HARDINGE INC.
2,282,000 Shares
Common Stock
(Par Value $.01 Per Share)
---------------
UNDERWRITING AGREEMENT
New York, New York
May 25, 1995
WERTHEIM SCHRODER & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Wertheim Schroder & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Dear Sirs:
Hardinge Inc., a New York corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters"), an aggregate of 2,250,000
shares of Common Stock, par value $.01 per share (the "Common Stock"), and the
persons named in Schedule II hereto (collectively, the "Selling Shareholder")
proposes, subject to the terms and conditions stated herein, to sell to the
Underwriters an aggregate of 32,000 shares of Common Stock. The 2,282,000 shares
of Common Stock to be sold by the Company and the Selling Shareholder are herein
referred to as the "Firm Securities." In addition, the Company proposes to grant
to the Underwriters an option to purchase up to an additional 342,300 shares of
Common Stock (the "Option Securities"), on the terms and for the purposes set
forth in Section 2 hereof. The Firm Securities and the Option Securities are
herein collectively referred to as the "Securities." Except as may be expressly
set forth below, any reference to you in this Agreement shall be solely in your
capacity as the Representatives.
1A. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) The Company meets the requirements for use of Form S-2, and a
registration statement on Form S-2 (File No. 33-91644), including as a
part thereof a preliminary prospectus, in respect of the Securities, has
been filed with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered to you and, with the
exception of exhibits to the registration statement, to you for each of
the other Underwriters; if such registration statement has not become
effective, an amendment (the "Final Amendment") to such registration
statement, including a form of final prospectus, necessary to permit
such registration statement to become effective, will promptly be filed
by the Company with the Commission; if such registration statement has
become effective and any post-effective amendment to such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, which amendment or amendments you shall not
have reasonably objected to, the most recent such amendment has been
declared effective by the Commission; if such registration statement has
become effective, a final prospectus (the "Rule 430A Prospectus")
relating to the Securities containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the rules and
regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), will promptly be filed by the Company pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Act
(any preliminary prospectus filed as part of such registration statement
being herein called a "Preliminary Prospectus," such registration
statement as amended at the time that it becomes or became effective,
or, if applicable, as amended at the time the most recent post-effective
amendment to such registration statement filed with the Commission prior
to the execution and delivery of this Agreement became effective (the
"Effective Date"), including all exhibits thereto and all information
deemed to be a part thereof at such time pursuant to Rule 430A of the
rules and regulations of the Commission under the Act, being herein
called the "Registration Statement" and the final prospectus relating to
the Securities in the form first filed pursuant to Rule 424(b)(1) or (4)
of the rules and regulations of the Commission under the Act or, if no
such filing is required, the form of final prospectus included in the
Registration Statement, being herein called the "Prospectus"); any
reference herein to any Preliminary Prospectus or the Prospectus or the
Registration Statement shall be deemed to include any information
incorporated by reference therein pursuant to Item 12 of Form S-2 under
the Act, as of the date of such Preliminary Prospectus, the Prospectus
or the Registration Statement, as the case may be.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty
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shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein or to the description
of the Company's shareholder rights plan;
(c) On the Effective Date and the date the Prospectus is filed
with the Commission, and when any further amendment or supplements
thereto become effective, or are filed with the Commission, as the case
may be, the Registration Statement, the Prospectus and such amendment or
supplements did and will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through you expressly for use therein;
(d) The documents incorporated by reference in the Preliminary
Prospectus and the Prospectus pursuant to Item 12 of Form S-2 under the
Act, when they were filed with the Commission, conformed in all material
respects to the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the rules and regulations of the
Commission thereunder, and none of such documents contained an 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, in light of the circumstances under which they were made, not
misleading; since January 1, 1994, the Company has timely filed all
documents with the Commission which were required to be filed under the
Exchange Act and the rules and regulations of the Commission thereunder
on or prior to the date hereof;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New York, with power and authority (corporate and other) to own,
lease and operate its properties and to conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
property, or conducts any business, so as to require such qualification
(except where the failure to so qualify would not have a material
adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries,
taken as a whole); the Company's only subsidiaries are: Canadian
Hardinge Machine Tools, Ltd., Hardinge Machine Tools Ltd. and Hardinge
Brothers GmbH (collectively, the "Subsidiaries"), except for Hardinge
Brothers, Inc., Hardinge Credit Co., Inc., Hardinge Technologies
Systems, Inc., and Morrison Machine Products, Inc., which own no assets
and conduct no current business operations. Each
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Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own,
lease and operate its properties and to conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
property, or conducts any business, so as to require such qualification
(except where the failure to so qualify would not have a material
adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries,
taken as a whole); Hardinge Brothers GmbH's net sales during the year
ended December 31, 1994 were less than $1,000,000;
(f) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned by the Company
free and clear of all liens, encumbrances, equities, security interests
or claims (except for one share of capital stock of Hardinge Machine
Tools Ltd. ("Hardinge U.K.") that is owned by a director of that company
and except for a lien on the capital stock of Hardinge U.K. in favor of
Hardinge U.K.); and there are no outstanding options, warrants or other
rights calling for the issuance of, and, except as described in the
Prospectus, there are no commitments or arrangements to issue, any
shares of capital stock of any subsidiary or any security convertible or
exchangeable or exercisable for capital stock of any subsidiary; except
for the shares of stock of each subsidiary owned by the Company and the
Company's interest in Egret Aviation Co., neither the Company nor any
subsidiary owns, directly or indirectly, any shares of capital stock of
any corporation or have any equity interest in any firm, partnership,
joint venture, association or other entity;
(g) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by the Company of its obligations under this
Agreement have been duly and validly authorized by all requisite
corporate action of the Company; and this Agreement constitutes the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(h) Neither the Company nor any of its subsidiaries has sustained
since December 31, 1994, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which loss or interference is material to the Company
and its subsidiaries, taken as a whole; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been, and prior to the Time of Delivery (as
defined in Section 4 hereof) there will not be, any change in the
capital stock (other than shares issued in connection with the
Reclassification (defined below) and pursuant to exercise of director
stock options that the Prospectus indicates are outstanding and the
vesting rights with respect
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to restricted stock issued pursuant to the Company's 1988 and 1993
Restricted Stock Plans (collectively, the "Permitted Shares")) or
short-term debt or long-term debt of the Company or any of its
subsidiaries (other than borrowings under the Company's credit
facilities described in the Prospectus), or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(i) The Company and its subsidiaries have such title to all real
property and to all personal property owned by them as is necessary to
conduct their respective business as described in the Prospectus, in
each case free and clear of all liens, encumbrances and restrictions
except such as are described or contemplated by the Prospectus or are
not material to the Company and its subsidiaries, taken as a whole; and
any real property 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 to the Company and its subsidiaries,
taken as a whole;
(j) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement under the
caption "Capitalization", and all the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable, are free of any preemptive rights,
rights of first refusal granted by the Company or other similar rights,
were issued and sold in compliance with the applicable Federal and state
securities laws and conform in all material respects to the description
in the Prospectus; except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance
of, and there are no commitments or arrangements to issue, any shares of
capital stock of the Company or any security convertible or exchangeable
or exercisable for capital stock of the Company; there are no holders of
securities of the Company who, by reason of the filing of the
Registration Statement have the right (and have not waived such right)
to require the Company to include in the Registration Statement
securities owned by them; the Company has filed the amendment to its
Certificate of Incorporation contemplated in the Company's 1995 Proxy
Statement with the Department of State of the State of New York, and
each of the proposed amendments to the Company's Certificate of
Incorporation and By-laws described therein (including, without
limitation, the Reclassification (as defined therein)) has become
effective;
(k) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable, and will
conform in all material
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respects to the description thereof in the Prospectus; and the Common
Stock has been authorized for quotation on the Nasdaq National Market,
subject to notice of issuance; the Common Stock will be registered under
the Exchange Act at the Time of Delivery;
(l) The execution, delivery and performance of this Agreement,
the consummation of the transactions herein contemplated and the issue
and sale of the Securities and the compliance by the Company with all
the provisions of this Agreement will not conflict with, or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon, any of the property or assets of the Company
or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject; nor will
such action result in any violation of the provisions of the Certificate
of Incorporation or the By-Laws, in each case as amended to the date
hereof, of the Company or any of its subsidiaries; nor will such action
result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for the
issue and sale of the Securities or the consummation of the other
transactions contemplated by this Agreement, except the registration
under the Act of the Securities and under the Exchange Act of the Common
Stock, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or
Blue Sky laws or the by-laws of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and
distribution of the Securities by the Underwriters;
(m) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries or, to the best knowledge
of the Company, any of their respective officers or directors, is a
party or of which any property of the Company or any of its subsidiaries
is the subject, other than litigation or proceedings which would not
individually or in the aggregate have a material adverse effect on the
business, properties, condition (financial or otherwise), prospects or
results of operations of the Company and its subsidiaries, taken as a
whole; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened
or contemplated by others; and neither the Company nor any of its
subsidiaries is involved in any material labor dispute, nor, to the
Company's knowledge, is any material labor dispute threatened;
(n) The Company and its subsidiaries have such material licenses,
permits and other approvals or authorizations of and from governmental
or
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regulatory authorities ("Permits") as are necessary under applicable law
to own their respective properties and to conduct their respective
businesses in the manner now being conducted and as described in the
Prospectus and the Company and its subsidiaries have fulfilled and
performed in all material respects all of their respective obligations
with respect to such Permits, and no event has occurred which allows, or
after notice or lapse of time or both would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such Permits;
(o) Ernst & Young LLP who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Registration
Statement and the Prospectus, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder;
(p) (i) The consolidated financial statements and schedules of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the
financial condition, the results of operations and the cash flows of the
Company and its subsidiaries as of the dates and for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
otherwise stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus are accurately presented and, to the extent such information
and data are derived from the financial statements and books and records
of the Company and its subsidiaries, are prepared on a basis consistent
with such financial statements and the books and records of the Company
and its subsidiaries; no other financial statements or schedules are
required to be included in the Registration Statement and the
Prospectus;
(ii) The pro forma financial data of the Company included
in the Prospectus are based upon good faith estimates and assumptions
believed by the Company to be reasonable. No pro forma financial
information is required by the Act or the rules or regulations
thereunder to be included in the Registration Statement or the
Prospectus.
