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Exhibit 1
MERIDIAN DIAGNOSTICS, INC.
1,500,000 SHARES OF COMMON STOCK*
UNDERWRITING AGREEMENT
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_____________, 1996
CLEARY GULL REILAND & MCDEVITT INC.
THE OHIO COMPANY
RONEY & CO.
As Representatives of the
Several Underwriters Named Herein
c/o Cleary Gull Reiland & McDevitt Inc.
100 East Wisconsin Avenue, Suite 2400
Milwaukee, Wisconsin 53202
Ladies and Gentlemen:
Meridian Diagnostics, Inc., an Ohio Corporation (the
"Company"), and Jerry L. Ruyan (the "Selling Shareholder") confirm their
respective agreements with you (the "Representatives") and each of the other
underwriters identified on Schedule I annexed hereto (collectively, the
"Underwriters"), as set forth below:
1. SECURITIES. Subject to the terms and conditions
herein contained, the Selling Shareholder proposes to issue and sell to the
Underwriters an aggregate of 1,500,000 shares (the "Firm Shares") of common
stock, no par value per share, of the Company (the "Common Stock"). In
addition, the Selling Shareholder has agreed to grant to the Underwriters an
option to purchase up to 225,000 additional shares of Common Stock, as provided
in Section 3 hereof. The Firm Shares and, to the extent such option is
exercised, the Option Shares are collectively referred to herein as the
"Shares."
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Selling Shareholder,
jointly and severally, represent and warrant to, and agree with, each
of the Underwriters, and shall be deemed to represent and warrant to
each of the Underwriters on each Closing Date (as hereafter defined)
that:
__________________________________
* Plus an option to acquire up to 225,000 additional shares of Common Stock
from the Selling Shareholder to cover over-allotments.
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(i) The Company meets the requirements for use
of Form S-3 under the Securities Act of 1933, as amended (the "Act").
The Company has filed a registration statement on such Form (Reg. No.
333-_____) with respect to the Shares, including a prospectus subject
to completion, with the Securities and Exchange Commission (the
"Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A)
if the Commission has declared such registration statement, as it may
have been amended, effective under the Act, a prospectus in the form
most recently included in an amendment to such registration statement
(or, if no such amendment shall have been filed, in such registration
statement), with such changes or insertions as are required by Rule
430A under the Act or permitted by Rule 424(b) under the Act and as
have been provided to and approved by the Underwriters prior to the
execution of this Agreement, or (B) if the Commission has not declared
such registration statement, as it may have been amended, effective
under the Act, an amendment to such registration statement, including
a form of prospectus, a copy of which amendment has been furnished to
and approved by the Underwriters prior to the execution of this
Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time
when it was or is declared effective, including (1) all financial
schedules and exhibits thereto, (2) all documents (or portions
thereof) incorporated by reference therein filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including any
documents filed after the date of the Preliminary Prospectus (as
hereinafter defined) or Prospectus (as hereinafter defined) and so
incorporated by reference and (3) any information omitted therefrom
pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each
prospectus subject to completion filed with such registration
statement or any amendment thereto (including the prospectus subject
to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective),
including all documents (or portions thereof) incorporated by
reference therein filed under the Exchange Act, as well any additional
registration statement, and any amendments thereto, filed with the
Commission after the effectiveness of the foregoing registration
statement and prior to the execution of this Agreement or hereafter in
accordance with this Agreement for purposes of registering a portion
of the Shares under the Act; and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act or, if no prospectus is required to be filed pursuant to
said Rule 424(b), such term means the prospectus included in the
Registration Statement, in either case including all documents (or
portions thereof) incorporated by reference therein filed under the
Exchange Act.
(ii) Neither the Commission nor any state
securities commission has issued any order preventing or suspending
the use of any Preliminary Prospectus nor, to the knowledge of the
Company and the Selling Shareholder, have any proceedings for that
purpose been initiated or threatened. When any Preliminary Prospectus
was filed with the Commission, it (A) contained (or incorporated by
reference) all statements
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required to be stated therein in accordance with, and complied
in all material respects with the requirements of, the Act,
the Exchange Act and the respective rules and regulations of
the Commission thereunder and (B) did not include (or
incorporate by reference) any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is
declared effective, it (1) contained (or incorporated by
reference) or will contain (or incorporate by reference) all
statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (2) did
not or will not include (or incorporate by reference) any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to
Rule 424(b) (or, if the Prospectus or such amendment or
supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is
declared effective), on the date when the Prospectus is
otherwise amended or supplemented and on the Firm Closing Date
and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (AA)
contained (or incorporated by reference) or will contain (or
incorporate by reference) all statements required to be stated
therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the
Commission thereunder and (BB) did not or will not include (or
incorporate by reference) any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing
provisions of this subsection (ii) do not apply to statements
or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto with respect
to the last paragraph on the outside front cover of the
Prospectus concerning the terms of the offering by the
Underwriters, the paragraphs on the inside front cover page of
the Prospectus relating to stabilization practices and passive
market making and the concession and reallowance amounts
appearing under the caption "Underwriting." Neither the
Company nor any person that controls, is controlled by or in
under common control with the Company has distributed or will
distribute prior to each Closing Date any offering material in
connection with the offering and sale of the Shares other than
a Preliminary Prospectus, the Prospectus, the Registration
Statement or other materials permitted by the Act and provided
to the Representatives.
(iii) The documents that are incorporated by
reference in each Preliminary Prospectus, the Prospectus or
the Registration Statement or from which information is so
incorporated by reference, when they became effective or were
filed with the Commission, as the case may be, complied with
the requirements of the Act or
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the Exchange Act, as applicable, and any document so filed and
incorporated by reference subsequent to the effective date of the
Registration Statement shall, when it is filed with the Commission,
comply with the requirements of the Act and the Exchange Act, as
applicable, and when read together with the other information included
in such Preliminary Prospectus, the Prospectus or the Registration
Statement, as the case may be, do 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 light of the
circumstances under which they were made, not misleading.
(iv) The Company's only subsidiaries are listed
in Exhibit A hereto (the "Subsidiaries"). The Company and the
Subsidiaries have been duly organized and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation. The Company and each of the
Subsidiaries are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and the
Subsidiaries, taken as a whole.
(v) The Company and each of the Subsidiaries
have full power (corporate and other) to own or lease their respective
properties and conduct their respective businesses as described in the
Registration Statement and the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus; and the Company
has full power (corporate and other) to enter into this Agreement and
to carry out all the terms and provisions hereof to be carried out by
it.
(vi) The issued shares of capital stock of each
of the Company's directly-owned Subsidiaries as set forth in Exhibit A
hereto have been duly authorized and validly issued; are fully paid
and nonassessable and are all owned beneficially by the Company free
and clear of any security interests, liens, encumbrances, equities or
claims. The outstanding quotas of Meridian Diagnostics Europe, s.r.l.
("MDE") have been duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially as set forth in Exhibit A
hereto free and clear of any security interests, liens, encumbrances,
equities or claims. There are no outstanding options, warrants or
other rights of any description, contractual or otherwise, entitling
any person to subscribe for or purchase any shares of capital stock of
any Subsidiary.
(vii) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus. All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. No holder of outstanding shares of capital stock of
the Company is entitled as such to any preemptive or other rights to
subscribe for any of the Shares or any other Common Stock, and no
shares of Common Stock have been issued in violation
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of such rights. No holder of securities of the Company has any right,
which has not been fully exercised or waived, to require the Company
to register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this Agreement.
(viii) The capital stock of the Company conforms
to the description thereof contained in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus. There are no outstanding options, warrants or other
rights to subscribe for or purchase Common Stock, except as described
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(ix) The consolidated financial statements and
schedules, if any, of the Company and the Subsidiaries included, and
incorporated by reference, in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the
Company and the Subsidiaries and their results of operations and
changes in financial condition as of the dates and periods therein
specified. Such financial statements and schedules have been prepared
in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under
the caption "Selected Consolidated Financial Data" in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly presents on the basis stated in the
Prospectus (or such Preliminary Prospectus) the information included
therein.
(x) Arthur Andersen LLP, who have certified
certain financial statements of the Company and the Subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included, or incorporated by
reference, in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the
Act, the Exchange Act and the related published rules and regulations
thereunder.
