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EXHIBIT 1.01
FORM OF
UNDERWRITING AGREEMENT
August __, 1996
Dillon, Read & Co. Inc.
McDonald & Company Securities, Inc.
as Managing Underwriters
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
Ladies and Gentlemen:
Gradall Industries Inc., a Delaware corporation (the "Company"),
proposes to issue and sell, and certain of the persons named in Schedule B
propose to sell to the underwriters named in Schedule A (the "Underwriters") an
aggregate of 3,500,000 shares (the "Firm Shares") of Common Stock, par value
$.001 per share (the "Common Stock"), of the Company, of which 2,500,000 shares
are to be issued and sold by the Company and an aggregate of 1,000,000 shares
are to be sold by such persons in the respective amounts set forth opposite
their names in Schedule B. In addition, solely for the purpose of covering
overallotments, certain of the persons named in Schedule B propose to issue and
sell, at the Underwriters' option, up to 525,000 additional shares of the Common
Stock (the "Additional Shares") in the respective amounts set forth opposite
their names in Schedule B. The Additional Shares and the Firm Shares are
collectively referred to as the "Shares". The Shares are described in the
Prospectus which is referred to below. The persons named in Schedule B are
collectively referred to as the "Selling Stockholders". The Selling Stockholders
proposing to sell Firm Shares are collectively referred to as the "Firm Share
Selling Stockholders", and the Selling Stockholders proposing to sell additional
Shares are collectively referred to as the "Additional Share Selling
Stockholders".
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the published rules and regulations
thereunder (collectively, the "Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1, including a
prospectus, relating to the Shares. The Company has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary prospectuses
(collectively, the "Preliminary Prospectus") relating to the Shares. Except
where the context otherwise requires, the registration statement in the form in
which it becomes effective, including all documents filed as a part thereof, and
including any registration statement filed pursuant to Rule 462(b) under the
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Act increasing the size of the offering registered under the Act and any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the Act, is
herein called the "Registration Statement", and the prospectus in the form most
recently filed by the Company with the Commission pursuant to Rule 424(b) under
the Act or, if no such filing is required, in the form of final prospectus
included in the Registration Statement at the time it became effective, is
herein called the "Prospectus".
The Company, the Selling Stockholders and the Underwriters agree
as follows:
1. Sale and Purchase. On the basis of the representations and
warranties and the other terms and conditions herein set forth, the Company and
each Firm Share Selling Stockholder, severally and not jointly, agrees to sell
to the respective Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and each such Firm Share Selling
Stockholder the respective number of Firm Shares (subject to such reasonable
adjustment as you may determine to avoid fractional shares) which bears the same
proportion to the number of Firm Shares to be sold by the Company or by that
Firm Share Selling Stockholder, as the case may be, as the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule A bears to the total
number of Firm Shares to be sold by the Company and the Firm Share Selling
Stockholders, in each case at a purchase price of $[ ] per Share. You may
release the Firm Shares for public sale promptly after this Agreement becomes
effective. You may from time to time increase or decrease the public offering
price after the initial public offering to such extent as you may determine.
In addition, on the basis of the representations and warranties
and the other terms and conditions herein set forth, the Additional Share
Selling Stockholders hereby grant to the several Underwriters an option to
purchase, and the Underwriters shall have the right to purchase, severally and
not jointly, from the Additional Share Selling Stockholders all or a portion of
the Additional Shares as may be necessary to cover overallotments made in
connection with the offering of the Firm Shares, at the same purchase price per
share to be paid by the several Underwriters to the Company and the Firm Share
Selling Stockholders for the Firm Shares. This option may be exercised in whole
or in part from time to time on or before the thirtieth day following the date
hereof, by written notice to the Company. Any such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (any such
date and time being
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herein referred to as an "additional time of purchase"); provided, however, that
no additional time of purchase shall occur earlier than the time of purchase (as
defined below) nor earlier than the second business day* after the date on which
the option shall have been exercised nor later than the eighth business day
after the date on which the option shall have been exercised. The number of
Additional Shares to be sold by each Additional Share Selling Stockholder at an
additional time of purchase shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased at such additional
time of purchase as the number of Additional Shares set forth opposite the name
of such Additional Share Selling Stockholder on Schedule B bears to the total
number of Additional Shares (subject, in each case, to such reasonable
adjustment as you may determine to eliminate fractional shares). The number of
Additional Shares to be sold to each Underwriter at an additional time of
purchase shall be the number which bears the same proportion to the aggregate
number of Additional Shares being purchased at such additional time of purchase
as the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A bears to the total number of Firm Shares (subject, in each case, to
such adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company and to each Firm Share Selling
Stockholder by wire-transfer in immediately available funds to accounts
designated by the Company and such Firm Share Selling Stockholder in Schedule B,
against delivery of the certificates for the Firm Shares to you for the
respective accounts of the Underwriters at the office of Dillon, Read & Co. Inc.
in New York City. Such payment and delivery shall be made at 9:30 A.M., New York
City time, on August __, 1996 (unless another time shall be agreed to by you,
the Company and the Selling Stockholders or unless postponed in accordance with
the provisions of Section 10). The time at which such payment and delivery are
actually made is called the "time of purchase". Certificates for the Firm Shares
shall be delivered to you in definitive form in such names and in such
denominations as you shall specify to the Company and the Selling Stockholders
on the second business day preceding the time of purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by you, the
Company and the Firm Share Selling Stockholders agree to make such certificates
available to you for such purpose at least one full business day preceding the
time of purchase.
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* As used herein, "business day" shall mean a day on which the New
York Stock Exchange is open for trading.