(q) There are no statutes or governmental regulations, or any
contracts or other documents that are required to be described in or
filed as exhibits to the Registration Statement which are not described
therein or filed or incorporated by reference as exhibits thereto; and
all such contracts to which the Company or any subsidiary is a party
have been duly authorized, executed and delivered by the Company or such
subsidiary;
(r) The Company and its subsidiaries own or possess adequate
patent rights or licenses or other rights to use patent rights,
inventions, trademarks,
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service marks, trade names, copyrights, technology and know-how
necessary to conduct their respective businesses in the manner now being
conducted; neither the Company nor any of its subsidiaries has received
any notice of infringement of or conflict with asserted rights of others
with respect to any patent, patent rights, inventions, trademarks,
service marks, trade names, copyrights, technology or know-how; and the
discoveries, inventions, products or processes of the Company and its
subsidiaries referred to in the Prospectus do not, to the Company's
knowledge, infringe or conflict with any patent or right of any third
party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party;
(s) Neither the Company nor any of its subsidiaries are in
violation of any term or provision of its Certificate of Incorporation
or By-Laws (or similar corporate constituent documents), in each case as
amended to the date hereof, or in violation in any material respect of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries; or in violation of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries;
(t) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, bank loan or credit agreement, a
material lease or other material agreement or material instrument to
which the Company or any of its subsidiaries is a party or by which any
of them or their respective properties is bound or may be affected;
(u) The Company and its subsidiaries have timely filed all
necessary tax returns and notices and have paid all federal, state,
county, local and foreign taxes of any nature whatsoever shown on its
tax returns as being due for all tax years through December 31, 1994, to
the extent such taxes have become due. The Company has no knowledge, or
any reasonable grounds to know, of any tax deficiencies which would have
a material adverse effect on the Company or any of its subsidiaries
taken as a whole; the Company and its subsidiaries, have paid all taxes
known to the Company which have become due, whether pursuant to any
assessments, or otherwise, and there is no further liability (whether or
not disclosed on such returns) or assessments for any such taxes, and no
interest or penalties accrued or accruing with respect thereto, except
as may be set forth or adequately reserved for in the financial
statements included or incorporated by reference in the Registration
Statement; the amounts currently set up as provisions for taxes or
otherwise by the Company and its subsidiaries on their books and records
are sufficient for the payment of all their unpaid federal, foreign,
state, county and local taxes accrued through the dates as of which they
speak, and for which the Company and its subsidiaries may be liable in
their own right, or as successor to any other corporation, association,
partnership, joint venture or other entity;
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(v) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets; and (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for current assets is compared with
existing current assets at reasonable intervals and appropriate action
is taken with respect to any differences;
(w) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any foreign, federal,
state or local law or regulation relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants, nor any federal or state law
relating to discrimination in the hiring, promotion or paying of
employees nor any applicable federal or state wages and hours laws, nor
any provisions of the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated thereunder, where
such violation would have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(x) None of the Company or its subsidiaries, or its officers,
directors or employees has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, or made any unlawful payment of funds of the Company
or any subsidiary or received or retained any funds in violation of any
law, rule or regulation;
(y) None of the Company or its subsidiaries, or its officers and
directors, have taken or will take, directly or indirectly, any action
designed to or which has constituted or that might be reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities; and
(z) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended.
1B. The Selling Shareholder represents and warrants to, and
agrees with, each of the Underwriters that:
(a) The Selling Shareholder has, and at the Time of Delivery (as
defined in Section 4 hereof) will have, good and valid title to the
Securities to be sold by the Selling Shareholder hereunder, free and
clear of any liens,
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encumbrances, equities, security interests, claims and other
restrictions of any nature whatsoever, and the Selling Shareholder has
the full legal right, power and authority, and any approval required by
law, to execute and deliver this Agreement and to sell, assign, transfer
and deliver the Securities being sold by the Selling Shareholder
hereunder and to make the representations, warranties, covenants and
agreements made by the Selling Shareholder in this Agreement; and upon
the delivery of and payment for such Securities as herein provided, the
several Underwriters will acquire good and valid title thereto, free and
clear of all liens, encumbrances, equities, security interests, claims
and other restrictions of any nature whatsoever;
(b) The Selling Shareholder has duly executed and delivered an
agreement and power of attorney (with respect to the Selling
Shareholder, the "Power-of-Attorney",) in the form heretofore delivered
to the Representatives, appointing Scott H. Garber and any other duly
authorized representative of Marine Midland Bank, as the Selling
Shareholder's attorneys-in-fact (the "Attorney-in-Fact") with authority
to execute, deliver and perform this Agreement on behalf of the Selling
Shareholder. Certificates in negotiable form, endorsed in blank or
accompanied by blank stock powers duly executed, with signatures
appropriately guaranteed, representing the Securities to be sold by the
Selling Shareholder hereunder have been deposited with the Company,
acting as custodian (the "Custodian") pursuant to a custody agreement
(the "Custody Agreement") for the purpose of delivery pursuant to this
Agreement. The Selling Shareholder has full power and authority to
execute and deliver the Custody Agreement and the Power-of-Attorney and
to perform its obligations thereunder. The Custody Agreement and the
Power-of-Attorney have been duly authorized, executed and delivered by
the Selling Shareholder, and this Agreement has been duly authorized,
executed and delivered by the Selling Shareholder or by the
Attorney-in-Fact pursuant to the Power-of-Attorney. This Agreement, the
Custody Agreement and the Power-of-Attorney are the legal, valid, and
binding obligations of the Selling Shareholder, enforceable against the
Selling Shareholder in accordance with their respective terms. The
Selling Shareholder agrees that each of the Securities represented by
the certificates on deposit with the Custodian is subject to the
interests of the Underwriters, the Company and the Selling Shareholder
hereunder, that the arrangements made for such custody, the appointment
of the Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement and to carry out
the terms of this Agreement, are to that extent irrevocable and that the
obligations of the Selling Shareholder hereunder shall not be
terminated, except as provided in this Agreement, the Custody Agreement
or the Power-of-Attorney, by any act of the Selling Shareholder, by
operation of law or otherwise, whether in the case of any individual
Selling Shareholder by the death or incapacity of the Selling
Shareholder, or in the case of a corporate or partnership Selling
Shareholder by its liquidation or dissolution or by the occurrence of
any other event. If any individual Selling Shareholder should die or
become incapacitated, or if any corporate or partnership Selling
Shareholder shall
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liquidate or dissolve, or if any other event should occur, before the
delivery of the Securities hereunder, the certificates for such
Securities deposited with the Custodian shall be delivered by the
Custodian in accordance with the respective terms and conditions of this
Agreement as if such death, incapacity, termination, liquidation or
dissolution or other event had not occurred, regardless of whether or
not the Custodian or the Attorney-in-Fact shall have received notice
thereof;
(c) Neither the execution and delivery or performance of this
Agreement or the Agreement, the Custody Agreement and the
Power-of-Attorney or the consummation of the transactions herein or
therein contemplated nor the compliance with the terms hereof or thereof
by the Selling Shareholder will conflict with, or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge,
claim or encumbrance on any property of the Selling Shareholder under,
any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Selling Shareholder is a party or by which the
Selling Shareholder's property is bound, or the charter documents or
by-laws or other organizational documents of such Selling Shareholder,
or any statute, ruling, judgment, decree order, or regulation of any
court or other governmental authority or any arbitrator having
jurisdiction over the Selling Shareholder. All consents, approvals,
authorizations, orders and qualification of or with any governmental
agency or body required for the sale of the Securities to be sold by the
Selling Shareholder or the consummation of the other transactions
contemplated by this Agreement have been obtained, except the
registration under the Act of the Securities and under the Exchange Act
of the Common Stock, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws or the by-laws of the NASD in
connection with the purchase and distribution of the Securities by the
Underwriters;
(d) The sale by the Selling Shareholder of Securities pursuant
hereto is not prompted by any adverse information concerning the Company
that is not set forth in the Registration Statement or the Prospectus;
(e) At the Time of Delivery, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold by the Selling
Shareholder to the several Underwriters hereunder will have been fully
paid or provided for by the Selling Shareholder and all laws imposing
such taxes will have been fully complied with; and
(f) The Selling Shareholder has read all information with respect
to the Selling Shareholder contained in the Prospectus and the
Registration Statement, and such information does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or
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necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of 2,250,000
Firm Securities, the Selling Shareholder agrees to sell to the several
Underwriters the number of Firm Securities set forth on Schedule II opposite the
name of the Selling Shareholder and each of the Underwriters agrees to purchase
from the Company and the Selling Shareholder, at a purchase price of $17.67 per
share, the respective aggregate number of Firm Securities determined in the
manner set forth below. The obligation of each Underwriter to the Company and
the Selling Shareholder, respectively, shall be to purchase that portion of the
number of shares of Common Stock to be sold by the Company or the Selling
Shareholder pursuant to this Agreement as the number of Firm Securities set
forth opposite the name of such Underwriter on Schedule I bears to the total
number of Firm Securities to be purchased by the Underwriters pursuant to this
Agreement, in each case adjusted by you such that no Underwriter shall be
obligated to purchase Firm Securities other than in 100 share amounts. In making
this Agreement, each Underwriter is contracting severally and not jointly.