(xi) The execution and delivery of this
Agreement has been duly authorized by the Company. This Agreement has
been duly executed and delivered by the Company and, assuming due
execution by the other parties hereto, is the legal, valid and
binding obligation of the Company, enforceable by any such party
against the Company in accordance with its terms.
(xii) No legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a party or
to which the property of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not described therein (or, if the
Prospectus is not in existence, the most recent preliminary
Prospectus), and no such proceedings have been threatened against
the Company or any of the Subsidiaries or with respect to any of their
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respective properties; and no contract or other document is required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not
described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or filed as required.
(xiii) The compliance by the Company with the
provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority or regulatory body, except such as have been
obtained or such as may be required under state securities or blue sky
laws ("Blue Sky Laws"), the National Association of Securities
Dealers, Inc. ("NASD") and, if the Registration Statement (as amended)
filed with respect to the Shares is not effective under the Act as of
the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any of their respective properties are
bound, or the charter documents, Code of Regulations or by-laws of the
Company or any of the Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of the
Subsidiaries.
(xiv) The Company has not, directly or
indirectly, (A) taken any action designed to cause or to 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 Shares
or (B) since the filing of the Registration Statement (1) sold, bid
for, purchased, or paid anyone any compensation for soliciting
purchases of, the Shares or any Common Stock or (2) paid or agreed to
pay to any person any compensation for soliciting another to purchase
any other securities of the Company.
(xv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), (A) the Company and the Subsidiaries have not
incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction not in the ordinary course
of business; (B) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (C) there has not
been any material change in the capital stock, short-term debt or
long-term debt of the Company and the Subsidiaries or any change or
development involving or that could be expected to involve a material
adverse change in the condition (financial or otherwise), management,
business, prospects, net worth or results of operations of the Company
and the Subsidiaries ("Material Adverse Change"), except in each case
as
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described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xvi) The Company and each of the Subsidiaries
have good and marketable title in fee simple to all items of real
property and marketable title to all personal property owned by each
of them, in each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do
not materially and adversely affect the value of such property and do
not interfere with the use made or proposed to be made of such
property by the Company or such Subsidiary, and any real property and
buildings held under lease by the Company or any such Subsidiary are
held under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company
or such Subsidiary, in each case mentioned in this paragraph except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xvii) No labor dispute with the employees of the
Company or any of the Subsidiaries exists or is threatened or imminent
that could result in a Material Adverse Change, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xviii) The Company and the Subsidiaries own or
possess, or can acquire on reasonable terms, all material patents,
patent applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Change, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus). The
Company and the Subsidiaries have taken reasonable action to protect
proprietary or other confidential information currently employed by
them in connection with their respective businesses, including without
limitation causing appropriate employees to execute enforceable
confidentiality agreements. The patents, registered trademarks and
registered service marks described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus) have been issued or registered as so described, and the
Company has maintained such patents and registrations in accordance
with applicable requirements.
(xix) The Company and each of the Subsidiaries
are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such Subsidiary has any
reason
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to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Change,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xx) No Subsidiary is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary's property or
assets to the Company or any other subsidiary of the Company, except
as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxi) The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Change, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxii) Neither the Company nor any Subsidiary is
an "investment company", 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. The
Company will conduct its operations in a manner that will not subject
it to registration as an "investment company" under such act.
(xxiii) The Company has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which the
failure so to file would not result in a Material Adverse Change) and
has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xxiv) Neither the Company nor any of the
Subsidiaries is in violation of any federal, state or foreign law or
regulation relating to occupational safety and health, the environment
or the storage, handling or transportation of hazardous or toxic
materials, pollutants or contaminants, including, without limitation,
all rules and requirements of the State of Ohio Fire Marshall, Bureau
of Underground Storage Tank Regulations, and the Company and the
Subsidiaries have received all permits, licenses
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or other approvals required of them under applicable federal, state
and foreign occupational safety and health and environmental laws and
regulations to conduct their respective businesses, and the Company
and each Subsidiary is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of
laws or regulations, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals which would not, singly or in the
aggregate, result in a Material Adverse Change, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(xxv) Each certificate signed by any officer of
the Company and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by
the Company and the Selling Shareholder to each Underwriter as to the
matters covered thereby.
(xxvi) Except for the shares of capital stock of
each of the Subsidiaries owned by the Company and such Subsidiaries,
neither the Company nor any Subsidiary owns any material amount of
shares of stock or any other equity securities of any corporation or
has any equity interest in any firm, partnership, association or other
entity, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxvii) The Company and each of the
Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxviii) Neither the Company nor any Subsidiary is,
nor with the giving of notice or passage of time or both, would be, in
violation or in breach of: (A) its respective Articles of
Incorporation or By-laws (or other corporate governing documents); (B)
any statute, ordinance, order, rule or regulation applicable to the
Company or such Subsidiary; (C) any order or decree of any court,
regulatory body, arbitrator, administrative agency or other
instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company or such Subsidiary; or (D) any
provision of any agreement, lease, franchise, license, indenture,
permit, mortgage, deed of trust, evidence of indebtedness or other
instrument to which the Company or such Subsidiary is a party or by
which any property owned or leased by the Company or such Subsidiary
is bound or affected, except where such violation or breach would not
result in a Material Adverse Change, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
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(xxix) Neither the Company nor any person that
controls, is controlled by (including the Subsidiaries) or is under
common control with the Company has, directly or indirectly: (A) made
any unlawful contribution to any candidate for political office, or
failed to disclose fully any contribution in violation of law; or (B)
made any payment to any federal, state or foreign governmental officer
or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof or applicable
foreign jurisdictions, except where such illegal contribution, payment
or failure to disclose would not result in a Material Adverse Change.
(xxx) The Company and the Subsidiaries are in
compliance with the requirements of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations thereunder,
except to the extent that failure to be in such compliance would not
result in a Material Adverse Change.
(xxxi) Neither the Company nor any of the
Subsidiaries nor any affiliate of the Company or any of the
Subsidiaries does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section
517.075 of the Florida Statutes, and the Company agrees to comply with
such Section if, prior to the completion of the distribution of the
Shares, the Company, any of its Subsidiaries or any affiliate of the
Company or any of its Subsidiaries commences doing such business.
(xxxii) The Company has obtained for the benefit
of the Underwriters the written agreement, enforceable by the
Representatives, of each of the officers and directors of the Company,
that for a period commencing on the date of such agreement and
continuing until 90 days after the date of the Prospectus, such
persons will not, without the prior written consent of Cleary Gull
Reiland & McDevitt Inc. ("Cleary Gull"), directly or indirectly,
offer, sell, transfer, or pledge, contract to sell, transfer or
pledge, or cause or in any way permit to be sold, transferred,
pledged, or otherwise disposed of, any: (A) shares of Common Stock;
(B) rights to purchase shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be
beneficially owned by any such shareholder in accordance with the
applicable regulations of the Commission and shares of Common Stock
that may be issued upon the exercise of a stock option, warrant or
other convertible security); or (C) securities that are convertible or
exchangeable into shares of Common Stock, except as may be provided in
any such written agreement.
(xxxiii) None of the Company, any Subsidiary, any
officer or director of the Company or any Subsidiary, or any person
who owns, of record or beneficially, five percent (5%) or more of
any class of securities issued by the Company is: (A) an officer,
director or partner of any brokerage firm, broker or dealer that is a
member of the NASD ("NASD Member") or (B) directly or indirectly, a
"person associated with" an NASD Member or an "affiliate" of an NASD
Member, as such terms are used in the NASD Rules of Fair Practice. In
addition, neither the Company nor any Subsidiary has issued or
transferred
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any Common Stock, warrants, options or other securities, or any other
items of value, to any of the Underwriters or any "related person" of
any Underwriter, as such term is used in the NASD Rules of Fair
Practice, except as provided in this Agreement.