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Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company and the Additional
Share Selling Stockholders agree to make such certificates available to you for
such purpose at least one full business day preceding the additional time of
purchase.
3. Representations and Warranties of the Company and MLGA Fund II,
L.P. The Company and MLGA Fund II, L.P. ("Fund II") jointly and severally,
represent and warrant to each of the Underwriters and the other Selling
Stockholders that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act; when the Registration Statement becomes
or became effective and at all times subsequent thereto up to the time
of purchase and the additional time of purchase, the Registration
Statement and the Prospectus, and any supplements or amendments
thereto, complied and will comply in all material respects with the
provisions of the Act; and the Registration Statement at all such times
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company and Fund II make no representation
or warranty with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for
use in the Registration Statement or the Prospectus and set forth in
the section of the Registration Statement and the Prospectus entitled
"Underwriting".
(b) As of the date of this Agreement, the Company has an
authorized capitalization as set forth under the column entitled
"[June] 30, 1996 Actual" in the section
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of the Registration Statement and the Prospectus entitled
"Capitalization" and, after application of the net proceeds of the sale
of the Shares by the Company contemplated hereby, the capitalization of
the Company will be as set forth under the column entitled "[June] 30,
1996 As Adjusted" in the section of the Registration Statement and the
Prospectus entitled "Capitalization"; all of the issued and outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable and at and after
the time of purchase will be free of statutory and contractual
preemptive rights.
(c) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware
with full power and authority to (i) own its properties and conduct its
business as described in the Registration Statement and the Prospectus
and (ii) execute and deliver this Agreement and to issue, sell and
deliver the Shares to be issued and sold by the Company as herein
contemplated.
(d) All of the issued and outstanding shares of capital stock of
each of the subsidiaries of the Company (the "Subsidiaries") are owned
directly by the Company; all of such shares have been duly authorized
and validly issued and are fully paid and nonassessable and, except as
described in the Prospectus, are owned free and clear of any pledge,
lien, encumbrance, security interest or other claim; there are no
outstanding rights, subscriptions, warrants, calls, preemptive rights,
options or other agreements of any kind with respect to the capital
stock of any of the Subsidiaries.
(e) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation, with full corporate power
and authority to own its respective properties and to conduct its
respective businesses.
(f) Each of the Company and each of the Subsidiaries is duly
qualified or licensed by and is in good standing in each jurisdiction
in which it owns or leases property or conducts its business and in
each other jurisdiction in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material adverse
effect on the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole; each of the Company and each of the
Subsidiaries is in compliance in all material respects
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with the laws, orders, rules, regulations and directives issued or
administered by each such jurisdiction.
(g) Neither the Company nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of, or default under),
(i) its charter or bylaws or (ii) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
license, indenture, lease, mortgage, deed of trust, bank loan or credit
agreement, supply or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them may be
bound or affected that would have a material adverse effect on the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole. The execution, delivery and performance of this
Agreement, the issuance of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in
any breach of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would constitute a breach of,
or default under), the charter or bylaws of the Company or any of the
Subsidiaries or under any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement, material supply
agreement or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or their
properties may be bound or affected, or under any federal, state, local
or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries.
(h) The Firm Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to and paid
for by the Underwriters as contemplated hereby, will be duly and
validly issued and fully paid and nonassessable, free and clear of any
pledge, lien, encumbrance, security interest, preemptive right or other
claim.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus; and the certificates
for the Shares are in due and proper form and the holders of the Shares
after making payment therefor will not be
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subject to personal liability by reason of being such holders.
(k) No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares as contemplated hereby, other
than registration of the Shares under the Act, clearance of the
offering of the Shares with the National Association of Securities
Dealers, Inc. (the "NASD") and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters.
(l) Each person who has the right, contractual or otherwise, to
cause the Company to register pursuant to the Act any securities of the
Company in consequence of the issue and sale of the Shares to the
Underwriters hereunder either included such securities in the
Registration Statement or duly waived such right and each person who
has the right, contractual or otherwise, to cause the Company to issue
to it any securities of the Company in consequence of the issue and
sale of the Shares to the Underwriters hereunder has duly waived such
right.
(m) Coopers & Lybrand L.L.P., whose reports on the consolidated
financial statements of the Company and the Subsidiaries are included
in the Registration Statement and the Prospectus, are independent
public accountants with respect to the Company as required by the Act
and the applicable published rules and regulations thereunder.
(n) All legal or governmental proceedings, contracts or documents
of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required.
(o) Except as described in the Prospectus, there is no action,
suit or proceeding pending or to the best of the Company's knowledge,
threatened against the Company or any of the Subsidiaries or any of
their properties, at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board,
body, authority or agency that could result in a judgment, decree or
order having a material adverse effect on the properties, assets,
operations, business, business prospects or condition (financial or
other) of the Company and the Subsidiaries taken as a whole.
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(p) The audited and unaudited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial condition of the Company and the Subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved, except as set forth in the notes to
such financial statements and except to the extent that certain
footnote disclosures regarding the unaudited financial statements have
been omitted in accordance with the applicable rules of the Commission.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
may be otherwise stated in the Registration Statement or the
Prospectus, there has not been: (A) any material adverse change in the
properties, assets, operations, business, business prospects or
condition (financial or other), present or prospective, of the Company
and the Subsidiaries taken as a whole; (B) any transaction contemplated
or entered into by the Company or any of the Subsidiaries that would
require an amendment to the Registration Statement or a supplement to
the Prospectus or have a material adverse effect on the properties,
assets, operations, business, business prospects or condition
(financial or other) of the Company and the Subsidiaries taken as a
whole; or (C) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of the Subsidiaries that is
material to the Company and the Subsidiaries taken as a whole, other
than contracts, purchase orders or commitments for capital equipment
and inventory and borrowings under the existing credit facility in the
ordinary course of business and consistent with past practice.