In addition, subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters, as required (for the sole
purpose of covering over-allotments in the sale of the Firm Securities), up to
342,300 Option Securities at the purchase price per share of the Firm Securities
being sold by the Company as stated in the preceding paragraph. The right to
purchase the Option Securities may be exercised by your giving 48 hours' prior
written or telephonic notice (subsequently confirmed in writing) to the Company
of your determination to purchase all or a portion of the Option Securities.
Such notice may be given at any time within a period of 30 calendar days
following the date of this Agreement. Option Securities shall be purchased
severally for the account of each Underwriter in proportion to the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule I
hereto. No Option Securities shall be delivered to or for the accounts of the
Underwriters unless the Firm Securities shall be simultaneously delivered or
shall theretofore have been delivered as herein provided. The respective
purchase obligations of each Underwriter shall be adjusted by you so that no
Underwriter shall be obligated to purchase Option Securities other than in 100
share amounts. The Underwriters may cancel any purchase of Option Securities at
any time prior to the Option Securities Delivery Date (as defined in Section 4
hereof) by giving written notice of such cancellation to the Company.
3. The Underwriters propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company and the Selling Shareholder to you for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official
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bank check or checks, payable in New York Clearing House funds, to the order of
the Company, for the purchase price of the Firm Securities being sold by the
Company, and to the order of Marine Midland Bank for the purchase price of the
Firm Securities being sold by the Selling Shareholder, at the office of Wertheim
Schroder & Co. Incorporated, Equitable Center, 787 Seventh Avenue, New York, New
York, at 9:30 A.M., New York City time, on June 2, 1995, or at such other time,
date and place as you and the Company may agree upon in writing, such time and
date being herein called the "Time of Delivery."
Certificates in definitive form for the Option Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price thereof by certified or
official bank check or checks, payable in New York Clearing House funds, to the
order of the Company, for the purchase price of the Option Securities, in New
York, New York, at such time and on such date (not earlier than the Time of
Delivery nor later than ten business days after giving of the notice delivered
by you to the Company with reference thereto) and in such denominations and
registered in such names as shall be specified in the notice delivered by you to
the Company with respect to the purchase of such Option Securities. The date and
time of such delivery and payment are herein sometimes referred to as the
"Option Securities Delivery Date." The obligations of the Underwriters shall be
subject, in their discretion, to the condition that there shall be delivered to
the Underwriters on the Option Securities Delivery Date opinions and
certificates, dated such Option Securities Delivery Date, referring to the
Option Securities, instead of the Firm Securities, but otherwise to the same
effect as those required to be delivered at the Time of Delivery pursuant to
Sections 7(d), 7(e), 7(f), 7(h), 7(i) and 7(l).
Certificates for the Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to the
Time of Delivery and the Option Securities Delivery Date, respectively. Such
certificates will be made available for checking and packaging in New York, New
York, at least 24 hours prior to the Time of Delivery and Option Securities
Delivery Date.
5. (a) The Company covenants and agrees with each of the Underwriters:
(i) If the Registration Statement has not become
effective, to file promptly the Final Amendment with the
Commission and use its best efforts to cause the Registration
Statement to become effective; if the Registration Statement has
become effective, to file promptly the Rule 430A Prospectus with
the Commission; to make no further amendment or any supplement to
the Registration Statement or Prospectus to which you shall
reasonably object after reasonable notice thereof; to advise you,
promptly after it receives notice thereof of the time when the
Registration Statement, or any amendment thereto, or any amended
Registration Statement has become effective or any supplement to
the Prospectus or
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any amended Prospectus has been filed, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any
stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
withdrawal of such order;
(ii) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as you may
request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(iii) To furnish each of the Representatives and counsel
for the Underwriters, without charge, signed copies of the
registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including all
exhibits thereto) and to each other Underwriter a conformed copy
of such registration statement and each amendment thereto (in
each case without exhibits thereto) and, so long as a prospectus
relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus, the
Prospectus and all amendments or supplements thereto as you may
from time to time reasonably request. If at any time when a
prospectus is required to be delivered under the Act an event
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to
comply with the Act, the Company will notify you and forthwith
prepare and, subject to the provisions of Section 5(a) hereto,
file with the Commission an appropriate supplement or amendment
thereto, and will furnish to each Underwriter and to any dealer
in securities, without charge, as many copies as you may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
admission or effect such compliance in accordance with the
requirements of Section 10 of the Act; and in case any
Underwriter is required to deliver a prospectus in
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connection with sales of any of the Securities at any time 15
months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(iv) To make generally available to its shareholders as
soon as practicable, but in any event not later than 45 days
after the close of the period covered thereby, an earning
statement in form complying with the provisions of Section 11(a)
of the Act covering a period of 12 consecutive months beginning
not later than the first day of the Company's fiscal quarter next
following the Effective Date;
(v) To file promptly all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act subsequent to the Effective Date and during any
period when the Prospectus is required to be delivered;
(vi) For a period of five years from the Effective Date,
to furnish to its shareholders after the end of each fiscal year
an annual report (including a consolidated balance sheet and
statements of income, cash flow and shareholders' equity of the
Company and its subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the Effective Date), consolidated
summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(vii) During a period of five years from the Effective
Date, to furnish to you copies of all reports or other
communications (financial or other) furnished to its
shareholders, and deliver to you (i) a reasonable time after they
are so furnished or filed, copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange or automated quotation system on
which any class of securities of the Company is listed or quoted;
and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time
reasonably request in connection with your obligations hereunder,
other than information which is subject to a confidentiality
agreement and other information, the disclosure of which to any
third party the Company reasonably believes may adversely impact
its competitive position;
(viii) To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus under the
caption "Use of Proceeds";
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(ix) That it will not, and will cause its subsidiaries,
officers and directors not to, take, directly or indirectly, any
action designed to cause or result in, or that might reasonably
be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Securities;
(x) That prior to the Time of Delivery there will not be
any change in the capital stock (other than with respect to
Permitted Shares) or material change in the short-term debt or
long-term debt of the Company or any of its subsidiaries (other
than borrowings under the Company's credit facilities described
in the Prospectus), or any material adverse change, or any
development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company or
any of its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(xi) That it will not, and will cause each of its
directors and officers, the Selling Shareholder and other
shareholders of the Company holding an aggregate of 3,234,432
shares of Common Stock (the "Other Shareholders") to enter into
agreements with you, in form and substance satisfactory to you,
to the effect that they will not, during the period of 180 days
after the date hereof (other than pursuant to this Agreement),
offer to sell, sell, contract to sell, pledge or otherwise
dispose of any capital stock of the Company (or securities
convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, without the prior written
consent of Wertheim Schroder & Co. Incorporated, except (x) in
the case of the Company, for grants of restricted stock under the
Company's Stock Incentive Plan up to the amount reserved for such
issuances disclosed in the Prospectus or pursuant to the terms of
convertible securities of the Company outstanding on the date
hereof, (y) in the case of the persons executing the agreements
referred to above, for the transfer of Common Stock by gift
subject to the condition that the donee of such Common Stock
agrees to be bound by the restrictions on transfer described
above and (z) in the case of Chemung Canal Trust Company
("Chemung"), subject to the condition that Chemung may make
distributions to estate or trust beneficiaries, but only in the
event that such distributions are required upon an estate's or
trust's termination in accordance with the terms of the governing
instrument;
(xii) That it will use its best efforts to maintain the
quotation of the Common Stock on the Nasdaq National Market; and
(xiii) To file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 under the Act.
