries is or may be the subject, or related to environmental
or discrimination matters which are not disclosed in the Prospectus, or which
question the validity of this Agreement or tile Pricing Agreement or any action
taken or to be taken pursuant hereto or thereto.
(m) There are no holders of securities of the Company having rights to
registration thereof or preemptive rights to purchase Common Stock except as
disclosed in the Prospectus. Holders of registration rights have waived such
rights with respect to the offering being made by the Prospectus.
(n) The Company and the Subsidiaries have good and marketable title to all
the properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those, if any,
reflected in such financial statements (or elsewhere in the Prospectus) or which
are not material to the Company and the Subsidiaries taken as a whole. The
Company and each of the Subsidiaries hold their respective leased properties
which are material to the Company and the Subsidiaries taken as a whole under
valid and binding leases.
(o) The Company has not taken and will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares,
(p) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as contemplated by the
Prospectus, the Company and the Subsidiaries, taken as a whole, have not
incurred any material liabilities or obligations, direct or contingent nor
entered into any material transactions not in the ordinary course of business
and there has not been any material adverse change in their condition (financial
or otherwise) or results of operations not any material change in their capital
stock, short-term debt or long-term debt.
(q) The Company agrees not to sell, contract to sell or otherwise dispose of
any Common Stock or securities convertible into Common Stock (except Common
Stock issued pursuant to currently outstanding options), for a period of 365
days after this Agreement becomes effective without the prior written consent of
the Representatives. The Company has obtained, or will obtain similar agreements
from each stockholder, director and executive officer of the Company as required
by Section 7(f)(v) of this Agreement,
(r) There is no material document of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as required.
(s) The Company together with the Subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third parties,
all patents, trademarks, copyrights and other proprietary rights ("Trade
Rights") material to the business of the Company and the Subsidiaries taken as
a whole. Neither the Company nor either of the Subsidiaries has received any
notice of infringement, misappropriation or conflict from any third party as to
such material Trade Rights which has not been resolved or disposed of and
neither the Company nor either of the Subsidiaries has infringed,
misappropriated or otherwise conflicted with material Trade Rights of any third
parties, which infringement, misappropriation or conflict would have a
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material adverse effect upon the condition (financial or otherwise) or results
of operations of the Company and the Subsidiaries taken as a whole.
(t) The conduct of the business of the Company and the Subsidiaries is in
compliance in all respects with applicable federal, state, local and foreign
laws and regulations, except where the failure to be in compliance would not
have a material adverse effect upon die condition (financial or otherwise) or
results of operations of the Company and the Subsidiaries taken as a whole.
(u) All offers and sales of the Company's capital stock prior to the date
hereof were at all relevant times exempt from the registration requirements of
the 1933 Act and were duly registered with or the subject of an available
exemption from the registration requirements of the applicable state securities
or blue sky laws.
(v) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and, except
as disclosed in the Prospectus, there is no tax deficiency that has been, or to
the knowledge of the Company might be, asserted against the Company or either of
the Subsidiaries or any of their properties or assets that would or could be
expected to have a material adverse affect upon the condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries taken as
a whole.
(w) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock thereunder, has filed an
application to list the Shares on the Nasdaq National Market, and has received
notification that the listing has been approved, subject to notice of issuance
or sale of the Shares, as the case may be.
(x) The Company is not, and does not intend to conduct its business in a
manner in which it would become, an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended ("Investment Company
Act").
(y) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section I of Laws of Florida, Chapter 92-198, An Act
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Relating to Disclosure of Doing Business with Cuba, and the Company further
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agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the Department.