(r) The Company has obtained the agreement of the stockholders
listed on Schedule C not to sell, contract to sell, grant any option to
sell, transfer or otherwise dispose of, directly or indirectly, any
shares of Common Stock, or securities convertible into or exchangeable
for Common Stock or warrants or other rights to purchase Common Stock,
for a period of 180 days from the date of the Prospectus without the
prior written consent of Dillon, Read & Co. Inc.
(s) Neither the Company nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances
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or wastes, pollutants or contaminants ("Environmental Laws"), nor any
federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages
and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which
in each case would result in any material adverse effect on the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole.
(t) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business, except
for those the absence of which would not have a material adverse effect
on the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole; the Company and each of the Subsidiaries has
fulfilled and performed all of its material obligations with respect to
such permits and is in material compliance with the terms of such
permits, and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any
such permit; and, except as described in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of the Subsidiaries.
(u) To the best of the Company's knowledge, there are no costs and
liabilities associated with or arising in connection with Environmental
Laws (including without limitation any capital or operating expenditure
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties), singly or in the aggregate, which would have a material
adverse effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of the Company and
the Subsidiaries taken as a whole.
(v) Neither the Company, any of the Subsidiaries, nor, to the best
of the Company's knowledge, any employee of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or any of
the Subsidiaries prohibited by law, and no funds of the
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Company or any of the Subsidiaries have been set aside to be used for
any payment prohibited by law.
(w) The Company and the Subsidiaries have filed all federal or
state income or franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no tax deficiency
which has been or, to the best of the Company's knowledge, might be
asserted against the Company or any of the Subsidiaries that would have
a material adverse effect on the consolidated financial position or
results of operations of the Company and the Subsidiaries; all material
tax liabilities are adequately provided for on the books of the Company
and the Subsidiaries.
(x) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions herein
contemplated.
(y) The Company and the Subsidiaries have good title to all
properties and assets owned by them, in each case free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages
and defects (except such as are described or referred to in the
Prospectus and the financial statements and the notes thereto contained
therein or such as do not interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries).
(z) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is subject to regulation under such Act.
4. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder, severally and not jointly, represents and warrants to
each Underwriter that:
(a) Such Selling Stockholder is, and at the time of delivery of
the Shares to be sold by such Selling Stockholder will be, the lawful
owner of the number of Shares or securities convertible into or
warrants exercisable for the number of Shares to be sold by such
Selling Stockholder pursuant to this Agreement and, at the time of
delivery thereof, will have valid and marketable title to such Shares,
and upon delivery of and payment for such Shares the Underwriters will
acquire valid and marketable title to such Shares free and clear of any
claim, lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title, assuming each of the
Underwriters has purchased the Shares purchased by it in good faith and
without notice of any adverse claim.
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(b) Such Selling Stockholder has and at the time of delivery of
such Shares will have full legal right, power and capacity, and any
approval required to be obtained by such Selling Stockholder by law
(other than approvals required by the Act, applicable blue sky laws or
from the NASD) to sell, assign, transfer and deliver such Shares in the
manner provided in this Agreement.
(c) This Agreement has been duly authorized, executed and
delivered by such Selling Stockholder. The Custody Agreement and the
Power of Attorney among the Company, William C. Ughetta, Jr., as
custodian and the Selling Stockholders (the "Custody Agreement and
Power of Attorney") has been duly executed and delivered by such
Selling Stockholder and constitutes the legal, valid and binding
agreement of such Selling Stockholder, enforceable against such Selling
Stockholder in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity.
(d) Such Selling Stockholder has duly and irrevocably authorized
the Attorney-in-Fact (as defined in the Custody Agreement and Power of
Attorney), on behalf of such Selling Stockholder, to execute and
deliver this Agreement and any other document necessary or desirable in
connection with the transactions contemplated hereby and to deliver the
Shares to be sold by such Selling Stockholder and receive payment
therefor pursuant hereto.
(e) All information furnished in writing by or on behalf of such
Selling Stockholder to you or the Company specifically for use in the
Registration Statement and the Prospectus, and any supplement or
amendment thereto, is and will be when the Registration Statement
became effective and at all times subsequent thereto up to the time of
purchase and the additional time of purchase, true and correct and
complete and at all such times did not and will not contain any untrue
statement of 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.