(b) The Selling Shareholder represents and warrants to
and agrees with the several Underwriters and the Company, and shall be deemed
to represent and warrant to the several Underwriters and the Company on each
Closing Date, that:
(i) The Selling Shareholder has duly executed
a durable power of attorney and custody agreement ("Durable Power of
Attorney and Custody Agreement") naming __________ and __________, or
either of them, as the Selling Shareholder's attorney(s)-in-fact
("Attorneys-in-Fact") for the purpose of entering into and carrying
out this Agreement and naming __________ as custodian ("Custodian") of
the Shares of the Selling Shareholder for the purpose of selling the
Shares to the Underwriters on each Closing Date and receiving payment
therefor.
(ii) All consents, approvals, authorizations
and orders necessary for the execution and delivery by the Selling
Shareholder of this Agreement and the Durable Power of Attorney and
Custody Agreement and for the sale and delivery of the Shares have
been obtained. The Selling Shareholder has, and at the time of
delivery thereof hereunder the Selling Shareholder will have, good and
valid title to the Shares, free and clear of all voting trust
arrangements, liens, encumbrances, security interests, equities,
claims and community or marital property rights, other than any
created by the Durable Power of Attorney and Custody Agreement or this
Agreement for the benefit of the Underwriters. The Selling
Shareholder has full right, power and authority to enter into this
Agreement and the Durable Power of Attorney and Custody Agreement and
to sell, assign, transfer and deliver the Shares hereunder, free and
clear of all voting trust arrangements, liens, encumbrances, security
interests, equities, claims and community or marital property rights,
other than any created by the Durable Power of Attorney and Custody
Agreement or this Agreement for the benefit of the Underwriters. Upon
delivery of and payment for such Shares hereunder, the Underwriters
will acquire good and valid title thereto, free and clear of all
voting trust arrangements, liens, encumbrances, security interests,
equities, claims and community or marital property rights.
(iii) The Selling Shareholder has not
distributed and will not distribute any Preliminary Prospectus, the
Prospectus or any other material in connection with the offering and
sale of the Shares. The Selling Shareholder has not taken and will
not take, directly or indirectly, any action designed to or which
could cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Stock.
(iv) The execution, delivery and performance by
the Selling Shareholder of this Agreement and the Durable Power of
Attorney and Custody
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Agreement will not, if applicable, constitute a breach, or be in
contravention, of any provision of any agreement, franchise, license,
indenture, mortgage, deed of trust or other instrument to which the
Selling Shareholder is a party or by which the Selling Shareholder or
the Selling Shareholder's property may be bound or affected, or any
statute, rule or regulation applicable to the Selling Shareholder, or
violate any order or decree of any court, regulatory body,
administrative agency or other governmental body having jurisdiction
over the Selling Shareholder or any of such Selling Shareholder's
property. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of, and performance
under, this Agreement by the Selling Shareholder or the consummation
by the Selling Shareholder of the transactions contemplated by this
Agreement, except for compliance with the Act, the Exchange Act, the
Blue Sky Laws applicable to the public offering of the Shares by the
Underwriters and the clearance of such offering with the NASD. The
Selling Shareholder hereby represents and warrants that each
Attorney-in-Fact has been duly appointed as attorney-in-fact by the
Selling Shareholder for the purpose of entering into and carrying out
this Agreement, and the Durable Power of Attorney and Custody
Agreement has been duly executed and delivered by or on behalf of the
Selling Shareholder to the Representative.
(v) This Agreement and the Durable Power of
Attorney and Custody Agreement are each valid and binding agreements
of the Selling Shareholder enforceable in accordance with their
respective terms.
(vi) The Selling Shareholder has deposited in
custody, under the Durable Power of Attorney and Custody Agreement,
certificates in negotiable form for the Shares (including the maximum
number of Option Shares) for the purpose of further delivery pursuant
to this Agreement. The Selling Shareholder agrees that the Shares on
deposit with the Custodian are subject to the interests of the
Underwriters, that the arrangements made for such custody, and the
appointment of the Attorneys-in-Fact pursuant to the Durable Power of
Attorney and Custody Agreement, are to that extent irrevocable, and
that the obligations of the Selling Shareholder hereunder and under
the Durable Power of Attorney and Custody Agreement shall not be
terminated, except as provided in this Agreement and the Durable Power
of Attorney and Custody Agreement, by any act of the Selling
Shareholder, by operation of law, whether by the death or incapacity
of the Selling Shareholder or by the occurrence of any other event.
If the Selling Shareholder should die or become incapacitated or if
any other event should occur before the delivery of the Shares
hereunder, the certificates for Shares then on deposit with the
Custodian shall, to the extent such Shares are purchased by the
Underwriters, be delivered by the Custodian in accordance with the
terms and conditions of this Agreement and the Durable Power of
Attorney and Custody Agreement as if such death, incapacity or other
event had not occurred, regardless of whether or not the Custodian
shall have received notice thereof. The Selling Shareholder
represents that each Attorney-in-Fact has been authorized by the
Selling Shareholder to execute and deliver this Agreement and the
Custodian has been authorized to receive and acknowledge receipt
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of the proceeds of sale of the Shares sold by the Selling Shareholder
against delivery thereof and otherwise to act on behalf of the Selling
Shareholder.
(vii) Insofar as it relates to the Selling
Shareholder, each Preliminary Prospectus, as of its date, has
conformed in all material respects with the requirements of the Act
and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading; and on the effective date of
the Registration Statement and at all times subsequent thereto up to
each Closing Date, (A) the Registration Statement and the Prospectus,
as they relate to such Selling Shareholder, did or will conform to the
requirements of the Act, and (B) neither the Registration Statement
nor the Prospectus as it relates to such Selling Shareholder did or
will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(viii) The information contained in the Selling
Shareholder's Directors' and Officers' Questionnaire completed in
connection with the proposed sale of the Shares and delivered to the
Representatives was, as of the date of such questionnaire, and is, as
of the date of this Agreement, true and correct.
3. PURCHASE, SALE AND DELIVERY OF SHARES.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell the Firm Shares to the
Underwriters, and each of the Underwriters agrees to purchase from the Selling
Shareholder the number of Firm Shares as hereinafter set forth at the price per
share of $________. The obligation of each Underwriter to the Selling
Shareholder shall be to purchase from the Selling Shareholder the number of
full Firm Shares set forth opposite the name of such Underwriter in Schedule I
annexed hereto.
(b) On the Firm Closing Date (as hereinafter defined),
the Custodian on behalf of the Selling Shareholder will deliver to the
Representatives, at the offices of Cleary Gull, 100 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, or through the facilities of The Depository Trust
Company, for the accounts of the several Underwriters, certificates
representing the Firm Shares against payment in Milwaukee, Wisconsin of the
purchase price therefor by certified or official bank check or checks in New
York Clearing House (next day) funds payable to the order of the Custodian. As
referred to in this Agreement, the "Firm Closing Date" shall be on the third
full business day after the date of the Prospectus, at 9:00 a.m., Milwaukee,
Wisconsin time, or at such other date or time not later than ten full business
days after the date of the Prospectus as the Representatives and the
Attorneys-in-Fact (or either of them) may agree. The certificates for the Firm
Shares to be so delivered will be in denominations and registered in such names
as the Representatives request by notice to the Attorneys-in-Fact, or either of
them, prior to the Firm Closing Date, and such certificates will be made
available for checking and packaging at 9:00 a.m., Milwaukee, Wisconsin time on
the
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first full business day preceding the Firm Closing Date at a location to be
designated by the Representatives.
(c) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms and
conditions herein set forth, the Selling Shareholder hereby agrees to sell to
the Underwriters, and the Underwriters, severally and not jointly, shall have
the right at any time within thirty days after the date of the Prospectus to
purchase up to the number of Option Shares from the Selling Shareholder at the
purchase price per share to be paid for the Firm Shares, for use solely in
covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
upon notice by the Representatives to the Attorneys-in-Fact, or either of them,
within thirty days after the date of the Prospectus setting forth the aggregate
number of Option Shares to be purchased by the Underwriters and sold by the
Selling Shareholder, the names and denominations in which the certificates for
such shares are to be registered and the date and place at which such
certificates will be delivered. Such date of delivery ("Option Closing Date")
shall be determined by the Representatives, provided that the Option Closing
Date, which may be the same as the Firm Closing Date, shall not be earlier than
the Firm Closing Date and, if after the Firm Closing Date, shall not be earlier
than three nor later than ten full business days after delivery of such notice
to exercise. Certificates for the Option Shares will be made available for
checking and packaging at 9:00 a.m., Milwaukee, Wisconsin time, on the first
full business day preceding the Option Closing Date at a location to be
designated by the Representatives. The manner of payment for and delivery of
(including the denominations of and the names in which certificates are to be
registered) the Option Shares shall be the same as for the Firm Shares.