SECTION 3. Representation and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. Purchase, Sale and Delivery of Shares, On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the
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Company agrees to sell to the Underwriters named in Schedule A hereto, and the
Underwriters agree, severally and not jointly, to purchase from the Company
____________ Firm Shares at the price per share set forth in the Pricing
Agreement. The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of full shares which (as nearly as
practicable, as determined by you) bears to ___________ , the same proportion as
the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased by all
Underwriters under this Agreement. The initial public offering price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section II hereof) following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
fourth business day, if permitted under Rule l5c6-1 under the Exchange Act (or
the third business day if required under Rule 15c6-1 under the Exchange Act)
after execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by them, respectively, against payment of the purchase price
therefor by certified or bank cashier's checks in Chicago Clearing House funds
(next-day funds) payable to the order of the Company. Such time of delivery and
payment is herein referred to as the "First Closing Date." The certificates for
the Firm Shares so to be delivered will be in such denominations and registered
in such names as you request by notice to the Company prior to 10:00 A.M.,
Chicago Time, on the third full business day preceding the First Closing Date,
and will be made available at the Company's expense for checking and packaging
by William Blair & Company, L.L.C. at 10:00 A.M., Chicago Time, on the first
full business day preceding the First Closing Date. Payment for the Firm Shares
so to be delivered shall be made at the time and in the manner described above
at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of ___________ Option Shares, at
the same purchase price per share to be paid for the Firm Shares, for use solely
in covering any overallotments, made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be purchased
by each Underwriter shall be determined by multiplying the number of Option
Shares to be sold by the Company pursuant to such notice of exercise by a
fraction, the numerator of which is the number of Firm Shares to be purchased by
such Underwriter as set forth opposite its name in Schedule A and the
denominator of which is the total number of Firm Shares (subject to such
adjustments to eliminate any fractional share purchases as you in your absolute
discretion may make). Certificates for the Option Shares will be made available
at the Company's expense for checking and packaging at 10:00 A.M., Chicago Time,
on the first full business day preceding the Second Closing Date, The manner of
payment for and delivery of the Option Shares shall be the same as for the Firm
Shares as specified in the preceding paragraph.
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You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information, and will not file any amendment or supplement to the
Registration Statement, to any preliminary prospectus or to the Prospectus
of which you have not been furnished with a copy prior to such filing or to
which you reasonably object.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any post-
effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434)
and will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements or
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriter may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriter with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an 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, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
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Underwriters in connection with the offering of the Shares which differs from
the prospectus on file with the Commission at the time of effectiveness of the
Registration Statement, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) to comply with the 1933 Act, the Company promptly
will advise you thereof and will promptly prepare and file with the Commission
an amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance; and, in case any Underwriter is
required to deliver a prospectus nine months or more after the effective date of
the Registration Statement, the Company upon request, but at the expense of such
Underwriter, will prepare promptly such Prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
1933 Act.
(e) Neither the Company nor either of the Subsidiaries will, prior to the
earlier of the Second Closing Date or termination or expiration of the related
option, incur any liability or obligation, direct or contingent, or enter into
any material transaction, other than in the ordinary course of business, except
as contemplated by the Prospectus.
(o Neither the Company nor either of the Subsidiaries will acquire any
capital stock of the Company prior to the earlier of the Second Closing Date or
termination or expiration of the related option, nor will the Company declare or
pay any dividend or make any other distribution upon the Common Stock payable to
stockholders of record on a date prior to the earlier of the Second Closing Date
or termination or expiration of the related option, except in either case as
contemplated by the Prospectus.
(g) The Company will make generally available to its security holders an
earnings statement (which need not be audited) covering a period of at least 12
months beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 1l(a) of the 1933
Act and Rule 158 thereunder.
(h) During such period as a prospectus is required by law to be delivered
connection with offers and sales of the Shares by an Underwriter or dealer, the
Company will furnish to you at its expense, subject to the provisions of
subsection (b) hereof, copies of the Registration Statement, the Prospectus,
each preliminary prospectus and all amendments and supplements to any such
documents in each case as soon as available and in such quantities as you may
reasonably request, for the purposes contemplated by the 1931 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such jurisdictions as
you designate, and will continue such qualifications in effect so long as
reasonably required for the distribution of the Shares. The Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not currently qualified
or where it would be subject to taxation as a foreign corporation.
(j) During the period of five years hereafter, the Company will furnish you
and, if so requested by any other Underwriter, each such requesting Underwriter
with a copy (i) as soon as practicable after the filing thereof, of each report
filed by the Company with the Commission, any securities exchange or the NASD;
(ii) as soon as practicable after the release thereof, of each material press
release in respect of the Company; and (iii) as soon as available, of each
report of the Company mailed to stockholders.
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(k) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration Statement, any
information shall have been omitted therefrom in reliance upon Rule 430A
and/or Rule 434, then immediately following the execution and delivery of the
Pricing Agreement, the Company will prepare, and file or transmit for filing
with the Commission in accordance with such Rule 430A, Rule 424(b) and/or Rule
434, as the case may be, copies of an amended prospectus or term sheet, as the
case may be, or, if required by such Rule 430A or Rule 434, as the case may be,
a post-effective amendment to the Registration Statement (including an amended
prospectus), containing all information so omitted. If required, the Company
will prepare and file, or transmit for filing, a Rule 462(b) Registration
Statement not later than the date of the execution of the Pricing Agreement. If
a 462(b) Registration Statement is filed, the Company shall make payment of, or
arrange for payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and reporting
requirements of the Exchange Act and the Nasdaq National Market and will
file with the Commission in a timely manner all reports on Form SR required by
Rule 463 and will furnish you copies of any such reports as soon as practicable
after the filing thereof.