(f) The consummation of the transactions contemplated hereby and
by the Custody Agreement and Power of Attorney to be consummated by
such Selling Stockholder and the fulfillment of the terms hereof and
thereof by such Selling Stockholder will not constitute a breach or
violation of or default under any trust,
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indenture, agreement or other instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be
required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares); promptly
to advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and to use its best efforts to obtain the withdrawal
of any order of suspension at the earliest practicable moment;
(b) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendment or supplement
thereto after the effective date of the Registration Statement) as the
Underwriters may request for the purposes contemplated by the Act;
(c) to advise you promptly and if requested by you to confirm such
advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes
effective and (ii) when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act, if required under the Act (which
the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for or
the entry of a stop order suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such
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order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus and to
file no such amendment or supplement to which you shall object in
writing;
(e) to furnish to you and, upon request to each of the other
Underwriters, for a period of five years from the date of this
Agreement (i) copies of all reports or other communications that the
Company shall send to its stockholders or from time to time shall
publish or publicly disseminate and (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar form as may be designated by the
Commission, and any other document filed by the Company pursuant to
Section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(f) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a prospectus
relating to the Shares is required to be delivered under the Act that,
in the reasonable judgment of the Company, would require the making of
any change in the Prospectus then being used, so that the Prospectus,
as then supplemented, would not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading and, during such time, promptly to prepare and
furnish, at the Company's expense, to the Underwriters such amendments
or supplements to such Prospectus as may be necessary to reflect any
such change in such quantities as requested by the Underwriters, and to
furnish to you a copy of such proposed amendment or supplement before
filing any such amendment or supplement with the Commission;
(g) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which need not be
audited and which will satisfy the provisions of Section 11(a) of the
Act including, at the option of the Company, Rule 158) covering a
period of 12 months beginning after the effective date of the
Registration Statement but ending not later than 15 months after the
date of the Registration Statement, as soon as is reasonably
practicable after the termination of such 12-month period;
(h) to furnish to you three signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
conformed copies of the
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foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but
not later than two business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements, if any,
of the Company and the Subsidiaries that have been read by the
Company's independent certified public accountants as stated in their
letter to be furnished pursuant to Section 8(b);
(j) to apply the net proceeds from the sale of the Shares sold by
the Company in the manner set forth under the caption "Use of Proceeds"
in the Registration Statement and the Prospectus;
(k) to use its best efforts to cause the Shares to be included in
the Nasdaq National Market;
(l) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement otherwise becomes effective or is
terminated, to pay all expenses, fees and taxes (other than (x) any
transfer taxes and (y) fees and disbursements of your counsel except as
set forth under Section 7 and clauses (iii) and (iv) below) in
connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, and the printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (ii) the issuance, sale and delivery of the
Shares, (iii) the word processing or printing of this Agreement and any
dealer agreements, and the reproduction or printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for
offering and sale under state laws as aforesaid (including legal fees
and filing fees and other disbursements of your counsel) and the
printing and furnishing of copies of any blue sky surveys to you and to
dealers, (v) any listing of the Shares on any securities exchange or
qualification of the Shares for inclusion in the Nasdaq National Market
and any registration thereof under the Exchange Act, (vi) any filing
for review of the public offering of the Shares by the NASD and (viii)
the performance of the Company's and the Selling Stockholders' other
obligations hereunder;
(m) not to sell, contract to sell, grant any option to sell,
transfer or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities
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convertible into or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock or permit the registration under the
Act of any shares of Common Stock, except for the registration of the
Shares and the sales to you pursuant to this Agreement for a period
commencing on the date hereof and continuing for 180 days after the
date of the Prospectus, without the prior written consent of Dillon,
Read & Co. Inc., other than the issuance of Common Stock upon the
exercise of stock options outstanding on the date hereof and the grant
of stock options under existing stock option plans; and
(n) to refrain from investing the proceeds from the sale of the
Shares in a manner to cause the Company or any of the Subsidiaries to
become an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6. Certain Covenants of the Selling Stockholders. Each Selling
Stockholder agrees, severally and not jointly, with each Underwriter that such
Selling Stockholder will not sell, contract to sell, grant any option to sell,
transfer or otherwise dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock, except for the sales to you
pursuant to this Agreement, for a period commencing on the date hereof and
continuing for 180 days after the date of the Prospectus, without the prior
written consent of Dillon, Read & Co. Inc.
7. Reimbursement of Underwriters' Expenses. If the Firm Shares or
the Additional Shares are not delivered for any reason, other than the failure
of one or more of the Underwriters to purchase the Firm Shares or the Additional
Shares as provided herein (unless such failure is permitted under the provisions
of Section 8 or Section 9(b) of this Agreement), the Company will reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of their counsel.
8. Conditions of Underwriters' and Selling Stockholders'
Obligations. The several obligations of the Underwriters and of the Selling
Stockholders hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and other Selling Stockholders on the date
hereof and at the time of purchase (and the several obligations of the
Underwriters at any additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the time of purchase and at such
additional time of purchase, as the case may be), the performance by each of the
Company and the Selling
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Stockholders of its and their obligations hereunder and to the following
conditions:
(a) The Company shall furnish to you at the time of purchase and
at such additional time of purchase, as the case may be, an opinion of
Black, McCuskey, Souers & Arbaugh, counsel for the Company, addressed
to the Underwriters and the Selling Stockholders, and dated the time of
purchase or such additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
satisfactory to Davis Polk & Wardwell, counsel for the Underwriters,
stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority (A) to
own its properties and conduct its business as described in the
Registration Statement and the Prospectus and (B) to execute and
deliver this Agreement and to issue, sell and deliver the Shares
as herein contemplated;
(ii) each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the state in which such Subsidiary is incorporated, with
full corporate power and authority to own its properties and to
conduct its business as described in the Registration Statement
and the Prospectus;
(iii) each of the Company and each of the Subsidiaries is
duly qualified or licensed to do business by and is in good
standing as a foreign corporation in each jurisdiction in which it
conducts business or owns property so as to require such
qualification or license and in which the failure, individually or
in the aggregate, to be so licensed or qualified could have a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of
the Company and the Subsidiaries taken as a whole;