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(b) The Selling Shareholder covenants and agrees with each of the
Underwriters that:
(i) The Selling Shareholder will not, during the period of
180 days after the date hereof, except pursuant to this
Agreement, offer to sell, sell, contract to sell, pledge or
otherwise dispose of any capital stock of the Company (or
securities convertible into, or exchangeable for, capital stock
of the Company), directly or indirectly, without the prior
written consent of Wertheim Schroder & Co. Incorporated, except
for the transfer of Common Stock by gift subject to the condition
that the donee of such Common Stock agrees to be bound by the
restrictions on transfer described above;
(ii) The Selling Shareholder will not, directly or
indirectly, take any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities;
(iii) As soon as any of the individual trustees of the
Selling Shareholder are advised thereof, the Selling Shareholder
will advise the Representatives and confirm such advice in
writing, (i) of receipt by the Selling Shareholder or by any
representative or agent of the Selling Shareholder, of any
communication from the Commission relating to the Registration
Statement, the Prospectus or any Preliminary Prospectus, or any
notice or order of the Commission relating to the Company or the
Selling Shareholder in connection with the transactions
contemplated by this Agreement and (ii) of the happening of any
event which makes or may make any statement made in the
Registration Statement, the Prospectus or any Preliminary
Prospectus untrue or that requires the making of any change in
the Registration Statement, Prospectus or Preliminary Prospectus,
as the case may be, in order to make such statement, in light of
the circumstances in which it was made, not misleading; and
(iv) The Selling Shareholder will deliver to the
Representatives prior to the Time of Delivery a properly
completed and executed United States Treasury Department Form
W-9.
(v) The Selling Shareholder covenants and agrees that it
will pay for the fees, disbursements and expenses of its counsel.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid: (i) the fees, disbursements and
expenses of counsel and accountants for the Company and all other expenses, in
connection with the preparation, printing and filing of the Registration
Statement and the Prospectus
-17-
and amendments and supplements thereto and the furnishing of copies thereof,
including charges for mailing, air freight and delivery and counting and
packaging thereof and of any Preliminary Prospectus and related offering
documents to the Underwriters and dealers; (ii) the cost of printing this
Agreement, the Agreement Among Underwriters, the Selling Agreement,
communications with the Underwriters and selling group, the Canadian Private
Offering Memorandum and the Preliminary and Supplemental Blue Sky Memoranda and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under securities laws as provided in
Section 5(a)(ii) hereof, including filing and registration fees and the fees,
disbursements and expenses for counsel for the Underwriters in connection with
such qualification and in connection with Blue Sky surveys or similar advice
with respect to sales; (iv) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (v) all fees and expenses in connection
with quotation of the Securities on the Nasdaq National Market; and (vi) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section 6,
including the fees of the Company's Transfer Agent and Registrar, the cost of
any stock issue or transfer taxes on sale of the Securities to the Underwriters,
the cost of the Company's personnel and other internal costs, the cost of
printing and engraving the certificates representing the Securities and all
expenses and taxes incident to the sale and delivery of the Securities to be
sold by the Company and the Selling Shareholder to the Underwriters hereunder.
The Selling Shareholder will pay any transfer taxes incident to the transfer to
the Underwriters of the Securities being sold by such Selling Shareholder.
It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and the Selling Shareholder herein are, at and
as of the Time of Delivery, true and correct, the condition that the Company and
the Selling Shareholder shall have performed all its and their obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Registration Statement shall have become effective, and
you shall have received notice thereof not later than 12:00 Noon, New
York City time, on the first full business day following the date of
execution of this Agreement, or at such other time as you and the
Company may agree; if required, the Prospectus shall have been filed
with the Commission in the manner and within the time period required by
Rule 424(b); no stop order suspending the effectiveness of the
Registration Statement shall have been issued
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and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to your reasonable satisfaction;
(b) All corporate proceedings and related legal and other matters
in connection with the organization of the Company and the registration,
authorization, issue, sale and delivery of the Securities shall have
been reasonably satisfactory to Fulbright & Jaworski L.L.P., counsel to
the Underwriters, and Fulbright & Jaworski L.L.P. shall have been timely
furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subsection;
(c) You shall not have advised the Company or any Selling
Shareholder that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact or
omits to state a fact which in your judgment is in either case material
and in the case of an omission is required to be stated therein or is
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) Shearman & Sterling, special counsel to the Company, shall
have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New York;
(ii) The Securities being sold by the Company have been
duly authorized and, when duly countersigned by the Company's
Transfer Agent and Registrar and issued, delivered and paid for
in accordance with the provisions of the Registration Statement
and this Agreement, will be validly issued, fully paid and
non-assessable, and such shares are not subject to the preemptive
rights of any shareholder; the Securities conform in all material
respects to the description thereof in the Prospectus; and the
certificates for the Securities comply as to form with the laws
of the State of New York;
(iii) The Securities being sold by the Selling Shareholder
have been duly authorized and validly issued and are fully paid
and non-assessable; and none of such Securities was issued in
violation of the preemptive rights of any shareholder of the
Company;
(iv) All of the other outstanding shares of capital stock
of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding
shares of capital stock
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of the Company was issued in violation of the preemptive rights
of any shareholder of the Company;
(v) The Company has an authorized capitalization as set
forth in the Registration Statement under the caption
"Description of Capital Stock";
(vi) The Common Stock has been authorized for quotation on
the Nasdaq National Market, subject to notice of issuance; the
Common Stock has been registered under the Exchange Act;
(vii) The Company has full corporate power and authority
to execute, deliver and perform its obligations under this
Agreement; this Agreement has been duly authorized, executed and
delivered by the Company; and this Agreement constitutes the
legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
enforceability of the same may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting creditors' rights generally and
except as enforceability of those provisions relating to
indemnity may be limited by the Federal securities laws,
principles of public policy and general principles of equity
(regardless of whether enforcement is considered in a proceeding
in equity or at law);
(viii) The execution, delivery and performance of this
Agreement, the consummation of the transactions herein
contemplated and the issue and sale of the Securities and the
compliance by the Company with all of the provisions of this
Agreement will not violate the provisions of the Certificate of
Incorporation or the By-laws of the Company, as amended to the
date hereof or, to the best knowledge of such counsel, any
existing applicable law, rule or regulation (other than the Act
or the securities or blue sky laws of the various states, as to
which such counsel need express no opinion);
(ix) All outstanding shares of the Company's Class A
Common Stock, par value $5.00 per share, and Class B Common
Stock, par value $5.00 per share, were converted into shares of
Common Stock at the ratios of 2.00 to 1 and 2.05 to 1,
respectively, pursuant to an amendment (the "Amendment") to the
Company's Certificate of Incorporation which was filed with the
Secretary of State of the State of New York and became effective
on May 24, 1995. The filing of the Amendment with the Department
of State of the State of New York was duly authorized by the
Company and its shareholders and the Amendment complied in all
respects with applicable law; and
-20-
(x) No consent, approval, authorization, order,
registration or qualification of or with any court or any
regulatory authority or other governmental body is required for
the issue and sale of the Securities or the consummation of the
other transactions contemplated by this Agreement, except such as
have been obtained under the Act and the Exchange Act, or may be
required under state or foreign securities or blue sky laws or
the by-laws of the NASD in connection with the purchase and
distribution of the Securities by the Underwriters;
(xi) The Registration Statement has become effective under
the Act, the Prospectus has been filed in accordance with Rule
424(b) of the rules and regulations of the Commission under the
Act, including the applicable time periods set forth therein, or
such filing is not required and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending under the Act;
the Registration Statement, the Prospectus, excluding documents
incorporated by reference therein, and each amendment or
supplement thereto (other than the financial statements and
related schedules and other financial or statistical data
included therein or omitted therefrom, as to which such counsel
need express no opinion), as of their respective effective or
issue dates, appear on their face to conform in all material
respects to the requirements of the Act and the rules and
regulations thereunder; the documents incorporated by reference
in the Prospectus (other than the financial statements and
related schedules and other financial or statistical data
included therein or omitted therefrom, as to which such counsel
need express no opinion, and except to the extent that any
statement therein is modified or superseded in the Prospectus),
as of the dates they were filed with the Commission, appear on
their face to conform in all material respects to the
requirements of the Exchange Act and the rules and regulations
thereunder.