SECTION 6. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective as to all of its
provisions or is terminated, the Company agrees to pay (i) all costs, fees and
expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Pricing Agreement and the Blue Sky Memorandum, (ii) all costs,
fees and expenses (including legal fees not to exceed $15,000 and disbursements
of counsel for the Underwriters) incurred by the Underwriters in connection with
qualifying or registering all or any part of the Shares for offer and sale under
blue sky laws, including the preparation of a blue sky memorandum relating to
the Shares, and clearance of such offering with the NASD; and (iii) all fees and
expenses of the Company's transfer agent, printing of the certificates for the
Shares and all transfer taxes, if any, with respect to the sale and delivery of
the Shares to the several Underwriters.
SECTION 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective either prior to
the execution of this Agreement or not later than 1:00 P.M., Chicago Time, on
the first full business day after the date of this Agreement, or such later
time as shall have been consented to by you but in no event later than 1:00
P.M., Chicago Time, on the third full business day following the
-10-
date hereof, and prior to the First Closing Date or the Second Closing Date, as
the case may be, no stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that purpose shall have
been instituted or shall be pending or, to the knowledge of the Company or you,
shall be contemplated by the Commission. If the Company has elected to rely
upon Rule 430A and/or Rule 434, the information concerning the initial public
offering price of the Shares and price-related information shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the
prescribed period and the Company will provide evidence satisfactory to the
Representatives of such timely filing (or a post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been transmitted
to the Commission for filing and become effective within the prescribed time
period and, prior to the First Closing Date, the Company shall provide evidence
of such filing and effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky laws of
such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and sale or
transfer and sale of the Shares hereunder, the validity and form of the
certificates representing the Shares, the execution and delivery of this
Agreement and the Pricing Agreement, and all corporate proceedings and other
legal matters incident thereto, and the form of the Registration Statement and
the Prospectus (except financial statements) shall have been approved by counsel
for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration Statement
or the Prospectus or any amendment or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Company or either
of the Subsidiaries, whether or not arising in the ordinary course of business,
which, in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or purchase of the Shares as
contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the case
may be, except as otherwise, expressly provided below:
(i) An opinion of Simpson Thacher & Bartlett, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company has been duly
qualified to do business as a foreign
-11-
corporation under the corporation law of, and is in good standing as such in,
every jurisdiction where the ownership or leasing of property, or the conduct of
its business requires such qualification except where the failure so to qualify
would not have a material adverse effort upon the condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries taken as
a whole;
(2) each of the Subsidiaries has been duly incorporated and is validly
existing and in good standing under the laws of their respective states of
incorporation, with corporate power and authority to own their properties and
conduct their business as described in the Prospectus; and each Subsidiary has
been duly qualified to do business as a foreign corporation under the
corporation law of, and is in good standing as such in, every jurisdiction where
such Subsidiary conducts operations, except where the failure so to qualify
would not have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries taken as
a whole
(3) all of the issued and outstanding capital stock of each Subsidiary has
been duly authorized, validly issued and is fully paid and nonassessable, and,
except as disclosed in the Registration Statement, the Company owns directly or
indirectly 100 percent of the outstanding capital stock of the Subsidiaries and
such stock is owned free and clear of any claims, liens, encumbrances or
security interests;
(4) the authorized capital stock of the Company, of which there is
outstanding the amount set forth in the Registration Statement and Prospectus
(except for subsequent issuances, if any, pursuant to stock options or other
rights referred to in the Prospectus), conforms as to legal matters in all
material respects to the description thereof in the Registration Statement and
Prospectus;
(5) the issued and outstanding capital stock of the Company has been duly
authorized and validly issued and is fully paid and nonassessable;
(6) the certificates for the Shares to be delivered hereunder are in due and
proper form, and when duly countersigned by the Company's transfer agent and
delivered to you or upon your order against payment of the agreed consideration
therefor in accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized and validly
issued, fully paid and nonassessable;
(7) the Registration Statement has become effective under the 1933 Act, 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 contemplated under the
1933 Act and the Registration Statement (including the information deemed to be
pad of the Registration Statement at the time of effectiveness pursuant to Rule
43OA(b) and/or Rule 434(d), if applicable), the Prospectus and each amendment or
supplement thereto (except for the financial statements and other statistical or
financial data included therein as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements of the
1933 Act;
-12-
such counsel has no reason to believe that either the Registration Statement
(including the information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 43OA(b) and/or Rule 434(d), if
applicable) or the Prospectus, or the Registration Statement or the Prospectus
as amended or supplemented (except as aforesaid), as of their respective