(d) The Representatives have advised the
Attorneys-in-Fact that each Underwriter has authorized the Representatives to
accept delivery of the Shares and to make payment therefor. It is understood
that the Representatives, individually and not as representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Shares
to be purchased by any Underwriter whose funds shall not have been received by
the Representatives by the Firm Closing Date or the Option Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any obligation under this Agreement. As
referred to in this Agreement, "Closing Date" shall mean either the Firm
Closing Date or the Option Closing Date.
4. REPRESENTATION OF UNDERWRITERS. The Representatives
will act as the representatives for the several Underwriters in connection with
the public offering of the Shares, and any action under or in respect of this
Agreement taken by the Representatives will be binding upon all of the
Underwriters.
5. INFORMATION FURNISHED BY THE UNDERWRITERS. The
information set forth in the last paragraph on the outside front cover page of
the Prospectus concerning the terms of the offering by the Underwriters, the
paragraphs on the inside front cover page of the Prospectus relating to
stabilization practices and passive market making, and the concession and
reallowance
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amounts appearing under the caption "Underwriting" in the Prospectus constitute
all of the information furnished to the Company by and on behalf of the
Underwriters for use in connection with the preparation of the Registration
Statement and the Prospectus, as such information is referred to in this
Agreement.
6. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the several Underwriters that:
(a) If the effective time of the Registration Statement
is not prior to the execution and delivery of this Agreement, then the Company
will use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, upon notification from the
Commission that the Registration Statement has become effective, will so advise
the Representatives and counsel to the Underwriters promptly. If the effective
time of the Registration Statement is prior to the execution and delivery of
this Agreement and any information shall have been omitted therefrom in
reliance upon Rule 430A, the Company, at the earliest possible time, will
furnish the Representatives with a copy of the Prospectus to be filed by the
Company with the Commission to comply with Rule 424(b) and Rule 430A under the
Act and, if the Representatives do not object to the contents thereof, will
comply with such Rules. Upon compliance with such Rules, the Company will so
advise the Representatives promptly. The Company will advise the
Representatives and counsel to the Underwriters and the Attorneys-in-Fact
promptly of the issuance by the Commission or any state securities commission
of any stop order suspending the effectiveness of the Registration Statement or
of the institution of any proceedings for that purpose, or of any notification
of the suspension of qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceedings for that purpose, and will
also advise the Representatives and counsel to the Underwriters and the
Attorneys-in-Fact promptly of any request of the Commission for amendment or
supplement of the Registration Statement, of any Preliminary Prospectus or of
the Prospectus, or for additional information, and the Company will not file
any amendment or supplement to the Registration Statement (either before or
after it becomes effective), to any Preliminary Prospectus or to the Prospectus
(including a prospectus filed pursuant to Rule 424(b)), or file any document
under the Exchange Act before the termination of the public offering of the
Shares by the Underwriters if such document would be deemed to be incorporated
by reference in the Registration Statement, if the Representatives have not
been furnished with a copy prior to such filing (with a reasonable opportunity
to review such amendment or supplement) or if the Representatives object to
such filing.
(b) If, at any time when a prospectus relating to the
Shares is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event occurs as a result of which the Prospectus
would include an untrue statement of a material fact, or would omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to supplement the
Prospectus to comply with the Act or to file under the Exchange Act any
document that would be deemed to be incorporated by reference in the
Registration Statement to comply with the Act or the Exchange Act, the Company
promptly will
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advise the Representatives and counsel to the Underwriters and the
Attorneys-in-Fact thereof and will promptly prepare and file with the
Commission, at its expense, an amendment to the Registration Statement or file
such document that will correct such statement or omission or an amendment that
will effect such compliance; and, if any Underwriter is required to deliver a
prospectus after the effective date of the Registration Statement, the Company,
upon request of the Representatives, will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act. The Company consents to the use, in accordance
with the provisions of the Act and with the Blue Sky Laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by dealers, of
each Preliminary Prospectus.
(c) Neither the Company nor any Subsidiary will, prior to
the Option Closing Date, if any, incur any liability or obligation, direct or
contingent, or enter into any material transaction, other than in the ordinary
course of business, or enter into any transaction with an "affiliate," as
defined in Rule 405 under the Act, that is required to be described in the
Prospectus pursuant to Item 404 of Regulation S-K under the Act, except as
described in the Prospectus.
(d) Neither the Company nor any Subsidiary will, prior to
the Option Closing Date, if any, acquire any of the Common Stock nor will the
Company declare or pay any dividend or make any other distribution upon its
Common Stock payable to shareholders of record on a date prior to the Option
Closing Date, except as described in the Prospectus.
(e) The Company will make generally available to its
security holders and the Representatives an earnings statement as soon as
practicable, but in no event later than sixty days after the end of its fiscal
quarter in which the first anniversary of the effective date of the
Registration Statement occurs, covering a period of twelve consecutive calendar
months beginning after the effective date of the Registration Statement, which
will satisfy the provisions of the last paragraph of Section 11(a) of the Act
and Rule 158 promulgated thereunder.
(f) During such period as a prospectus is required by law
to be delivered in connection with sales by an Underwriter or dealer, the
Company will furnish to the Representatives, at the expense of the Company,
copies of the Registration Statement, the Prospectus, any Preliminary
Prospectus and all amendments and supplements to any such documents, including
any document filed under the Exchange Act and deemed to be incorporated by
reference in the Registration Statement, in each case as soon as available and
in such quantities as the Representatives may reasonably request.
(g) The Company will cooperate with the Representatives
and counsel to the Underwriters in qualifying or registering the Shares for
sale under the Blue Sky Laws of such jurisdictions as the Representatives
designate and will continue such qualifications or registrations in effect so
long as reasonably requested by the Representatives to effect the distribution
of the Shares, except that the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
such jurisdiction where it
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is not presently qualified. In each jurisdiction where any of the Shares shall
have been qualified as provided above, the Company will file such reports and
statements as may be required to continue such qualification for a period of
not less than one year from the date of the Prospectus. The Company shall
promptly prepare and file with the Commission, from time to time, such reports
as may be required to be filed by the Act and the Exchange Act, and the Company
shall comply in all respects with the undertakings given by the Company in
connection with the qualification or registration of the Shares for offering
and sale under the Blue Sky Laws.
(h) During the period of three years from the date of the
Prospectus, the Company will furnish to each of the Representatives and to each
of the other Underwriters who may so request, as soon as available, each
report, statement or other document of the Company or its Board of Directors
mailed to its shareholders or filed with the Commission, and such other
information concerning the Company as the Representatives may reasonably
request.
(i) The Company shall take all necessary or appropriate
action within its power to maintain the authorization for trading of the Common
Stock as a Nasdaq National Market security, or take such action to authorize
the Common Stock for listing on the New York Stock Exchange or the American
Stock Exchange, for a period of at least thirty-six months after the date of
the Prospectus.
(j) Except for the issuance and sale by the Company of
Common Stock upon exercise of presently existing outstanding stock options and
the grant of employee stock options pursuant to the Company's 1996 Stock Option
Plan (provided that none of such options shall be exercisable for a period of
90 days after the date of the Prospectus), the Company shall not, for a period
of 90 days after the date of the Prospectus, without the prior written consent
of Cleary Gull, directly or indirectly, offer, sell or otherwise dispose of,
contract to sell or otherwise dispose of, or cause or in any way permit to be
sold or otherwise disposed of, any: (i) shares of Common Stock; (ii) rights to
purchase shares of Common Stock; or (iii) securities that are convertible or
exchangeable into shares of Common Stock.
(k) The Company will maintain a transfer agent and, if
required by law or the rules of The Nasdaq Stock Market or any national
securities exchange on which the Common Stock is listed, a registrar (which, if
permitted by applicable laws and rules, may be the same entity as the transfer
agent) for its Common Stock.