(xii) To the extent summarized therein, all contracts and
agreements summarized in the Registration Statement and the
Prospectus (other than those under the caption "Management", as
to which such counsel need not give an opinion) are fairly
summarized therein and conform in all material respects to the
descriptions thereof contained therein and, to the extent such
summarized contracts or agreements are required under the Act or
the rules and regulations thereunder to be filed as exhibits to
the Registration Statement or incorporated by reference therein,
they have been filed or incorporated by reference; and such
counsel does not know of any contracts or other documents
required to be so summarized or disclosed in the Prospectus or
filed as an exhibit to the Registration Statement or incorporated
by reference therein that have not been so summarized or
disclosed, or filed as an exhibit or incorporated by reference as
required (excluding contracts or other documents that would
-21-
be summarized or disclosed under the caption "Management" or, in
the case of exhibits, that pertain to matters covered under the
caption "Management").
(xiii) All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings are fair
summaries thereof and fairly present the information required to
be shown with respect to such matters;
Such counsel shall also state that nothing has come to such counsel's
attention that would lead such counsel to believe that either the Registration
Statement or any amendment or supplement thereto (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom), at the time such Registration Statement or amendment or supplement
became effective, or the Prospectus or any amendment or supplement thereto
(except for the financial statements and other financial or statistical data
included therein or omitted therefrom), as of its date and as of the Time of
Delivery, contains or contained any untrue statement of material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
In rendering their opinions set forth in Section 7(d) above, such
counsel may (a) rely as to factual matters, upon certificates of public
officials and officers of the Company, and (b) state that they express no
opinion as to the laws of any jurisdiction other than the law of the State of
New York and the federal laws of the United States;
(e) Sayles, Evans, Brayton, Palmer & Tifft, counsel to the Company,
shall have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New York and is qualified to do business and is in good
standing in each jurisdiction in which its ownership or leasing
of properties requires such qualification or the conduct of its
business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the
business, properties, condition (financial or otherwise),
prospects or results of operations of the Company and its
subsidiaries, taken as a whole; and the Company has all necessary
corporate power and, to the best knowledge of such counsel, all
material governmental authorizations, permits and approvals
required under such laws to own, lease and operate its properties
and conduct its business as described in the Prospectus;
(ii) All the outstanding shares of capital stock of each
of the subsidiaries are owned by the Company of record and to the
knowledge
-22-
of such counsel, (A) beneficially and (B) free and clear of any
security interest, adverse claim of any nature whatsoever or
encumbrance; to the knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the
issuance of, and there are no commitments or arrangements to
issue, any shares of capital stock of any subsidiary (other than
to the Company);
(iii) The Company has an authorized capitalization as set
forth in the Registration Statement under the caption
"Description of Capital Stock"; except as described in the
Prospectus, to the knowledge of such counsel, there are no
outstanding options, warrants or other rights calling for the
issuance of, and there are no commitments, plans or arrangements
to issue any shares of, capital stock of the Company; the
Securities conform in all material respects to the description
thereof in the Prospectus;
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
the subsidiaries is a party or of which any property of the
Company or any of the subsidiaries is the subject which, if
determined adversely to the Company or any subsidiary, would
individually or in the aggregate have a material adverse effect
on the consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken
as a whole;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The execution, delivery and performance of this
Agreement, the consummation of the transactions herein
contemplated and the issue and sale of the Securities and the
compliance by the Company with all the provisions of this
Agreement will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge, claim
or encumbrance upon, any of the property or assets of the Company
or any subsidiary pursuant to, the terms of any indenture,
mortgage, deed of trust, loan agreement or other material
agreement or material instrument known to such counsel to which
the Company or any subsidiary is a party or by which the Company
or any subsidiary is bound or to which any of the property or
assets of the Company or any subsidiary is subject, or to the
best knowledge of such counsel, result in any violation of any
statute or any order, rule or regulation (other than the federal
and foreign securities laws or blue sky laws of the various
states, as to which such counsel need express no opinion) known
to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any
-23-
subsidiary or any of their properties, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any subsidiary;
(vii) To the best of such counsel's knowledge, neither the
Company nor any subsidiary is currently (A) in violation of its
Certificate of Incorporation or By-laws (or similar corporate
constituent documents), in each case as amended to the date
hereof; or (B) in default under any indenture, mortgage, deed of
trust, lease, bank loan or credit agreement or any material other
agreement or material instrument of which such counsel has
knowledge to which the Company or any subsidiary is a party or by
which any of them or any of their property may be bound, or in
violation of any law, ordinance, rule or regulation applicable to
the Company or any of its subsidiaries, or of any decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries (except for such defaults or
violations, either individually or in the aggregate, which will
not have a material adverse effect on the business, properties,
condition (financial or otherwise) or results of operations of
the Company and its subsidiaries, taken as a whole);
(viii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any Securities pursuant to the Company's
Certificate of Incorporation or By-Laws, in each case as amended
to the date hereof, or any agreement or other instrument known to
such counsel; and, to such counsel's knowledge, no holders of
securities of the Company (other than the Selling Shareholder)
have rights to the registration thereof under the Registration
Statement or, if any such holders have such rights, such holders
have waived such rights;
(ix) To the extent summarized therein, all contracts and
agreements summarized in the Registration Statement and the
Prospectus under the caption "Management" are fairly summarized
therein and conform in all material respects to the descriptions
thereof contained therein; and such counsel does not know of any
contracts or other documents required to be summarized or
disclosed under such caption which have not been so summarized or
disclosed nor of any contracts or other documents pertaining to
matters covered under such caption that are required to be filed
as an exhibit to the Registration Statement or incorporated by
reference therein that have not been so filed as required or
incorporated by reference;
(ix) Hardinge Machine Tools Limited ("Hardinge U.K.") is a
company duly incorporated in England under the Companies Act 1929
and registered in England and Wales;
-24-
(x) A search made on June 2, 1995 at the Companies
Registry revealed no order or resolution for the winding up or
order for the administration of Hardinge U.K. and no notice for
the appointment of a receiver or an administrative receiver. The
High Court of Justice has confirmed orally in response to our
inquiry made on June 2, 1995 that they have no record of any
petition for the winding up of Hardinge U.K. having been
presented;
(xi) An inspection of Hardinge U.K.'s statutory books made
on June 2, 1995 and a search made on May 22, 1995 at Companies
House, revealed Hardinge U.K.'s authorized share capital to be
231,390 pounds, divided into 231,390 ordinary shares of 1 pound
each, and its issued share capital (the "Issued Shares") to be
131,390 pounds divided into 131,390 ordinary shares of 1 pound
each. Of the Issued Shares, 131,389 were shown in the Register of
Members as being registered in the name of Hardinge Brothers,
Inc. and one was shown to be registered in the name of Robert
Duxbury, a director of Hardinge U.K.;
(xii) Our inspection of Hardinge U.K.'s statutory books
and records revealed that the issue of the Issued Shares was duly
authorized and the Issued Shares are validly issued and fully
paid or credited as fully paid and, accordingly, no further
contributions in respect of such Issued Shares will be required
by the holders thereof by virtue only of it being such a holder.