(iv) all of the issued and outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable and, except as set
forth in the Prospectus, are owned, directly or indirectly, by the
Company free and clear of any pledge, lien, encumbrance, security
interest, preemptive right or other claim, and there are no
rights, warrants, options or other agreements to acquire or
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instruments convertible into or exchangeable for any shares of
capital stock or other equity interest of any Subsidiary, except
as set forth in the Prospectus;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) (A) the Shares to be issued and sold by the Company
hereunder, when delivered to and paid for by the Underwriters,
will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of any pledge, lien, encumbrance,
claim or preemptive right; and (B) the certificates for the Shares
are in due and proper form and the holders of the Shares will not
be subject to personal liability by reason of being such holders;
(vii) (A) the authorized capital stock of the Company is as
set forth under the heading "Description of Capital Stock" in the
Registration Statement and the Prospectus and (B) the outstanding
shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid, nonassessable and free of
statutory and contractual preemptive rights;
(viii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus;
(ix) the Registration Statement and the Prospectus (except as
to the financial statements and schedules contained therein as to
which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act;
(x) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under
the Act;
(xi) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance or sale of the Shares as
contemplated hereby other than (A) registration of the Shares
under the Act, (B) such consents, approvals, authorizations,
registrations or
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qualifications as may be required under the state securities or
blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters and (C) such approval of the
underwriting arrangements as may be required under the bylaws of
the NASD;
(xii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not conflict
with, or result in any breach of, or constitute a default under
(nor constitute any event which with notice, lapse of time or both
would constitute a breach of or default under), the charter or
bylaws of the Company or any of the Subsidiaries, or, to the best
of such counsel's knowledge, under any provision of any license,
indenture, lease, mortgage, deed of trust, bank loan or credit
agreement 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 their properties are bound or affected, or,
to the best of such counsel's knowledge, under any federal, state,
local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of the Subsidiaries;
(xiii) to the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in breach of or in default
under (nor has any event occurred which with notice, lapse of time
or both would constitute a breach of or default under) any
license, indenture, lease, mortgage, deed of trust, bank loan or
credit agreement or any 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 their properties are bound
or affected or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the
Subsidiaries, except for such matters as could not, individually
or in the aggregate, have a material adverse effect on the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries
taken as a whole;
(xiv) the Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits"), including without
limitation under any applicable Environmental Laws,
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as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in
the Prospectus; to the best of such counsel's knowledge, after due
inquiry, the Company and each of the Subsidiaries has fulfilled
and performed all of its material obligations with respect to such
permits and is in material compliance with the terms of such
permits, and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except
as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any
of the Subsidiaries;
(xv) to the best of such counsel's knowledge, all contracts
or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement have been so described or
filed;
(xvi) except as described in the Registration Statement and
the Prospectus, there are no actions, suits or proceedings of
which such counsel has knowledge pending or threatened against the
Company or any of the Subsidiaries, or any of their respective
properties, at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission,
board, body, authority or agency that individually or in the
aggregate could result in a judgment, decree or order having a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of
the Company and the Subsidiaries taken as a whole;
(xvii) to the best of such counsel's knowledge, each person
who has the right, contractual or otherwise, to cause the Company
to register pursuant to the Act any securities of the Company in
consequence of the issue and sale of the Shares to the
Underwriters hereunder either included such securities in the
Registration Statement or duly waived such right and each person
who has the right, contractual or otherwise, to cause the Company
to issue to it any securities of the Company in consequence of the
issue and sale of the Shares to the Underwriters hereunder has
duly waived such right;
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(xviii) the statements in the Registration Statement and the
Prospectus under the captions "Business -- Legal Proceedings",
"Management", "Description of Capital Stock" and "Shares Eligible
For Future Sale", insofar as they are descriptions of laws,
regulations and rules, of legal and governmental proceedings or of
contracts, agreements, leases and other legal documents, or refer
to statements of law or legal conclusions, have been reviewed by
such counsel and are accurate in all material respects;
(xix) neither the Company nor any of the Subsidiaries is an
"investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended;
(xx) the sales of securities by the Company described in Item
15 of the Registration Statement were exempt from the registration
requirements of the Act;
(xxi) nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement thereto at
the date of such Prospectus or such supplement, and at all times
up to and including the time of purchase contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express
no opinion with respect to the financial statements and schedules
included in the Registration Statement or Prospectus).
(b) Each Selling Stockholder shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be,
an opinion of legal counsel for such Selling Stockholder, addressed to
the Underwriters and dated the time of purchase or such additional time
of purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to Davis Polk &
Wardwell, counsel for the Underwriters, stating that:
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(i) this Agreement and the Custody Agreement and Power of
Attorney have been duly executed and delivered by such Selling
Stockholder; the Custody Agreement and Power of Attorney is legal,
valid and binding agreement of such Selling Stockholder
enforceable against such Selling Stockholder in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity;
(ii) such Selling Stockholder has full legal right and power,
and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue
sky laws of certain jurisdictions), to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder in the
manner provided in this Agreement;
(iii) delivery of certificates for the Shares to be sold by
such Selling Stockholder pursuant hereto will pass title thereto
to the Underwriters severally, free and clear of any claim, lien,
encumbrance, security interest, community property right,
restriction on transfer or other defect in title assuming that the
several Underwriters are good faith purchasers and without notice
of any adverse claim;
(iv) to the best of such counsel's knowledge, the
consummation of the transactions contemplated hereby and by the
Custody Agreement and Power of Attorney and the fulfillment of the
terms hereof and thereof will not constitute a breach or violation
of or default under any trust, indenture, agreement or other
instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound;
(v) the Attorney-in-Fact has been duly authorized by such
Selling Stockholder to execute and deliver on behalf of such
Selling Stockholder this Agreement and any other document
necessary or desirable in connection with the transactions
contemplated hereby and to deliver the Shares to be sold by such
Selling Stockholder and receive payment therefor pursuant hereto;
and
(vi) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission,
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board, body, authority or agency is required in connection with
the sale of the Shares to be sold by such Selling Stockholder as
contemplated hereby other than registration of the Shares under
the Act (except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky
laws of the various jurisdictions in which the Shares are being
offered by the Underwriters).