(l) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which, in
the opinion of Cleary Gull, the market price of the Common Stock has been or is
likely to be materially affected (regardless of whether such rumor, publication
or event necessitates a supplement to the Prospectus), the Company will, after
written notice from Cleary Gull advising the Company of any of the matters set
forth above, promptly consult with Cleary Gull concerning the advisability and
substance of, and, if the Company and Cleary Gull determine that it is
appropriate, disseminate, a press release or other public statement responding
to or commenting on, such rumor, publication or event.
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(m) The Company will comply or cause to be complied with
the conditions to the obligations of the Underwriters in Section 9 hereof.
7. COVENANTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder covenants and agrees with the several Underwriters and the Company
as follows:
(a) If the effective time of the Registration Statement
is not prior to the execution and delivery of this Agreement, the Selling
Shareholder will cooperate to the extent necessary to cause the Registration
Statement to become effective at the earliest possible time; and the Selling
Shareholder will do and perform all things to be done and performed by such
Selling Shareholder prior to each Closing Date, pursuant to this Agreement or
the Durable Power of Attorney and Custody Agreement.
(b) The Selling Shareholder agrees to deliver to the
Custodian on or prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
substitute form or statement specified by Treasury Department regulations in
lieu thereof).
(c) The Selling Shareholder will pay all federal and
other taxes, if any, on the transfer or sale of the Shares.
(d) For a period of 360 days after the date of the
Prospectus, the Selling Shareholder will not, without the prior written consent
of Cleary Gull, directly or indirectly, offer, sell, transfer, or pledge,
contract to sell, transfer or pledge or cause or in any way permit to be sold,
transferred, pledged or otherwise disposed of any: (i) shares of Common Stock;
(ii) rights to purchase shares of Common Stock (including, without limitation,
shares of Common Stock that may be issued upon exercise of a stock option,
warrant or other convertible security); or (iii) securities that are
convertible or exchangeable into shares of Common Stock, except that the
Selling Shareholder may, during such 360-day period, make bona fide gifts of
Common Stock to donees who agree in writing with the Underwriters to be subject
to the same restrictions as set forth herein.
(e) The Selling Shareholder will furnish any documents,
instruments or other information that the Representatives may reasonably
request in connection with the sale and transfer of the Shares to the
Underwriters.
(f) If the sale to the Underwriters of the Firm Shares is
not consummated for any reason other than termination of this Agreement
pursuant to Section 12 hereof or pursuant to Section 14(b) or 14(d) hereof,
without limiting any other rights the Underwriters may have, the Company agrees
to reimburse the Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and expenses of counsel for the Underwriters) that
shall have been incurred by the Underwriters in connection with the proposed
purchase and sale of the Shares, and the provisions of Sections 8 and 11 hereof
shall at all times be effective and apply.
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(g) If the sale to the Underwriters of the Firm Shares is
not consummated for any reason other than termination of this Agreement by the
Underwriters pursuant to Section 14 hereof, then the Company and/or the Selling
Shareholder, as the case may be, shall offer to hire, on customary terms and
conditions, all Unreimbursed Representatives (as such term is defined below) as
financial advisors in connection with the first sale, subsequent to the date
hereof, of a material amount of securities of the Comany (without limitation, a
transaction by the Selling Shareholder pursuant to Rule 144 under the Act would
not be a sale of a material amount of Company securities, but a business
combination involving the Company would be a sale of a material amount of
Company securities) by the Company and/or the Selling Shareholder, as the case
may be, in a private or public transaction made in good faith. For purposes of
this Agreement, an "Unreimbursed Representative" shall be a Representative
which has not been reimbursed for its allocated share of expenses in connection
with the transactions contemplated hereby under Section 7(f) or otherwise, it
being agreed that the Company and/or the Selling Shareholder can avoid the
obligation imposed on each of them under this Section 7(g) as to any
Representative by reimbursing such Representative for its allocated share of
expenses relating to the transactions contemplated hereby.
8. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Selling Shareholder will
pay the costs, fees and expenses incurred in connection with the public
offering of the Shares. Such costs, fees and expenses to be paid by the
Selling Shareholder include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the reasonable legal fees and disbursements
of counsel for the Underwriters, but including such fees and disbursements
described in subsection (b) of this Section 8) incurred in connection with the
performance of the Company's obligations hereunder, including without limiting
the generality of the foregoing: the registration fees related to the filing of
the Registration Statement with the Commission; the fees and expenses related
to the quotation of the Shares on the Nasdaq National Market or other national
securities exchange; the fees and expenses incurred in connection with the
preparation, printing, shipping and delivery of the Registration Statement,
each Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all agreements and supplements provided for herein,
this Agreement and the Preliminary and Supplemental Blue Sky Memoranda and the
Durable Power of Attorney and Custody Agreement, including, without limitation,
shipping expenses via overnight delivery and/or courier service to comply with
applicable prospectus delivery requirements; and the costs and expenses
associated with the production of materials related to, and travel expenses
incurred by the management of the Company in connection with, the various
meetings to be held between the Company's management and prospective investors.
(b) All registration fees and expenses, including
reasonable legal fees and disbursements of counsel for the Underwriters
incurred in connection with qualifying or registering all or any part of the
Shares for offer and sale under the Blue Sky Laws and the clearing of the
public offering and the underwriting arrangements evidenced hereby with the
NASD, provided that
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Selling Shareholder shall not be liable for legal fees of counsel for the
Underwriters under this subsection (b) to the extent such fees exceed $12,500
(which amount shall not include filing fees required under the Blue Sky Laws
and the rules of the NASD or other disbursements).
(c) All transfer or sales tax imposed upon the transfer
and sale of the Selling Shareholder's Shares to the Underwriters and for all
fees and expenses of the Attorneys-in-Fact and the Custodian. All costs and
expenses incident to the performance of the Selling Shareholder's obligations
hereunder that are not otherwise specifically provided for in this Section will
be borne and paid solely by the Selling Shareholder.
9. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters under this Agreement shall be
subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Shareholder herein set forth as of the date hereof
and as of each Closing Date, to the accuracy of the statements of the Company's
officers, the Selling Shareholder and the Attorneys-in-Fact on behalf of the
Selling Shareholder made pursuant to the provisions hereof, to the performance
by the Company and the Selling Shareholder of their respective obligations
hereunder, and to the following additional conditions, unless waived in writing
by the Representatives:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 10:00 a.m., Washington, D.C. time,
on the date of this Agreement, or such later time as shall have been consented
to by the Representatives; all filings required by Rules 424(b) and 430A under
the Act shall have been timely made; no stop order suspending the effectiveness
of the Registration Statement shall have been issued by the Commission or any
state securities commission nor, to the knowledge of the Company, shall any
proceedings for that purpose have been initiated or threatened; and any request
of the Commission or any state securities commission for including of
additional information in the Registration Statement, or otherwise, shall have
been complied with to the satisfaction of the Representatives.
(b) Since the dates as of which information is given in
the Registration Statement:
(i) there shall not have occurred any adverse
change, or development involving a prospective adverse change, in the
condition (financial or otherwise), management, business, prospects,
net worth or results of operations of the Company and the
Subsidiaries, whether or not arising from transactions in the ordinary
course of business; and
(ii) neither the Company nor any Subsidiary
shall have sustained any loss or interference from any labor dispute,
strike, fire, flood, windstorm, accident or other calamity (whether or
not insured) or from any court or governmental action, order or
decree,
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the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the opinion of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and Prospectus.