Such counsel shall also state that while such counsel does not express
any opinion concerning, and does not assume any responsibility for, the
accuracy, completeness (including, without limitation, omission of information),
or fairness of the statements contained in the Registration Statement or the
Prospectus, and has not independently verified the accuracy, completeness
(including, without limitation, omission of information) or fairness of such
statements, nothing has knowingly come to such counsel's attention that has led
such counsel to believe that either the Registration Statement or any amendment
or supplement thereto (excluding the financial statements and other financial or
statistical data included therein or omitted therefrom), at the time such
Registration Statement or amendment or supplement became effective, or the
Prospectus or any amendment or supplement thereto (excluding the financial
statements and other financial or statistical data included therein or omitted
therefrom), as of its date and as of the Time of Delivery, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
In rendering their opinions set forth in Section 7(e) above, such
counsel may (a) rely as to factual matters, upon certificates of public
officials and officers of the Company, (b) state that they express no opinion as
to (i) the laws of any jurisdiction other than the law of the State of New York
and the federal laws of the United States
-25-
or (ii) the federal securities laws, foreign securities laws and the blue sky
laws of the various states (and the rules and regulations under any of said
laws) or other law relating to the sale of securities (other than the Business
Corporation Law of the State of New York and the other laws relating to
corporate governance generally) in connection with or in any way related to the
issue and sale of the Securities, and (c) rely as to laws of any jurisdiction
other than the United States and jurisdictions in which they are admitted, on
opinions of counsel (provided, however, that you shall have received a copy of
each such opinion which shall be dated the Time of Delivery and Sayles, Evans,
Brayton, Palmer & Tifft in its opinion to you delivered pursuant to this
subsection, shall state that such counsel are satisfactory to them and Sayles,
Evans, Brayton, Palmer & Tifft has no reason to believe that they are not
justified to so rely);
(f) Borden & Elliot, special Canadian counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) Canadian Hardinge Machine Tools Ltd. ("Hardinge
Canada") has been duly incorporated and organized under the laws
of Ontario, Canada, and has not been dissolved;
(ii) Hardinge Canada is qualified to do business and is in
good standing in each jurisdiction in which its ownership or
leasing of properties require such qualification or the conduct
of its business requires such qualification (except where the
failure to so qualify would not have a material adverse effect on
the business or properties of Hardinge Canada (financial or
otherwise), the prospects or results of Hardinge Canada and its
subsidiaries taken as a whole; and Hardinge Canada has all
necessary corporate power and all material government
authorizations, permits and approvals required to own, lease and
operate its properties and to conduct its business as currently
being conducted;
(iii) All of the issued and outstanding shares of Hardinge
Canada have been duly authorized and are validly issued and
outstanding, fully paid and non-assessable and are owned by
Hardinge Brothers, Inc. of record, and to the best of our
knowledge are (A) beneficially owned by Hardinge Brothers, Inc.
and (B) free and clear of all liens, encumbrances, equities,
security interest or claims of any nature whatsoever. To such
counsel's knowledge, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue any shares of
Hardinge Canada.
In rendering their opinions set forth in Section 7(f) above, such
counsel may rely, to the extent deemed advisable by such counsel, (a) as to
factual matters, upon certificates of public officials and officers of Hardinge
Canada; and (b) as to the laws of any jurisdiction other than Canada and
jurisdictions in which they are admitted;
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(g) With respect to the Selling Shareholder, Hancock & Estabrook,
counsel for the Selling Shareholder, shall have furnished to you their
written opinion, dated the Time of Delivery, in form and substance
satisfactory to you and to Fulbright & Jaworski L.L.P. to the effect
that:
(i) The Selling Shareholder has the full legal right,
power and authority to enter into this Agreement, the Custody
Agreement and the Power-of-Attorney and to sell, transfer and
deliver the Securities being sold by the Selling Shareholder
hereunder in the manner provided in this Agreement and to perform
its obligations under the Custody Agreement and the
Power-of-Attorney; this Agreement has been duly authorized,
executed and delivered by the Selling Shareholder or on behalf of
the Selling Shareholder by the Attorney-in-Fact; the Custody
Agreement and the Power-of-Attorney have been duly authorized,
executed and delivered by the Selling Shareholder; this
Agreement, the Custody Agreement and the Power-of-Attorney
constitute the legal, valid and binding obligations of the
Selling Shareholder, enforceable in accordance with their
respective terms, except as enforcement of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(ii) upon delivery of and payment for the Securities being
sold by the Selling Shareholder, the several Underwriters will
receive good and valid title to such Securities, free and clear
of all liens, encumbrances, equities, security interests, claims
or other defects;
(iii) the sale of the Securities to the Underwriters by
the Selling Shareholder pursuant to this Agreement, the
compliance by the Selling Shareholder with the other provisions
of this Agreement, the Custody Agreement and the
Power-of-Attorney and the consummation of the other transactions
herein and therein contemplated do not (i) conflict with, or
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, claim or encumbrance
on any property of the Selling Shareholder under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument
known to such counsel to which the Selling Shareholder is a party
or by which the Selling Shareholder or any of the Selling
Shareholder's property is bound, or the certificate of
incorporation or by-laws or similar organizational documents of
the Selling Shareholder, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Selling
Shareholder, or (ii) require the consent, approval,
authorization, order, registration or qualification of or with
any governmental authority, except such as have been obtained and
such as may be required under the
-27-
Act and such as may be required under state or foreign
securities, Blue Sky laws, or the by-laws of the NASD in
connection with the purchase and distribution of such Securities
by the Underwriters; and
(iv) there are no stock transfer taxes (other than income
taxes) known to such counsel payable in connection with the sale
and delivery of the Securities by the Selling Shareholder to the
several Underwriters or all such taxes have been fully paid in
connection with such sale and delivery.
In rendering such opinion, such counsel may rely, to the extent deemed
advisable by such counsel, (a) as to factual matters, upon certificates of
public officials and the Selling Shareholder and (b) upon certificates of state
officials.
(h) Fulbright & Jaworski L.L.P., counsel to the Underwriters,
shall have furnished to you their written opinion or opinions, dated the
Time of Delivery, in form and substance satisfactory to you, with
respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(i) At the time this Agreement is executed and also at the Time
of Delivery, Ernst & Young LLP shall have furnished to you a letter or
letters, dated the date of this Agreement and the Time of Delivery, in
form and substance satisfactory to you, to the effect, that:
(i) They are independent accountants with respect to the
Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion the consolidated financial
statements of the Company and its subsidiaries (including the
related schedules and notes) included or incorporated by
reference in the Registration Statement and Prospectus and
covered by their reports included or incorporated by reference
therein comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange
Act, as applicable and the published rules and regulations
thereunder;
(iii) On the basis of specified procedures as of a
specified date not more than five days prior to the date of their
letter (which procedures do not constitute an examination made in
accordance with generally accepted auditing standards),
consisting of a reading of the latest available unaudited interim
consolidated financial statements of the Company and its
subsidiaries, a reading of the latest available minutes of any
meeting of the Board of Directors and shareholders of the Company
and its
-28-
subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its
subsidiaries who have responsibility for financial and accounting
matters, and such other procedures or inquiries as are specified
in such letter, nothing came to their attention that caused them
to believe that:
(A) The unaudited consolidated financial statements
of the Company and its subsidiaries included in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of
the Act and the rules and regulations promulgated
thereunder or are not presented in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than five days
prior to the date of their letter, there was any change in
the capital stock, or the long-term debt or short-term
debt of the Company and its subsidiaries on a consolidated
basis, or any decrease in total assets, net current
assets, net assets or shareholders' equity or other items
specified by the Representatives, of the Company and its
subsidiaries on a consolidated basis, each as compared
with the amounts shown on the March 31, 1995 consolidated
balance sheet included in the Registration Statement and
the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred
or may occur or such other changes, decreases or increases
which are described in their letter and which do not, in
the sole judgment of the Representatives, make it
impractical or inadvisable to proceed with the purchase
and delivery of the Securities as contemplated by the
Registration Statement; and
(C) for the period from April 1, 1995 to a
specified date not more than five days prior to the date
of such letter, there was any decrease, as compared with
the corresponding period of the preceding fiscal year, in
the following consolidated amounts: net sales, income from
operations, income before provision for income taxes, net
income or net income per share of the Company and its
subsidiaries except in all instances for decreases which
the Registration Statement discloses have occurred or may
occur; or such other decreases which are described in
their letter and which do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to
proceed with the purchase and
-29-
delivery of the Securities as contemplated by the
Registration Statement; and
(iv) in addition to the examination referred to in their
reports included in the Registration Statement and the Prospectus
and the limited procedures referred to in clause (iii) above,
they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information specified by the
Representatives, which are derived from the general accounting
records of the Company and its subsidiaries which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to,
(a) the Registration Statement, (b) the Company's Annual Report
on Form 10-K for the year ended December 31, 1994 (including the
information from the Company's 1995 Proxy Statement incorporated
by reference therein), and (c) the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, and have compared
such amounts and financial information with the accounting
records of the Company and its subsidiaries, and have found them
to be in agreement and have proved the mathematical accuracy of
certain specified percentages.
