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EXHIBIT 1.1
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HAWK CORPORATION
5,135,000 Shares
Class A Common Stock,
(Par Value $.01 Per Share)
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UNDERWRITING AGREEMENT
New York, New York
____________, 1998
SCHRODER & CO. INC.
LEHMAN BROTHERS INC.
McDONALD & COMPANY SECURITIES, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Schroder & Co. Inc.
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Dear Sirs:
Hawk Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of
3,500,000 shares of Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), and the persons named in Schedule II hereto (the "Selling
Stockholders"), propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 1,635,000 shares of Class A Common
Stock. The 5,135,000 shares of Class A Common Stock to be sold by the Company
and the Selling Stockholders are herein referred to as the "Firm Securities." In
addition, certain of the Selling Stockholders propose to grant to the
Underwriters an option to purchase up to an additional 770,250 shares of Class A
Common Stock (the "Option Securities"), on the terms and for the purposes set
forth in Section 2 hereof. The Firm Securities and the Option Securities are
herein collectively referred to as the "Securities." Except as may be expressly
set forth below, any reference to you in this Agreement shall be solely in your
capacity as the Representatives.
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1A. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-40535)
as amended by Amendment Nos. 1 through ___ thereto (the "Initial
Registration Statement"), and as a part thereof a preliminary
prospectus, in respect of the Securities, has been filed with the
Securities and Exchange Commission (the "Commission") in the form
heretofore delivered to you and, with the exception of exhibits to the
Initial Registration Statement, to you for each of the other
Underwriters; if the Initial Registration Statement has not become
effective, an amendment (the "Final Amendment") to the Initial
Registration Statement, including a form of final prospectus, necessary
to permit the Initial Registration Statement to become effective, will
promptly be filed by the Company with the Commission; if the Initial
Registration Statement has become effective and any post-effective
amendment to the Initial Registration Statement has been filed with the
Commission prior to the execution and delivery of this Agreement, which
amendment or amendments shall be in form acceptable to you, the most
recent such amendment has been declared effective by the Commission; if
the Initial Registration Statement has become effective, a final
prospectus (the "Rule 430A Prospectus") relating to the Securities
containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"),
will promptly be filed by the Company pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act and, if
applicable, a new registration statement increasing the size of the
offering pursuant to Rule 462(b) of the rules and regulations of the
Commission under the Act (the "Rule 462(b) Registration Statement")
will promptly be filed by the Company pursuant to Rules 462(b) and
232.13(a)(3) of the rules and regulations of the Commission under the
Act (any preliminary prospectus filed as part of the Initial
Registration Statement being herein called a "Preliminary Prospectus,"
the Initial Registration Statement as amended at the time that it
becomes or became effective, or, if applicable, as amended at the time
the most recent post-effective amendment to such registration statement
filed with the Commission prior to the execution and delivery of this
Agreement became effective (the "Effective Date"), including all
exhibits thereto and all information deemed to be a part thereof at
such time pursuant to Rule 430A of the rules and regulations of the
Commission under the Act, together with all parts of the Rule 462(b)
Registration Statement and all exhibits thereto, being herein called
the "Registration Statement," and the final prospectus relating to the
Securities in the form first filed pursuant to Rule 424(b) of the rules
and regulations of the Commission under the Act or, if no such filing
is required, the form of final prospectus included in the Registration
Statement, being herein called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made,
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not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein;
(c) On the Effective Date and the date the Prospectus is filed
with the Commission, and when any further amendment or supplements
thereto become effective or are filed with the Commission, as the case
may be, the Registration Statement, the Prospectus and such amendment
or supplements did and will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein;
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with all requisite power and authority (corporate and
other) to own its properties and to conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification (except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the business
affairs or prospects of the Company and its subsidiaries, taken as a
whole); and each of the Company's direct and indirect corporate
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with all requisite power and authority (corporate and
other) to own its properties and to conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification (except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the business
affairs or prospects of the Company and its subsidiaries, taken as a
whole); and references in this Agreement to subsidiaries of the Company
shall include direct and indirect corporate subsidiaries;
(e) All the issued shares of capital stock of each corporate
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned by the Company
free and clear of all liens, encumbrances, equities, security
interests, or claims; and there are no outstanding options, warrants or
other rights calling for the issuance of, and there are no commitments,
plans or arrangements to issue, any shares of capital stock of any
subsidiary or any security convertible or exchangeable or exercisable
for capital stock of any subsidiary; except for the shares of stock of
each corporate subsidiary owned by the Company or by a subsidiary of