effective or issue dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as amended or
supplemented, if applicable, as of the First Closing Date or the Second Closing
Date, as the case may be, contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made; the
statements in the Registration Statement and the Prospectus summarizing
statutes, rules and regulations are accurate and fairly and correctly present
the information required to be presented by the 1933 Act or the rules and
regulations thereunder, in all material respects and such counsel does not know
of any statutes, rules and regulations required to be described or referred to
in the Registration Statement or the Prospectus that are not described or
referred to therein as required; and such counsel does not know of any legal or
governmental proceedings pending or threatened required to be described in the
Prospectus which are not described as required, nor of any contracts or
documents of a character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement which are
not described or filed, as required;
(8) the statements under the captions "Certain Relationships and Related
Transactions," "Description of Capital Stock" and "Shares Eligible for Future
Sale" in the Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are accurate summaries and
fairly and correctly present, in all material respects, the information called
for with respect to such documents and matters;
(9) this Agreement and the Pricing Agreement and the performance of the
Company's obligations hereunder have been duly authorized by all necessary
corporate action and this Agreement and the Pricing Agreement have been duly
executed and delivered by and on behalf of the Company, and are legal, valid and
binding agreements of the Company, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights and by the exercise of judicial discretion in
accordance with general principles applicable to equitable and similar remedies
and except as to those provisions relating to indemnities for liabilities
arising under the 1933 Act as to which no opinion need be expressed; and no
approval, authorization or consent of any public board, agency, or
instrumentality of the United States or of any state or other jurisdiction is
necessary in connection with the issue or sale of the Shares by the Company
pursuant to this Agreement (other than under the 1933 Act applicable blue sky
laws and the rules of the NASD) or the consummation by the Company of any other
transactions contemplated hereby;
(10) the execution and performance of this Agreement will not contravene any
of the provisions of, or result in a default under, any agreement, franchise,
-13-
license, indenture, mortgage, deed of trust or other instrument known to
such counsel, of the Company or either of the Subsidiaries or by which the
property of any of them is bound and which contravention or default would be
material to the Company and the Subsidiaries taken as a whole; or violate
any of the provisions of the charter or bylaws of the Company or either of
the Subsidiaries or, so far as is known to such counsel, violate any
statute, order, rule or regulation of any regulatory or governmental body
having jurisdiction over the Company or either of the Subsidiaries;
(11) the Company is not an "investment company" or a person "controlled
by" an "investment company" within the meaning of the Investment Company
Act; and
(12) to such counsel's knowledge, all offers and sales of the capital
stock of the Company and the Subsidiaries since March 1, 1993 were at all
relevant times exempt from the registration requirements of the 1933 Act and
were duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue sky
laws.
In rendering such opinion, such counsel may state that they are relying
upon the certificate of ____________, the transfer agent for the Common Stock,
as to the number of shares of Common Stock at any time or times outstanding,
and that insofar as their opinion under clause (1) above relates to the accuracy
and completeness of the Prospectus and Registration Statement, it is based upon
a general review with the Company's representatives and independent accountants
of the information contained therein, without independent verification by such
counsel of the accuracy or completeness of such information, Such counsel may
also rely upon the opinions of other competent counsel and, as to factual
matters, on certificates and of officers of the Company and of state officials,
in which case their opinion is to state that they are so doing and copies of
said opinions or certificates are to be attached to the opinion unless said
opinions or certificates (or, in the case of certificates, the information
therein) have been furnished to the Representatives in other form.
(ii) Such opinion or opinions of Gardner, Carton & Douglas, counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as the
case may be, with respect to the incorporation of the Company, the validity of
the Shares to be sold by the Company, the Registration Statement and the
Prospectus and other ' related matters as you may reasonably require, and the
Company shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(iii) A certificate of the chief executive officer and the principal
financial officer of the Company, dated the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(1) the representations and warranties of the Company set forth in
Section 2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied with all the agreements and
satisfied all the
-14-
conditions on its part to be performed or satisfied at or prior to
such Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued, which order remains in
effect; and to the best knowledge of the respective signers, no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act,
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(iv) At the time the Pricing Agreement is executed and also on the
First Closing Date or the Second Closing Date, as the cast may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Deloitte & Touche LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement the second one to be dated the First Closing Date and
the third one (in the event of a second closing) to be dated the Second
Closing Date, to the effect set forth in Schedule B. There shall not
have been any change or decrease specified in the letters referred to
in this subparagraph which makes it impractical or inadvisable in the
judgment of the Representatives to proceed with the public offering or
purchase of the Shares as contemplated hereby.