(c) You shall have received from Coopers & Lybrand L.L.P. letters
dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) [and the Selling Stockholders] in form and substance
satisfactory to the Managing Underwriters.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, opinions from Davis
Polk & Wardwell in form and substance satisfactory to you.
(e) No amendment or supplement to the Registration Statement or
the Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which you shall have objected in
writing.
(f) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement and, if
Rule 430A under the Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act at or before
5:00 P.M., New York City time, on the second full business day after
the date of this Agreement; provided, however, that the Company, the
Selling Stockholders and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least
50% of the Firm Shares from time to time may agree in writing or by
telephone, confirmed in writing, on a later date.
(g) Prior to the time of purchase or the additional time of
purchase, as the case may be: (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or
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supplements thereto, or modifications thereof, if any, shall 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.
(h) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be,
there has not been: (i) any material and adverse change, present or
prospective, in the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole, other than as described in the
Registration Statement and the Prospectus; (ii) any transaction that is
material to the Company and the Subsidiaries taken as a whole
contemplated or entered into by the Company or any of the Subsidiaries,
other than as described in the Registration Statement and the
Prospectus; or (iii) any obligation, contingent or otherwise, directly
or indirectly, incurred by the Company or any of the Subsidiaries that
is material to the Company and the Subsidiaries taken as a whole, other
than as described in the Registration Statement and the Prospectus, the
effect of which in any such case described in clause (i), (ii) or (iii)
in your judgment would 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 Prospectus.
(i) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two
of its executive officers to the effect that the representations and
warranties of the Company as set forth in this Agreement are true and
correct as of each such date and the conditions set forth in Section
8(f) and Section 8(g) have been met.
(j) You shall have received a signed letter, dated the date of
this Agreement, from each of the stockholders listed in Schedule C to
the effect that such persons shall not sell, contract to sell, grant
any option to sell, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 180 days from the date of the
Prospectus without the prior written consent of Dillon, Read & Co. Inc.
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(k) The Company shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement
in the Registration Statement or the Prospectus as of the time of
purchase and the additional time of purchase, as the case may be, as
you reasonably may request.
(l) The Company and the Selling Stockholders shall have performed
such of their respective obligations under this Agreement as are to be
performed by the terms hereof at or before the time of purchase and at
or before the additional time of purchase, as the case may be.
(m) The Shares shall have been approved for quotation through the
Nasdaq National Market.
(n) The Attorney-in-Fact, at the time of purchase or additional
time of purchase, as the case may be, shall have delivered to you a
certificate to the effect that the Attorney-in-Fact is not aware that
any of the representations and warranties of the Selling Stockholders
as set forth in this Agreement are not true and correct as of such
date.
9. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A under
the Act is not used, when you shall have received notification of the
effectiveness of the Registration Statement, or (ii) if Rule 430A under
the Act is used, when the parties hereto have executed and delivered
this Agreement.
(b) The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group
of Underwriters (which may include you) which has agreed to purchase in
the aggregate at least 50% of the Firm Shares if, at any time prior to
the time of purchase or, with respect to the purchase of any Additional
Shares, the additional time of purchase, as the case may be, trading in
securities on the Nasdaq National Market shall have been suspended or
minimum prices shall have been established on the Nasdaq National
Market or if a banking moratorium shall have been declared either by
the United States or New York State authorities, or if the United
States shall have declared war in accordance with its constitutional
processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity
or crisis of such magnitude in its effect on, or any material adverse
change in, any financial market which, in each case, in your judgment
or in the judgment of such group of Underwriters, makes it
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impracticable to market the Shares. If you or any group of Underwriters
elect to terminate this Agreement as provided in this Section 9(b), the
Company, each Selling Stockholder and each other Underwriter shall be
notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder and if the
number of Firm Shares which all Underwriters so defaulting shall have
agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take
up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1) the number
of Firm Shares agreed to be purchased by all such defaulting
Underwriters as hereinafter provided. Such Shares shall be taken up and
paid for by such non-defaulting Underwriter or Underwriters in such
amount or amounts as you may designate with the consent of each
Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting
Underwriters pro rata in proportion to the aggregate number of Firm
Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
(d) If any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder and if the
number of Firm Shares which all Underwriters so defaulting shall have
agreed but failed to take up and pay for exceeds 10% of the total
number of Firm Shares, and arrangements satisfactory to you and the
Company are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting
Underwriter.
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting
Underwriters that it will not sell any Firm Shares hereunder unless all
of the Firm Shares are purchased by the Underwriters (or by substituted
underwriters selected by you with the approval of the Company or
selected by the Company with your approval pursuant to Section 9(d)).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter or Underwriters in accordance with Section 9(d), the
Company or you shall have the right to postpone the time of purchase
for a period not exceeding five business days in order that any
necessary change in the Registration Statement and the Prospectus and
other documents may be effected. The term Underwriter as used in this
Agreement
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shall refer to and include any Underwriter substituted under this
Section 9 with like effect as if such substituted Underwriter had
originally been named in Schedule A.
(f) If the purchase of the Firm Shares by the Underwriters, as
contemplated by this Agreement, is not consummated for any reason
permitted under this Agreement or if such purchase is not consummated
because the Company shall be unable to comply with any of the terms of
this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in
Sections 5(l), 7 and 10), the Selling Stockholders shall not be under
any obligation or liability under this Agreement (except to the extent
provided in Section 10) and the Underwriters shall be under no
obligation or liability to the Company under this Agreement (except to
the extent provided in Section 10).