(c) The Representatives shall not have advised the
Company that the Registration Statement or the Prospectus contains (or
incorporates by reference) an untrue statement of fact that, in the opinion of
the Representatives or counsel for the Underwriters, is material, or omits to
state a fact that, in the opinion of the Representatives or such counsel, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Representatives shall have received an opinion of
Keating, Muething & Klekamp, counsel for the Company, addressed to the
Representatives, as the representatives of the Underwriters, and dated the Firm
Closing Date or the Option Closing Date, as the case may be, to the effect
that:
(i) the Company and each of the Subsidiaries
have been duly organized and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and the
Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries
have corporate power to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus, and the Company has corporate power to
enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it;
(iii) the issued shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned beneficially by the Company
free and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims; the outstanding quotas of MDE, to
the extent necessary or applicable, have been duly authorized
and validly issued, are fully paid and nonassessable and are owned
beneficially as set forth in Exhibit A hereto free and clear of any
security interests, liens, encumbrances, equities or claims; there are
no preemptive, preferential or, to such counsel's knowledge, other
rights to subscribe for or purchase any shares of capital stock of any
Subsidiary; and to such counsel's knowledge, no shares of capital
stock of any Subsidiary have been issued in violation of such
rights;
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(iv) the authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus; all of
the issued shares of capital stock of the Company, including, without
limitation, the Shares, have been duly authorized and validly issued
and are fully paid and nonassessable, have been issued in compliance
with all applicable federal and state securities laws and were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities; no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Shares; and no holders of securities of the Company are entitled to
have such securities registered under the Registration Statement; and
the certificates for the Shares to be delivered hereunder are in due
and proper form and conform to the requirements of applicable law;
(v) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital
stock of the Company, provide a fair summary of such provisions; and
the statements set forth under the headings "Business - Government
Regulations" and "Business - Legal Proceedings" in the Prospectus,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, provide a fair summary
of such legal matters, documents and proceedings therein discussed;
(vi) the execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate
action of the Company and this Agreement has been duly executed and
delivered by the Company; and this Agreement is a legal, valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except that rights to indemnity or
contribution may be limited by applicable law and except as
enforceability of this Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by equitable principles limiting the
right to specific performance or other equitable relief;
(vii) after due inquiry and to the best
knowledge of such counsel, no legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a party or
to which the property of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and that are not described therein, and,
to the best knowledge of such counsel, no such proceedings have been
threatened against the Company or any of the Subsidiaries or with
respect to any of their respective properties; and no contract or
other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required;
(viii) the compliance by the Company with the
provisions of this Agreement and the consummation of the transactions
herein contemplated do not (A)
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require the consent, approval, authorization, registration or
qualification of or with any governmental authority or regulatory
body, except such as have been obtained and such as may be required
under the Blue Sky Laws or by the NASD, as to which counsel need not
express an opinion, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company
or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or any of their respective properties are bound,
or the charter documents, Code of Regulations or by-laws of the
Company or any of the Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to
the Company or any of the Subsidiaries;
(ix) the Registration Statement is effective
under the Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required
by Rule 424(b); no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or
supplement thereto has been issued; and no proceedings for that
purpose have been instituted or threatened or, to the best knowledge
of such counsel, are contemplated by the Commission;
(x) the Registration Statement originally
filed with respect to the Shares and each amendment thereto and the
Prospectus (in each case, including the documents incorporated by
reference therein but not including the financial statements and other
financial information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder;
(xi) the Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses;
(xii) this transaction will not cause the
Company to become an "investment company" subject to registration as
such term is defined under the 1940 Act; and
(xiii) the Common Stock is a Nasdaq National
Market security on The Nasdaq Stock Market and is registered under the
Exchange Act.
Such counsel shall also state that they have no reason to
believe that the Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date or the date of such opinion,
included or includes any untrue statement of a material fact or omitted or
omits to state
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a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any jurisdiction other than the State of
Ohio or the United States, to the extent satisfactory in form and scope to
counsel for the Underwriters, upon the opinion of local counsel reasonably
satisfactory to counsel for the Underwriters, and copies of such opinion shall
be delivered to the Underwriters and counsel for the Underwriters. Such counsel
may state that they are not passing on matters relating to patents and
trademarks.
References to the Registration Statement and the Prospectus in
this subsection (d) shall include any amendment or supplement thereto at the
date of such opinion.
(e) The Representatives shall have received an opinion
from Keating, Muething & Klekamp, counsel for the Selling Shareholder, dated the
Firm Closing Date or the Option Closing Date, as the case may be, to the effect
that:
(i) each of this Agreement and the Durable
Power of Attorney and Custody Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling Shareholder and
such agreement constitutes the valid and binding agreement of the
Selling Shareholder, enforceable in accordance with its respective
terms, except that rights to indemnity or contribution thereunder may
be limited by applicable law and except as enforceability of such
agreement may be limited by bankruptcy or similar laws generally
affecting the rights of creditors and by equitable principles limiting
the right to specific performance or other equitable relief;
(ii) the execution and delivery of this
Agreement and the Durable Power of Attorney and Custody Agreement and
the consummation of the transactions herein and therein contemplated
will not constitute a breach, or be in contravention, of any provision
of any agreement, franchise, license, mortgage, deed of trust or other
instrument to which the Selling Shareholder is a party or by which the
Selling Shareholder or the Selling Shareholder's property may be
bound or affected, or violate any order or decree of any court,
regulatory or governmental body, administrative body or
instrumentality of the United States or other jurisdiction having
jurisdiction over the Selling Shareholder;
(iii) the Selling Shareholder has full legal
right, power and authority, and has secured any consent, approval,
authorization and order required to enter into and perform this
Agreement and the Durable Power of Attorney and Custody Agreement and
to sell, assign, transfer and deliver title to the Shares to be sold
by the Selling Shareholder as provided herein; and upon delivery to
the Underwriters or upon the order of the Representatives against
payment of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Underwriters will acquire good and
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marketable title to the Shares to be sold hereunder by such Selling
Shareholder, free and clear of all voting trust arrangements, liens,
encumbrances, security interests, equities, claims and community or
marital property rights; and
(iv) to such counsel's knowledge, the
information concerning the Selling Shareholder contained in the
Prospectus under the caption "Principal Shareholders and Selling
Shareholder" complies in all material respects with the Act.
In rendering such opinion, counsel for the Selling Shareholder
may rely, to the extent counsel deems such reliance proper, as to matters of
fact upon a certificate of the Selling Shareholder, and copies of such
certificate shall be furnished to the Representatives and counsel for the
Underwriters on or before each Closing Date.
(f) The Representatives shall have received an opinion of
Foley & Lardner, counsel for the Underwriters, dated the Firm Closing Date or
the Option Closing Date, as the case may be, with respect to the issuance and
sale of the Shares, the Registration Statement and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers and records
as they request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received on each
Closing Date, a certificate of John A. Kraeutler, President and Chief Operating
Officer, and Gerard Blain, Vice President and Chief Financial Officer, of the
Company, to the effect that:
(i) The representations and warranties of the
Company and the Selling Shareholder set forth in Section 2(a) hereof
are true and correct as of the date of this Agreement and as of the
date of such certificate, and the Company has complied with all the
agreements and satisfied all the conditions to be performed or
satisfied by it at or prior to the date of such certificate;
(ii) The Commission has not issued an order
preventing or suspending the use of the Prospectus or any Preliminary
Prospectus or any amendment or supplement thereto; no stop order
suspending the effectiveness of the Registration Statement has been
issued; and to the knowledge of the respective signatories, no
proceedings for that purpose have been initiated or are pending or
contemplated under the Act or under the Blue Sky Laws of any
jurisdiction;
(iii) Each of the respective signatories has
carefully examined the Registration Statement and the Prospectus, and
any amendment or supplement thereto, including any documents filed
under the Exchange Act and deemed to be incorporated by reference in
the Registration Statement, and such documents contain all statements
required to be stated therein, and do not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and since the date on which the Registration Statement
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was initially filed, no event has occurred that was required to be set
forth in an amendment or supplement to the Prospectus or in an
amendment to the Registration Statement that has not been so set
forth, and there has been no document required to be filed under the
Exchange Act that upon such filing would be deemed to be incorporated
by reference in the Registration Statement that has not been so filed;
and
(iv) Since the date on which the Registration
Statement was initially filed with the Commission, there has not
occurred any Material Adverse Change or development involving, or
which could be expected to involve, a Material Adverse Change, whether
or not arising from transactions in the ordinary course of business,
except as disclosed in the Prospectus and the Registration Statement
as heretofore amended or (but only if the Representatives expressly
consent thereto in writing) as disclosed in an amendment or supplement
thereto filed with the Commission and delivered to the Representatives
after the execution of this Agreement; since such date and except as
so disclosed or in the ordinary course of business, the Company has
not incurred any liability or obligation, direct or indirect, or
entered into any transaction which is material to the Company; since
such date and except as so disclosed, there has not been any change in
the outstanding capital stock of the Company, or any change that is
material to the Company in the short-term debt or long-term debt of
the Company; since such date and except as so disclosed, the Company
has not acquired any of the Common Stock or other capital stock of the
Company nor has the Company declared or paid any dividend, or made any
other distribution, upon its outstanding Common Stock payable to
shareholders of record on a date prior to such Closing Date; since
such date and except as so disclosed, the Company has not incurred any
material contingent obligations, and no material litigation has
commenced or been threatened against the Company; and, since such date
and except as so disclosed, the Company has not sustained any material
loss or interference from any strike, fire, flood, windstorm, accident
or other calamity (whether or not insured) or from any court or
governmental action, order or decree.