(j) Neither the Company nor any of the subsidiaries shall have
sustained since December 31, 1994, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference is material to the
Company and its subsidiaries, taken as a whole, other than as set forth
or contemplated in the Prospectus; and since the respective dates as of
which information is given in the Prospectus, there shall not have been
any change in the capital stock (other than shares issued in connection
with the Reclassification and Permitted Shares) or short-term debt or
long-term debt of the Company or any of its subsidiaries (other than
borrowings under its credit facilities which facilities are disclosed in
the Prospectus) nor any change or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case is
in your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus;
(k) Between the date hereof and the Time of Delivery there shall
have been no declaration of war by the Government of the United States;
at the Time of Delivery there shall not have occurred any material
adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which is such as to make
-30-
it, in the judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the resale of Securities and no
event shall have occurred resulting in (i) trading in securities
generally on the New York Stock Exchange or in the Common Stock on the
principal securities exchange or market in which the Common Stock is
listed or quoted being suspended or limited or minimum or maximum prices
being generally established on such exchange[s] or market, or (ii)
additional material governmental restrictions, not in force on the date
of this Agreement, being imposed upon trading in securities generally by
the New York Stock Exchange or in the Common Stock on the principal
securities exchange or market in which the Common Stock is listed or
quoted or by order of the Commission or any court or other governmental
authority, or (iii) a general banking moratorium being declared by
either Federal or New York authorities;
(l) The Company and the Selling Shareholder shall have furnished
or caused to be furnished to you at the Time of Delivery certificates
signed by the chief executive officer and the chief financial officer,
on behalf of the Company, and by the Selling Shareholder or the
Attorney-in-Fact on behalf of the Selling Shareholder, satisfactory to
you as to such matters as you may reasonably request and as to (i) the
accuracy of its and their respective representations and warranties
herein at and as of the Time of Delivery and (ii) the performance by the
Company and the Selling Shareholder of all their respective obligations
hereunder to be performed at or prior to the Time of Delivery; the
Company shall have furnished or caused to be furnished to you at the
Time of Delivery a certificate signed by the chief executive officer and
the chief financial officer, on behalf of the Company, as to (i) the
fact that they have carefully examined the Registration Statement and
Prospectus and, (a) as of the Effective Date, the statements contained
or incorporated by reference in the Registration Statement and the
Prospectus were true and correct in all material respects and neither
the Registration Statement nor the Prospectus omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (b) since the Effective Date, no
event has occurred that is required by the Act or the rules and
regulations of the Commission thereunder to be set forth in an amendment
of, or a supplement to, the Prospectus that has not been set forth in
such an amendment or supplement; and (ii) the matters set forth in
subsection (a) of this Section 7;
(m) Each director, officer, Selling Shareholder and Other
Shareholder shall have delivered to you an agreement not to offer, sell,
contract to sell or otherwise dispose of any shares of capital stock of
the Company (or securities convertible into, or exchangeable for,
capital stock of the Company), directly or indirectly, for a period of
180 days after the date of this Agreement, without the prior written
consent of Wertheim Schroder & Co. Incorporated, except (i) for the
transfer of Common Stock by gift subject to the condition that the donee
of such Common Stock agrees to be bound by the restrictions on transfer
described above and (ii) and in the case of Chemung, subject to the
condition that
-31-
Chemung may make distributions to estate or trust beneficiaries, but
only in the event that such distributions are required upon an estate's
or trust's termination in accordance with the terms of the governing
instrument; and
(n) The Company shall have delivered to you evidence that the
Securities have been authorized for quotation on the Nasdaq National
Market as of the Effective Date.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained or incorporated by reference in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any Blue Sky application or other document executed by
the Company specifically for that purpose or based upon information furnished by
the Company filed in any state or other jurisdiction in order to qualify any or
all of the Securities under the securities laws thereof or filed with the
Commission or any securities association or securities exchange (each, an
"Application"), or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements made or
incorporated by reference therein not misleading, or (ii) the employment by the
Company of any device, scheme or artifice to defraud, or the engaging by the
Company in any act, practice or course of business which operates or would
operate as a fraud or deceit, or any conspiracy with respect thereto, in which
the Company shall participate, in connection with the issuance and sale of any
of the Securities, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission relating to an
Underwriter made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; provided, further, that the
indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
persons controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented or amended, to such person, within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(a)(iii) hereof.
-32-
(b) The Selling Shareholder will indemnify and hold harmless each
Underwriter and the Company against any losses, claims, damages or liabilities
to which such Underwriter or the Company may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained or incorporated by
reference in the Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made or incorporated by reference 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 Preliminary Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement in reliance upon and in conformity with information
furnished to such Underwriter or the Company by the Selling Shareholder
expressly for use therein, or (ii) any untrue statement or alleged untrue
statement made by the Selling Shareholder in Section 1B of this Agreement, and
will reimburse such Underwriter or the Company for any legal or other expenses
incurred by such Underwriter or the Company in connection with investigating,
preparing to defend, defending or appearing as a third-party witness in
connection with any such action or claim; provided, however, the indemnity
agreement contained in this Section 8(b) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or any persons
controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising form the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented or amended, to such person within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(a)(iii) hereof. The obligations of the Selling
Shareholder to indemnify the Underwriters and the Company under this Section
8(b) shall be limited to the net proceeds received by the Selling Shareholder
hereunder for the sale of Securities to the Underwriters.
(c) In addition to any obligations of the Company and the Selling
Shareholder under Section 8(a) and 8(b), the Company and the Selling Shareholder
agree that they shall perform their indemnification obligations under Section
8(a) and Section 8(b) (as modified by the last paragraph of this Section 8(c))
with respect to counsel fees and expenses and other expenses reasonably incurred
by making payments within 45 days to the Underwriter in the amount of the
statements of the Underwriter's counsel or other statements which shall be
forwarded by the Underwriter, and that it shall make such payments
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation to reimburse the Underwriters for such expenses
and the possibility that such payments might later be held to have been improper
by a court until such time as a court orders return of such payments.
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The indemnity agreements in Section 8(a) and Section 8(b) shall be in
addition to any liability which the Company or the Selling Shareholder may
otherwise have and shall extend upon the same terms and conditions to each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act.
(d) Each Underwriter will indemnify and hold harmless the Company
and the Selling Shareholder against any losses, claims, damages or liabilities
to which the Company or such Selling Shareholder may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or any Application, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus or such
amendment or supplement or any Application in reliance upon and in conformity
with written information furnished to the Company or the Selling Shareholder by
such Underwriter relating to such Underwriter through you expressly for use
therein, and will reimburse the Company and the Selling Shareholder for any
legal or other expenses reasonably incurred by the Company and the Selling
Shareholder in connection with investigating, preparing to defend or defending
any such action or claim.
The indemnity agreement in this Section 8(d) shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
or of the Selling Shareholder and to each person, if any, who controls the
Company or the Selling Shareholder within the meaning of the Act or the Exchange
Act.
(e) Promptly after receipt by an indemnified party under Section
8(a), 8(b) or 8(d) of notice of the commencement of any action (including any
governmental investigation), such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
promptly notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party under Section 8(a),
8(b) or 8(d) except to the extent it was unaware of such action and has been
prejudiced in any material respect by such failure or from any liability which
it may have to any indemnified party otherwise than under such Section 8(a),
8(b) or 8(d). In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such
-34-
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If, however, (i) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party or (ii) an indemnified party
shall have reasonably concluded that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them and the indemnified party so notifies the
indemnifying party, then the indemnified party shall be entitled to employ
counsel different from counsel for the indemnifying party at the expense of the
indemnifying party and the indemnifying party shall not have the right to assume
the defense of such indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
local counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with respect to which
fees and expenses shall be so reimbursed shall be designated in writing by
Wertheim Schroder & Co. Incorporated in the case of parties indemnified pursuant
to Section 8(a) and Section 8(b) and by the Company in the case of parties
indemnified pursuant to Section 8(d).
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding. An
indemnifying party shall not be liable for any settlement of any claim effected
without its prior written consent (which consent shall not be unreasonably
withheld).