10. Indemnity by the Company, the Selling Stockholders and the
Underwriters.
(a) The Company and Fund II, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter and each Selling
Stockholder (other than Fund II), each person that controls any
Underwriter or any such Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and each
Underwriter's agent, employees, officers and directors and the agents,
employees, officers and directors of any such controlling person and
each of such Selling Stockholder's agents, employees, officers and
directors and the agents, employee,s officers and directors of any such
controlling person (collectively, the "Underwriter/Selling Stockholder
Indemnified Parties") from and against any and all losses, claims,
damages, judgments, liabilities and expenses (including the reasonable
fees and expenses of counsel and other expenses in connection with
investigating, defending or settling any such action or claim) which,
jointly or severally, any Underwriter/Selling Stockholder Indemnified
Party may incur as they are incurred (and regardless of whether such
Underwriter/Selling Stockholder Indemnified Party is a party to the
litigation, if any) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the
registration statement relating to the Shares or the Prospectus or any
Preliminary Prospectus, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except
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insofar as such losses, claims, damages, judgments, liabilities or
expenses arise out of, or are based upon, any such untrue statement or
omission or alleged untrue statement or omission based upon and in
conformity with information with respect to any Underwriter or any such
Selling Stockholder (other than Fund II) furnished in writing by any
Underwriter or any such Selling Stockholder (other than Fund II)
through you to the Company expressly for use therein with reference to
such Underwriter or such Selling Stockholder (other than Fund II);
provided, however, that as to any Preliminary Prospectus, the foregoing
indemnity shall not inure to the benefit of any Underwriter/Selling
Stockholder Indemnified Party with respect to any loss, claim, damage,
judgment, liability or expense arising from the sale of Shares to any
person by such Underwriter/Selling Stockholder Indemnified Party if
such Underwriter or Selling Stockholder (other than Fund II) failed to
send or give a copy of the Prospectus to such person within the time
required by the Act and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the
Prospectus. This indemnity agreement will be in addition to any
liability the Company or Fund II otherwise may have.
(b) Each Selling Stockholder severally and not jointly agrees to
indemnify, defend and hold harmless the Underwriter/Selling Stockholder
Indemnified Parties to the same extent as the foregoing indemnity from
the Company and Fund II to the Underwriter/Selling Stockholder
Indemnified Parties, but only with respect to information concerning
such Selling Stockholder furnished in writing by or on behalf of such
Selling Stockholder expressly for use with respect to such Selling
Stockholder in the Registration Statement, any Preliminary Prospectus
or the Prospectus. No Selling Stockholder shall be liable under this
Section 11 in an amount exceeding the net proceeds to such Selling
Stockholder from the sale of Shares sold by such Selling Stockholder
hereunder. This indemnity agreement will be in addition to any
liability each Selling Stockholder otherwise may have.
(c) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter/Selling Stockholder Indemnified Party, with
respect to which indemnity may be sought against the Company or a
Selling Stockholder pursuant to this Section 10, such
Underwriter/Selling Stockholder Indemnified Party shall promptly notify
the Company and each Selling Stockholder in writing, and the Company
and
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Fund II (in the case of an indemnification obligation under clause (a)
hereof) or the applicable Selling Stockholder (in the case of an
indemnification obligation under clause (b) hereof) shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Underwriter/Selling Stockholder Indemnified Party
and payment of all fees and expenses; provided that the omission so to
notify the Company and the Selling Stockholders shall not relieve them
from any liability that they may have to any Underwriter/Selling
Stockholder Indemnified Party, except to the extent that they have been
prejudiced in any material respect by such failure. An
Underwriter/Selling Stockholder Indemnified Party shall have the right
to employ separate counsel in any such action or proceeding and to
assume the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter/Selling Stockholder
Indemnified Party unless (i) the employment of such counsel has been
authorized in writing by the indemnifying party, (ii) the indemnifying
party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to the Underwriter/Selling Stockholder
Indemnified Party after notice of such action or proceeding has been
given to the indemnifying party or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both the
Underwriter/Selling Stockholder Indemnified Party and the indemnifying
party and such Underwriter/Selling Stockholder Indemnified Party shall
have reasonably concluded (upon advice of counsel) that there may be
one or more legal defenses available to it that are different from or
additional to those available to the indemnifying party such that a
conflict of interest exists or would exist in the absence of separate
counsel representing the indemnifying party and the Underwriter/Selling
Stockholder Indemnified Party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf
of such Underwriter/Selling Stockholder Indemnified Party), in any of
which events such reasonable fees and expenses shall be borne by the
indemnifying party and reimbursed as they are incurred. It is
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and
expenses of more than two separate firms of attorneys (in addition to
any local counsel) at any time for all such Underwriter/Selling
Stockholder Indemnified Parties, one of which firms shall be designated
in writing by Dillon, Read & Co. Inc. and one of which firms shall be
designated by The Marlborough Capital Investment Fund, L.P. and Mellon
Ventures, L.P.,
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and that all such fees and expenses shall be reimbursed as they are
incurred. No indemnifying party shall be liable for any settlement of
any such action effected without the written consent of such
indemnifying party (which consent shall not be unreasonably withheld or
delayed), but if settled with the written consent of such indemnifying
party, or if there is a final judgment with respect thereto, such
indemnifying party agrees to indemnify and hold harmless each
Underwriter/Selling Stockholder Indemnified Party from and against any
loss or liability by reason of such settlement or judgment.