The delivery of the certificate provided for in this
subsection (g) shall be and constitute a representation and warranty of the
Company as to the facts required in the immediately foregoing clauses (i),
(ii), (iii) and (iv) to be set forth in said certificate.
(h) The Representatives shall have received a certificate
from the Selling Shareholder (which may be signed by such Selling Shareholder's
Attorneys-in-Fact, or either of them), dated the Firm Closing Date or the
Option Closing Date, as the case may be, to the effect that: (i) the
representations and warranties of such Selling Shareholder in Sections 2 and 3
of this Agreement are true and correct as of the date of this Agreement and as
of the date of such certificate, as if again made on and as of such Closing
Date, and the Selling Shareholder has complied with all of the agreements and
satisfied all of the conditions to be performed or satisfied by the Selling
Shareholder at or prior to such Closing Date; and (ii) the Selling Shareholder
has no reason to believe that the Registration Statement or any amendment
thereto, including any documents filed under the Exchange Act and deemed to be
incorporated by
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reference in the Registration Statement, at the time it was declared effective
by the Commission contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus, as amended or
supplemented, including any documents filed under the Exchange Act and deemed
to be incorporated by reference in the Registration Statement, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(i) At the time this Agreement is executed and also on
each Closing Date, there shall be delivered to the Representatives a letter
addressed to the Representatives, as representatives of the Underwriters, from
Arthur Andersen LLP, the Company's independent accountants, the first letter to
be dated the date of this Agreement, the second letter to be dated the Firm
Closing Date and the third letter (if applicable) to be dated the Option
Closing Date, which shall be in form and substance satisfactory to the
Representatives and shall, without limitation, contain financial information
concerning the Company and the Subsidiaries as of a date within five days of
the date of such letter. There shall not have been any change or decrease set
forth in any of the letters referred to in this subsection (i) that makes it
impracticable or inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase of the Shares as contemplated hereby.
(j) The Shares shall have been qualified or registered
for sale under the Blue Sky Laws of such jurisdictions as shall have been
specified by the Representatives, and the underwriting terms and arrangements
for the offering shall have been cleared by the NASD.
(k) Such further certificates and documents as the
Representatives may reasonably request (including certificates of officers of
the Company).
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory to
the Representatives and to Foley & Lardner, counsel for the Underwriters, which
Representatives and Firm agree to act reasonably in so determining. The Company
and the Selling Shareholder shall furnish the Representatives with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as the Representatives may reasonably request.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at either Closing Date is not so satisfied, this
Agreement at the election of the Representatives will terminate upon
notification to the Company and the Attorneys-in-Fact, or any one of them, for
the Selling Shareholder, without liability on the part of any Underwriter,
including the Representatives, the Company or the Selling Shareholder except
for the provisions of Section 7(f) hereof, the expenses to be paid by the
Selling Shareholder pursuant to Section 8 hereof and except to the extent
provided in Section 11 hereof.
10. MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT.
The Company will use its best efforts and the Selling Shareholder will use his
best efforts to prevent the issuance of any
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stop order suspending the effectiveness of the Registration Statement and, if
such stop order is issued, to obtain as soon as possible the lifting thereof.
11. INDEMNIFICATION.
(a) The Company and the Selling Shareholder, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act from and against any losses, claims, damages, expenses,
liabilities or actions in respect thereof ("Claims"), joint or several, to
which such Underwriter or each such controlling person may become subject under
the Act, the Exchange Act, Blue Sky Laws or other federal or state statutory
laws or regulations, at common law or otherwise (including payments made in
settlement of any litigation), insofar as such Claims arise out of or are based
upon any breach of any representation, warranty or covenant made by the Company
and/or the Selling Shareholder in this Agreement, or any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or in any application filed under any Blue Sky Law or other
document executed by the Company for that purpose or based upon written
information furnished by the Company and filed in any state or other
jurisdiction to qualify any or all of the Shares under the securities laws
thereof (any such document, application or information being hereinafter called
a "Blue Sky 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. The Company and
the Selling Shareholder, jointly and severally, agree to reimburse each
Underwriter and each such controlling person for any legal fees or other
expenses incurred by such Underwriter or any such controlling person in
connection with investigating or defending any such Claim; provided, however,
that the Company and the Selling Shareholder will not be liable in any such
case to the extent that any such Claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus or
supplement thereto or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Company pursuant to
Section 5 of this Agreement and provided, further, that with respect to any
untrue statement or omission, or alleged untrue statement or omission, made
in any Preliminary Prospectus, the indemnity agreement contained in this
subsection 11 (a) shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities purchased
shares if such untrue statement or omission or alleged untrue statement or
omission made in such Preliminary Prospectus is eliminated or remedied in the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto to the Underwriters) and such loss, claim,
damage or liability of such Underwriter results from the fact that there was
not furnished to such person, at or prior to the written confirmation of the
sale of such Shares to such person, a copy of the Prospectus (as so amended or
supplemented) if the Company had previously furnished copies thereof to such
Underwriter. The indemnification obligations of the Company and the Selling
Shareholder as provided above are in addition to and in no way limit any
liabilities the Company and the Selling Shareholder may otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors and each of its
officers who signs the Registration Statement, and each person, if any, who
controls the Company within the meaning of the Act or the Exchange Act and the
Selling Shareholder against any Claim to which the Company, or any such
director, officer, controlling person or the Selling Shareholder may become
subject under the Act, the Exchange Act, Blue Sky Laws or other federal or
state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter and Cleary Gull), insofar as such
Claim arises out of or is based upon any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, any Preliminary
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Prospectus, the Prospectus, or any amendment or supplement thereto, or in any
Blue Sky Application, or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or in any Blue Sky Application, in reliance solely upon and
in conformity with the written information furnished by the Representatives to
the Company pursuant to Section 5 of this Agreement. Each Underwriter will
severally reimburse any legal fees or other expenses incurred by the Company,
or any such director, officer, controlling person or the Selling Shareholder in
connection with investigating or defending any such Claim, and from any and all
Claims solely resulting from failure of an Underwriter to deliver a Prospectus,
if the person asserting such Claim purchased Shares from such Underwriter and a
copy of the Prospectus (as then amended if the Company shall have furnished any
amendments thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to
the written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended) would have cured the defect giving rise to such
Claim. The indemnification obligations of each Underwriter as provided above
are in addition to any liabilities any such Underwriter may otherwise have.
Notwithstanding the provisions of this section, no Underwriter shall be
required to indemnify or reimburse the Company, or any officer, director,
controlling person or Selling Shareholder in an aggregate amount in excess of
the total price at which the Shares purchased by any such Underwriter hereunder
were offered to the public, less the amount of any damages such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) Promptly after receipt by an indemnified party under
this section of notice of the commencement of any action in respect of a Claim,
such indemnified party will, if a Claim in respect thereof is to be made
against an indemnifying party under this section, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve an indemnifying party from any liability it
may have to any indemnified party under this section or otherwise, except to
the extent the indemnifying party is actually prejudiced by the failure to give
such notice. In case any such action is brought against any indemnified party,
and such indemnified party notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in and, to the
extent that he, she or it may wish, jointly with all other indemnifying
parties, similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and any
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to the indemnified party and/or
other indemnified parties which are different from or additional to those
available to any indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action 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 any claims that are the subject matter
of such action.