the
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Company, neither the Company nor any subsidiary owns, directly or
indirectly, any shares of capital stock of any corporation or has any
equity interest in any firm, partnership, joint venture, association or
other entity;
(f) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement; the
execution and delivery of this Agreement and performance by the Company
of its obligations under this Agreement have been duly and validly
authorized by all requisite corporate action of the Company; and this
Agreement constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
(g) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, which loss or interference is material to the
Company and its subsidiaries, taken as a whole; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been, and prior to the Time
of Delivery (as defined in Section 4 hereof) there will not be, any
change in the capital stock (other than shares issued pursuant to the
terms of warrants or convertible securities of the Company that the
Prospectus indicates are outstanding on the date hereof) or short-term
debt or long-term debt of the Company or any of its subsidiaries, any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the, management, financial condition, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
(h) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described or
contemplated by the Prospectus, or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries or do not have a material adverse effect on the condition,
financial or otherwise, or the business affairs or prospects of the
Company and its subsidiaries taken as a whole, and any real property
and buildings held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and enforceable
leases of record with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such real
property and buildings by the Company and its subsidiaries or do not
have a material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the Company and its
subsidiaries taken as a whole;
(i) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement, and all the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-
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assessable, are free of any preemptive rights, rights of first refusal
or similar rights, were issued and sold in compliance with the
applicable Federal and state securities laws and conform in all
material respects to the description in the Prospectus; except as
described in the Prospectus, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible or exchangeable or
exercisable for capital stock of the Company; there are no holders of
securities of the Company who, by reason of the filing of the
Registration Statement have the right (and have not waived such right)
to request the Company to include in the Registration Statement
securities owned by them;
(j) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable, and will
conform in all material respects to the description thereof in the
Prospectus and will be listed on the New York Stock Exchange as of the
Effective Date;
(k) The execution and delivery of this Agreement, the
performance of the obligations of the Company under this Agreement, the
consummation of the transactions herein contemplated and the issue and
sale of the Securities and the compliance by the Company with all the
provisions of this Agreement do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge, claim, or encumbrance upon, any of the property or
assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor do or will any such actions result in any
violation of the provisions of the Certificate of Incorporation or the
By-laws, in each case as amended to the date hereof, of the Company or
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, filing, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation
of the other transactions contemplated by this Agreement, except the
registration under the Act of the Securities, and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws or by the
by-laws and rules of the National Association of Securities Dealers,
Inc. in connection with the purchase and distribution of the Securities
by the Underwriters;
(l) Except as included in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries or any of their respective officers or directors is a
party or of which any property of the Company or any of its
subsidiaries is the subject that could prevent consummation of the
transactions contemplated by this Agreement or that is required to be
disclosed in the Registration
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Statement or the Prospectus or any other such proceedings, other than
litigation or proceedings incident to the business conducted by the
Company and its subsidiaries that will not individually or in the
aggregate have a material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the Company and its
subsidiaries, taken as a whole; to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened or contemplated by others; and neither the
Company nor any of its subsidiaries is involved in any employee or
labor dispute, nor, to the Company's knowledge, is any employee or
labor dispute threatened;
(m) The Company and its subsidiaries have all material
licenses, permits and other approvals or authorizations of and from
governmental or regulatory authorities ("Permits") as are necessary
under applicable law to own or lease their respective properties and to
conduct their respective businesses in the manner now being conducted
and as described in the Prospectus; and the Company and its
subsidiaries have fulfilled and performed all of their respective
obligations with respect to such Permits, and no event has occurred
which allows, or after notice or lapse of time or both would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permits;
(n) Ernst & Young LLP and Coopers & Lybrand L.L.P., who have
certified certain financial statements and delivered their reports with
respect to audited consolidated financial statements and schedules
included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Act and the rules and
regulations of the Commission applicable to such financial statements;
(o) The consolidated financial statements and schedules
included in the Registration Statement and the Prospectus present