(d) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement, any person that controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,
each Selling Stockholder and each person that controls such Selling
Stockholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act (collectively, the "Company/Selling Stockholder
Indemnified Parties") to the same extent as the foregoing indemnity
from the Company and Fund II to the Underwriter/Selling Stockholder
Indemnified Parties, but only with respect to information concerning
such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with respect
to such Underwriter in the Registration Statement, any Preliminary
Prospectus or the Prospectus. In case any action shall be brought
against any Company/Selling Stockholder Indemnified Party based on the
Registration Statement, any Preliminary Prospectus or the Prospectus
and in respect of which indemnity may be sought against any Underwriter
pursuant to this Section 10(c), such Underwriter shall have the rights
and duties given to the Company and the Selling Stockholders by Section
10(b) (except that if the Company and the Selling Stockholders shall
have assumed the defense thereof such Underwriter shall not be required
to do so, but may employ separate counsel therein and participate in
the defense thereof, provided that the fees and expenses of such
separate counsel shall be at the expense of such Underwriter), and the
Company/Selling Stockholder Indemnified Parties shall have the rights
and duties given to the Underwriter/Selling Stockholder Indemnified
Parties by Section 10(b).
(e) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless any Underwriter/Selling
Stockholder Indemnified Party or any Company/Selling Stockholder
Indemnified Party, then the party required to indemnify such
indemnified party under this Section 10, in lieu of
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indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, judgments, liabilities and expenses (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company, such Selling Stockholder 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, such
Selling Stockholder and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, such
Selling Stockholder and the Underwriters shall be deemed to be in the
same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and each of the Selling Stockholders,
respectively, bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault of the Company and
each of the Selling Stockholders and the Underwriters shall be
determined by reference to, among other things, whether the untrue
statement 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, by such Selling Stockholder or by
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
losses, claims, damages, judgments, liabilities and expenses referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any claim or action.
The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to
this Section 10(d) were determined by pro rata allocation or by any
other method of allocation (even if the Underwriters were treated as
one entity for such purpose) that does not take account of the
equitable considerations referred to in this Section 10(d).
Notwithstanding the provisions of this Section 10(d), no
Underwriter/Selling Stockholder Indemnified Party shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten or sold by such
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Underwriter/Selling Stockholder Indemnified Party and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter/Selling Stockholder Indemnified Party otherwise
has been required to pay by reason of such untrue statement 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 10 are several in
proportion to their respective underwriting commitments and are not
joint. The Selling Stockholders' obligations to contribute pursuant to
this Section 10 are several in proportion to their respective
obligations to sell Shares and are not joint.
The statements under the caption "Underwriting" in the Prospectus
(to the extent such statements relate to an Underwriter) constitute the
only information furnished to the Company in writing by such
Underwriter expressly for use in the Registration Statement, any
Preliminary Prospectus or the Prospectus.
(f) The indemnity and contribution agreements contained in this
Section 10 and the representations, warranties and covenants of the
Company and the Selling Stockholders contained in this Agreement shall
remain in full force and effect, regardless of any investigation made
by or on behalf of any Underwriter/Selling Stockholder Indemnified
Party or by or on behalf of any Company/Selling Stockholder Indemnified
Party or any Selling Stockholder, and shall survive any termination of
this Agreement or the issuance and delivery of the Shares. Subject to
the provisions of Section 10(b) and Section 10(c), the Company, each
Selling Stockholder and each Underwriter agree promptly to notify the
other of the commencement of any litigation or proceeding against it in
connection with the issuance and sale of the Shares or in connection
with the Registration Statement or the Prospectus.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
406 Mill Avenue SW, New Philadelphia, Ohio 44663, Attention: Chief Financial
Officer; and if to the Selling Stockholders, shall be sufficient in all
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respects, if delivered or sent to the Company at the above address.
12. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS
AGREEMENT.
13. Parties at Interest. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholders, the Underwriter/Selling Stockholder Indemnified Parties and the
Company/Selling Stockholder Indemnified Parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
14. Counterparts. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
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If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the Underwriters, please so indicate in
the space provided below for such purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholders and the Underwriters, severally.
Very truly yours,
GRADALL INDUSTRIES, INC.
By: __________________________
Name:
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE B ATTACHED HERETO
By: __________________________
Attorney-in-fact
Accepted and agreed to as of the date
first above written, on behalf of
themselves, McDonald & Company
Securities, Inc. and the other several
Underwriters named in Schedule A
DILLON, READ & CO. INC., as
Managing Underwriter
By: __________________________
Name:
Title:
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SCHEDULE A
Number of
Underwriter Firm Shares
Dillon, Read & Co. Inc.
McDonald & Company Securities, Inc.
[Others]
--------
Total ========
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SCHEDULE B
Name and wire-transfer Number of Firm Number of Additional
instructions Shares to be Sold Shares to be Sold
- --------------------------- --------------------- --------------------
MLGA Fund II, L.P. 550,706 386,514
Mellon Ventures, L.P. 220,154
The Marlborough Capital 229,140
Investment Fund, L.P.
Jack D. Rutherford 69,243
David T. Shelby 69,243
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SCHEDULE C
STOCKHOLDERS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
Barry L. Phillips
David S. Williams
James C. Cahill
Bruce A. Jonker
Joseph H. Keller
Ky Kuehling
Michael Haberman
Matthew Stear
John Arnold
Phillip Keller
The Nippon Credit Bank, Ltd.
Sangwoo Ahn
John A. Morgan
Perry J. Lewis
William C. Ughetta, Jr.
Ira Starr