(d) Upon receipt of notice from the indemnifying party to
such indemnified party of the indemnifying party's election to assume the
defense of such action and upon
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approval by the indemnified party of counsel selected by the indemnifying
party, the indemnifying party will not be liable to such indemnified party
under this section for any legal fees or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof, unless:
(i) the indemnified party shall have employed
separate counsel in connection with the assumption of legal defenses
in accordance with the proviso to the last sentence of subsection (c)
of this Section (it being understood, however, that the indemnifying
party shall not be liable for the legal fees and expenses of more than
one separate counsel, approved by Cleary Gull, if one or more of the
Underwriters or their controlling persons are the indemnified
parties);
(ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the
indemnified party's notice to the indemnifying party of commencement
of the action; or
(iii) the indemnifying party has authorized the
employment of counsel at the expense of the indemnifying party.
(e) If the indemnification provided for in this section
is unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Shareholder
and the Underwriters from the offering of the Shares; or
(ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above, but also the relative fault of the Company, the
Selling Shareholder and the Underwriters in connection with the
statements or omissions which resulted in such Claim, as well as any
other relevant equitable considerations.
The relative benefits received by each of the Company, the
Selling Shareholder and the Underwriters shall be deemed to be in such
proportion so that the Underwriters are responsible for that portion
represented by the percentage that the amount of the underwriting discounts and
commissions per share appearing on the cover page of the Prospectus bears to
the public offering price per share appearing thereon, and the Company
(including its officers and directors and controlling persons), and the Selling
Shareholder is responsible for the remaining
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portion. The relative fault of the Company, the Selling Shareholder and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Shareholder or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the Claims referred to above shall be deemed to include, subject to
the limitations set forth in subsections (c) and (d) of this section, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
(f) The Company, the Selling Shareholder and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this section were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any other method or allocation which does not take into account the equitable
considerations referred to in subsection (e) of this Section. Notwithstanding
the other provisions of this section, no Underwriter shall be required to
contribute any amount that is greater than the amount by which the total price
at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this section are several in proportion to their respective underwriting
commitments and not joint.
12. DEFAULT OF UNDERWRITERS. It shall be a condition to
the obligations of each Underwriter to purchase the Shares in the manner as
described herein, that, except as hereinafter provided in this section, each of
the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on
either the Firm Closing Date or the Option Closing Date and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed ten percent (10%) of the total number of
Shares which the Underwriters are obligated to purchase on such Closing Date,
the Representatives may make arrangements for the purchase of such Shares by
other persons, including any of the Underwriters, but if no such arrangements
are made by such Closing Date the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Shares which such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of Shares with respect to which such default or defaults occur
is greater than ten percent (10%) of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, and arrangements
satisfactory to the Representatives for the purchase of such Shares by other
persons are not made within thirty-six hours after such default, then this
Agreement will terminate without liability on the part of any nondefaulting
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Underwriter, the Company or the Selling Shareholder, except for the expenses to
be paid by the Company and the Selling Shareholder pursuant to Section 8 hereof
and except to the extent provided in Section 11 hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, for not more than seven business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
13. EFFECTIVE DATE. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto. Such execution and delivery shall include an executed copy of this
Agreement sent by telecopier, facsimile transmission or other means of
transmitting written documents.
14. TERMINATION. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof, this Agreement
may be terminated by the Representatives prior to or on the Firm Closing Date
and the over-allotment option from the Company and the Selling Shareholder
referred to in Section 3(c) hereof, if exercised, may be cancelled by the
Representatives at any time prior to or on the Option Closing Date, if in the
judgment of the Representatives, payment for and delivery of the Shares is
rendered impracticable or inadvisable because:
(a) trading in the Common Stock shall have been suspended
by the Commission or the Nasdaq National Market; additional restrictions, not
in force and effect on the date hereof, shall have been imposed upon trading in
securities generally; minimum or maximum prices shall have been established on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market; or trading in securities generally shall have been suspended or
materially limited on either such exchange or on the Nasdaq National Market;
(b) a general banking moratorium shall have been
established by either federal or state authorities in New York, Ohio or
Wisconsin;
(c) any event shall have occurred or shall exist which
makes untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or which is not reflected in the
Registration Statement but should be reflected therein to make the statements
or information contained therein not misleading in any material respect; or
(d) an outbreak or escalation of hostilities or other
national or international calamity, crisis or emergency or any substantial
change in political, financial or economic
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conditions shall have occurred or shall have accelerated to such extent, in the
judgment of the Representatives, as to have a material adverse effect on the
financial markets of the United States, or to make it impracticable or
inadvisable to proceed with completion of the sale of and payment for the
Shares as provided in this Agreement.
Any termination pursuant to this Section shall be without
liability on the part of any Underwriter to the Company or the Selling
Shareholder, or on the part of the Company or the Selling Shareholder to any
Underwriter, except for expenses to be paid by the Selling Shareholder pursuant
to Section 8 hereof or reimbursed by the Selling Shareholder pursuant to
Section 7(f) hereof and except as to indemnification to the extent provided in
Section 11 hereof.
15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties, covenants
and other statements of the Company, of its officers or directors, of the
Selling Shareholder, and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Shareholder or the Company or any of its or their partners, officers, directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
16. NOTICES. All communications hereunder will be in
writing and, if sent to the Representatives, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to Cleary Gull
Reiland & McDevitt Inc. at 100 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, Attention: Chris Barnes, Vice President, with a copy to Patrick G.
Quick, Esq., Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202-5367; and if sent to the Company, will be mailed, delivered, telecopied
(with receipt confirmed) or telegraphed and confirmed to the Company at
Meridian Diagnostics, Inc., Attention: Gerald Blain, 3471 River Hills Drive,
Cincinnati, Ohio 45244, with a copy to Edward E. Steiner, Esq., Keating,
Muething & Klekamp, 1800 Provident Tower, One East Fourth Street, Cincinnati,
Ohio 45202; and, if sent to the Selling Shareholder, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to the
Attorneys-in-Fact, or either of them, in care of the Company, with copies to J.
Jeffrey Brausch, J. Jeffrey Brausch and Company, 203 South Court Street,
Medina, Ohio 44256 and Edward E. Steiner, Esq., Keating, Muething & Klekamp,
1800 Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202
17. SUCCESSORS. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors,
personal representatives and assigns, and to the benefit of the officers and
directors and controlling persons referred to in Section 11 hereof and no other
person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
18. PARTIAL UNENFORCEABILITY. If any section, paragraph,
clause or provision of this Agreement is for any reason determined to be
invalid or unenforceable, such
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determination shall not affect the validity or enforceability of any other
section, paragraph clause or provision hereof.
19. APPLICABLE LAW; COUNTERPARTS. This Agreement shall
be governed by and construed in accordance with the internal laws of the State
of Wisconsin without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts which together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholder and the several Underwriters, including the Representatives, all in
accordance with its terms.
Very truly yours,
MERIDIAN DIAGNOSTICS, INC.
(the "Company")
By: _______________________________
William J. Motto
Chairman and Chief Executive Officer
_____________________________________
Jerry L. Ruyan
(the "Selling Shareholder")
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
CLEARY GULL REILAND & MCDEVITT INC.
THE OHIO COMPANY
RONEY & CO.
Acting as Representatives of the
several Underwriters (including themselves)
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identified in Schedule I annexed hereto.
By: CLEARY GULL REILAND & MCDEVITT INC.
By: ____________________________________
Chris Barnes, Vice President
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MERIDIAN DIAGNOSTICS, INC.
EXHIBIT A
---------
Subsidiary Ownership
---------- ---------
Omega Technologies, Inc. 100% owned by the Company
Meridian Diagnostics International, Inc. 100% owned by the Company
Meridian Diagnostics Europe s.r.l. 99% (22,500 quotas) owned
by the Company and 1% owned
(225 quotas) owned by
Todd Motto
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MERIDIAN DIAGNOSTICS, INC.
SCHEDULE I
----------
NUMBER OF FIRM
SHARES TO
NAME OF UNDERWRITER BE PURCHASED
------------------- ------------
Cleary Gull Reiland & McDevitt Inc.
The Ohio Company
Roney & Co.
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