(f) In order to provide for just and equitable contribution under
the Act in any case in which (i) any Underwriter (or any person who controls any
Underwriter within the meaning of the Act or the Exchange Act) makes claim for
indemnification pursuant to Section 8(a) or Section 8(b) hereof, but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that Section 8(a) or Section 8(b) provides for
indemnification in such case or (ii) contribution under the Act may be required
on the part of any Underwriter or any such controlling person in circumstances
for which indemnification is provided under Section 8(d), then, and in each such
case, each indemnifying party shall contribute to the aggregate losses, claims,
damages or liabilities to which it may be subject as an indemnifying party
hereunder (after contribution from others) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required
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under Section 8(e) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Shareholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholder on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholder bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Securities purchased under this Agreement,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholder on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Shareholder and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(f) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(f). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
8(f) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(f), (x) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (y)
the Selling Shareholder shall not be required to contribute an amount in excess
of the net proceeds received by the Selling Shareholder hereunder for the sale
of Securities to the Underwriters. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) Promptly after receipt by any party to this Agreement of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against another
party (the "contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the contributing party will
not relieve it from any liability which it may have to any other party for
contribution under the Act except to the extent it was
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unaware of such action and has been prejudiced in any material respect by such
failure or from any liability which it may have to any other party other than
for contribution under the Act. In case any such action, suit or proceeding is
brought against any party, and such party notifies a contributing party of the
commencement thereof, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly
notified.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Firm Securities on the terms contained herein. If the aggregate number of Firm
Securities as to which Underwriters default is more than one-eleventh of the
aggregate number of all the Firm Securities and within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such Firm
Securities, then the Company and the Selling Shareholder shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to you to purchase such Firm Securities on such terms. In
the event that, within the respective prescribed periods, you notify the Company
and the Selling Shareholder that you have so arranged for the purchase of such
Firm Securities, or the Company and the Selling Shareholder notifies you that
they have so arranged for the purchase of such Firm Securities, you or the
Company shall have the right to postpone the Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Firm Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Firm Securities of such defaulting Underwriter or Underwriters by you or
the Company and the Selling Shareholder or both as provided in subsection (a)
above, the aggregate number of such Firm Securities which remain unpurchased
does not exceed one-eleventh of the aggregate number of all the Firm Securities,
then the Company and the Selling Shareholder shall have the right to require
each non-defaulting Underwriter to purchase the number of the Firm Securities
which such Underwriter agreed to purchase hereunder and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the
number of Firm Securities which such Underwriter agreed to purchase hereunder)
of the Firm Securities of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Firm Securities of a defaulting Underwriter or Underwriters by you or the
Company and the Selling Shareholder as provided in subsection (a) above, the
aggregate number of such Firm Securities which remain unpurchased exceeds
one-eleventh of the
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aggregate number of all the Firm Securities, or if the Company and the Selling
Shareholder shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Securities of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon terminate
without liability on the part of any non-defaulting Underwriter, the Company or
any Selling Shareholder, except for the expenses to be borne by the Company and
the Selling Shareholder and the Underwriters as provided in Section 6 hereof and
the indemnity agreement in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or an officer or director or controlling person of
the Company, or the Selling Shareholder, or any controlling person of the
Selling Shareholder, and shall survive delivery of and payment for the
Securities.
11. This Agreement shall become effective (a) if the Registration
Statement has not heretofore become effective, at the earlier of 12:00 Noon, New
York City time, on the first full business day after the Registration Statement
becomes effective, or at such time after the Registration Statement becomes
effective as you may authorize the sale of the Securities to the public by
Underwriters or other securities dealers, or (b) if the Registration Statement
has heretofore become effective, at the earlier of 24 hours after the filing of
the Prospectus with the Commission or at such time as you may authorize the sale
of the Securities to the public by Underwriters or securities dealers, unless,
prior to any such time you shall have received notice from the Company that it
elects that this Agreement shall not become effective, or you, or through you
such of the Underwriters as have agreed to purchase in the aggregate fifty
percent or more of the Firm Securities hereunder, shall have given notice to the
Company that you or such Underwriters elect that this Agreement shall not become
effective; provided, however, that the provisions of this Section 11 and
Sections 6 and Section 8 hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 hereof, or
if this Agreement, by election of you or the Underwriters, shall not become
effective pursuant to the provisions of this Section, the Company and the
Selling Shareholder shall not then be under any liability to any Underwriter
except as provided in Sections 6 and Section 8 hereof, but if this Agreement
becomes effective and is not so terminated but the Securities are not delivered
by or on behalf of the Company or the Selling Shareholder as provided herein
because the Company or the Selling Shareholder has been unable for any reason
beyond its control and not due to any default by it to comply with the terms and
conditions hereof, the Company will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you,
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including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company and the Selling Shareholder shall then be under no
further liability to any Underwriter except as provided in Sections 6 and
Section 8 hereof.
12. The statements set forth in the last paragraph on the front cover
page of the Prospectus, the paragraph on the inside front cover of the
Prospectus containing stabilization language and the second paragraph under the
caption "Underwriting" in the Prospectus constitute the only information
furnished by any Underwriter through the Representatives to the Company for
purposes of Sections 1(b), 1(c) and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Wertheim Schroder & Co. Incorporated on behalf of you
as the Representatives, and in all dealings with the Selling Shareholder
hereunder, you and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement furnished in writing by or on behalf of
such Selling Shareholder or made or given by the Attorney-in-Fact for such
Selling Shareholder.
All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, shall be in writing and, if to the
Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
you as the Representatives in care of Wertheim Schroder & Co. Incorporated,
Equitable Center, 787 Seventh Avenue, New York, New York 10019, Attention:
Syndicate Department; and if to the Company or the Selling Shareholder, shall be
delivered or sent by letter sent by mail, telex or facsimile transmission
(subsequently confirmed by delivery or by letter sent by mail) to the address of
the Company set forth in the Registration Statement, Attention: Chief Executive
Officer; provided, however, that any notice to any Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Shareholder and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and each person who controls the Company, the Selling
Shareholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
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15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be construed in accordance with the laws of the
State of New York, without giving effect to the conflicts of laws principles
thereof.
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This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and the Selling Shareholder. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement Among Underwriters, manually or facsimile executed
counterparts of which, to the extent practicable and upon request, shall be
submitted to the Company for examination, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
HARDINGE INC.
By: /s/
Name:
Title:
SELLING SHAREHOLDER
By: /s/
As Attorney-in-Fact for the
Selling Shareholder listed in
Schedule II
Accepted as of the date hereof:
WERTHEIM SCHRODER & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
as Representatives of the several Underwriters
By: WERTHEIM SCHRODER & CO. INCORPORATED
By: /s/
Managing Director
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SCHEDULE I
Number of
Underwriter Firm Securities
Wertheim Schroder & Co. Incorporated............... 578,500
Prudential Securities Incorporated................. 578,500
Bear, Stearns & Co. Inc............................ 50,000
Alex. Brown & Sons Incorporated.................... 50,000
Dean Witter Reynolds Inc........................... 50,000
Dillon, Read & Co. Inc............................. 50,000
Donaldson, Lufkin & Jenrette Securities
Corporation....................................... 50,000
A.G. Edwards & Sons, Inc........................... 50,000
Goldman, Sachs & Co................................ 50,000
Lazard Freres & Co. LLC............................ 50,000
Lehman Brothers Inc................................ 50,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................... 50,000
Morgan Stanley & Co. Incorporated.................. 50,000
NatWest Securities Limited......................... 50,000
Oppenheimer & Co., Inc............................. 50,000
PaineWebber Incorporated........................... 50,000
Salomon Brothers Inc............................... 50,000
Smith Barney Inc................................... 50,000
Advest, Inc........................................ 25,000
Arnhold and S. Bleichroeder, Inc................... 25,000
Robert W. Baird & Co. Incorporated................. 25,000
William Blair & Company............................ 25,000
The Chicago Corporation............................ 25,000
Dain Bosworth Incorporated......................... 25,000
Fahnestock & Co. Inc............................... 25,000
McDonald & Company Securities, Inc................. 25,000
Piper Jaffray Inc.................................. 25,000
The Robinson-Humphrey Company, Inc................. 25,000
Wheat, First Securities, Inc....................... 25,000
Brean Murray, Foster Securities Inc................ 10,000
First Albany Corporation........................... 10,000
C.L. King & Associates, Inc........................ 10,000
Robotti & Eng Incorporated......................... 10,000
The Seidler Companies Incorporated................. 10,000
Total.............................................. 2,282,000
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SCHEDULE II
Number of
Firm Securities
Selling Shareholder to be Sold
Trust U/W Eleanor L. Evans
B/O Prochnow et. al................................ 16,000
Trust U/W Eleanor L. Evans
B/O Gunnell et. al................................. 16,000
Total.............................................. ___________
32,000
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