(v) At the time the Pricing Agreement is executed, there
shall be delivered to you a letter from each stockholder, director and
executive officer of the Company identified in Schedule C hereto, in
which each such person agrees not to sell, contract to sell or
otherwise dispose of any Common Stock or securities convertible into
Common Stock (except Common Stock issued pursuant to currently
outstanding options) for a period of 365 days after the date of such
letter without the prior written consent of the Representatives.
(vi) Such further certificates and documents as you may reasonably
request.
All such opinion, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Gardner, Carton & Douglas, counsel for the Underwriters, which approval
shall not be unreasonably withheld. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the first Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without
liability on the part of any Underwriter or the Company, except for the expenses
to be paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and
except to the extent provided in Section 10 hereof.
-15-
SECTION 8. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 6
and Section 10 shall at all times be effective and shall apply.
SECTION 9. Effectiveness of Registration Statement. You and the Company will
use your and its best efforts to cause the Registration Statement to become
effective, if it has not yet become effective, and to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, including the information deemed
to be part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and/or Rule 434(d), if applicable, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, 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;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) 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 made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus, as then
amended or supplemented, to such person at or prior to the confirmation of the
sale of such Shares in any case where such delivery is required by the 1933 Act.
In addition to its other obligations under this Section 10(a), the Company
agrees that as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 10(a), it will reimburse the Underwriters on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later be held to have
-16-
been improper by a court of competent jurisdiction. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the Company,
each of its directors, and each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, 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 the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through Representatives specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by
the Company, or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 10(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 10(b), they will reimburse the Company on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying parties
may have conflicting interests which would make it inappropriate for the same
counsel to represent both of them, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defense and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to
-17-
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. 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 arising out
of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to an
indemnified party under paragraphs (a) or (b) hereof in respect of any losses,
claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares 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 that: relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion in the case of the
Company, as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, ne amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable, considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares 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 fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section are several in proportion to their respective
underwriting commitments and not joint.
-18-
(e) The provisions of this Section shall survive any termination of
this Agreement.
SECTION 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the Representatives may make arrangements satisfactory to the Company for
the purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such date. If any Underwriter or Underwriters so default
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representatives and the Company for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Company, except for the expenses to be paid by the Company pursuant to Section 6
hereof and except to the extent provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 12. Effective Date. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
of by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
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Sections 6 or 8 hereof and except to the extent provided in Section 10
hereof) or of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or United
States authorities, or (iii) there shall have been any change in financial
markets or in political, economic or financial conditions which, in the
reasonable opinion of the Representatives, either renders it impracticable
or inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus or materially and adversely affects the
market for the Shares, or (iv) there shall have been an outbreak of major
armed hostilities between the United States and any foreign power which in
the opinion of the Representatives makes it impractical or inadvisable to
offer or sell the Shares. Any termination pursuant to this paragraph (b)
shall be without liability on the part of any Underwriter to the Company or
on the part of the Company to any Underwriter (except for expenses to be
paid or reimbursed pursuant to Sections 6 or 8 hereof and except to the
extent provided in Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder.
SECTION 15. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o William Blair & Company, L.L.C., 222 West Adams,
Chicago, Illinois 60606, with a copy to Glenn W. Reed, Gardner, Carton &
Douglas, 321 North Clark Street, Chicago, Illinois 60610; if sent to the Company
will be mailed, delivered or telegraphed and confirmed to the Company at its
corporate headquarters with a copy to Wilson Neely, Simpson Thacher & Bartlett
425 Lexington Avenue, New York, NY 10017-3909.
SECTION 16. Successors. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 10,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchases.
SECTION 17. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters. Any action under or in respect of this
Agreement taken by William Blair & Company, L.L.C. will be binding upon the
other Representative.
SECTION 18. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not effect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 19. Applicable Law. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois.
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If the foregoing is in accordance with your understanding of our agreement
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
CII TECHNOLOGIES INC.
By:
--------------------------
Its:
--------------------------
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written,
WILLIAM BLAIR & COMPANY, L.L.C.
FURMAN SELZ L.L.C.
Acting as Representatives of the
several Underwriters named in
Schedule A.
By: William Blair & Company, L.L.C.
By:
-----------------------------
Partner
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SCHEDULE A
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
William Blair & Company, L.L.C.............
Furman Selz L.L.C..........................
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TOTAL
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