fairly the financial condition, the results of operations and the cash
flows of the entities shown as of the dates and for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
otherwise stated therein; the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus are accurately presented and, to the extent such information
and data are derived from the financial statements and books and
records of the Company and its subsidiaries, are prepared on a basis
consistent with such financial statements and the books and records of
the Company and its subsidiaries; the pro forma financial information
included in the Registration Statement and the Prospectus has been
properly compiled and complies in all material respects with the
applicable accounting requirements of Rule 11-01 and Rule 11-02 of
Regulation S-X of the Commission; and no other financial statements or
schedules are required to be included in the Registration Statement and
the Prospectus;
(p) There are no statutes or governmental regulations, or any
contracts or other documents that are required to be described in or
filed as exhibits to the Registration Statement which are not described
therein accurately in all material respects or filed as exhibits
thereto; and all such contracts to which the Company or any subsidiary
is a party
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have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the Company
or such subsidiary and are enforceable against the Company or
subsidiary in accordance with the terms thereof;
(q) The Company and its subsidiaries own or possess adequate
patent rights or licenses or other rights to use patent rights,
inventions, trademarks, service marks, trade names, copyrights,
technology and know-how necessary to conduct the general business now
or proposed to be operated by them as described in the Prospectus;
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trademarks, service
marks, trade names, copyrights, technology or know-how which, singly or
in the aggregate, could have a material adverse effect on the
condition, financial or otherwise, or the business affairs or prospects
of the Company and its subsidiaries taken as a whole; and, the
discoveries, inventions, products or processes of the Company and its
subsidiaries referred to in the Prospectus do not, to the Company's
knowledge, infringe or conflict with any patent or right of any third
party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company;
(r) Neither the Company nor any of its subsidiaries is in
violation of any term or provision of their respective Certificate of
Incorporation or By-laws (or similar corporate constituent documents),
in each case as amended to the date hereof, or any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of its subsidiaries, or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries where the consequences of such violation would have
a material adverse effect on the condition, financial or otherwise, or
the business affairs or prospects of the Company and its subsidiaries,
taken as a whole;
(s) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, bank loan or credit agreement,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or their respective
properties is bound or may be affected, where such default would have a
material adverse effect on the condition, financial or otherwise, or
the business affairs or prospects of the Company and its subsidiaries,
taken as a whole;
(t) The Company and its subsidiaries have timely filed all
necessary tax returns and notices and have paid all federal, state,
county, local and foreign taxes of any nature whatsoever for all tax
years through December 31, 1996, and have paid all federal, state,
county, local and foreign taxes for any later periods to the extent
such taxes have become due. The Company has no knowledge, or any
reasonable grounds to know, of any tax deficiencies which would have a
material adverse effect on the Company or any of its subsidiaries; the
Company and its subsidiaries have paid all taxes which have become due,
whether pursuant to any assessments or otherwise, and there is no
further liability (whether
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or not disclosed on such returns) or assessments for any such taxes,
and no interest or penalties accrued or accruing with respect thereto,
except as may be set forth or adequately reserved for in the financial
statements included in the Registration Statement; the amounts
currently set up as provisions for taxes or otherwise by the Company
and its subsidiaries on their books and records are sufficient for the
payment of all their unpaid federal, foreign, state, county and local
taxes accrued through the dates as of which they speak, and for which
the Company and its subsidiaries may be liable in their own right, or
as a transferee of the assets of, or as successor to any other
corporation, association, partnership, joint venture or other entity;
(u) The Company will not, during the period of 180 days after
the date of the Prospectus except pursuant to this Agreement, offer,
sell, contract to sell or otherwise dispose of any capital stock of the
Company (or securities convertible into, or exchangeable for, capital
stock of the Company), directly or indirectly, without the prior
written consent of Schroder & Co. Inc., except for grants or exercises
of stock options under the Company's stock option plan described in the
Prospectus as outstanding on the date thereof;
(v) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(w) Neither the Company nor any of its subsidiaries is in
violation of, nor has any of them received any outstanding notice of a
violation of, any foreign, federal, state, county or local law or
regulation relating to equal opportunity or discrimination in the
hiring, promotion or compensation or civil rights generally of
employees, or any applicable federal or state wages and hours laws, or
any provisions of the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated thereunder, or
antitrust or trade regulation matters, where such violation would have
a material adverse effect on the condition, financial or otherwise, or
the business affairs or prospects of the Company and its subsidiaries,
taken as a whole. The Company (A) is in compliance with any and all
applicable federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous
or toxic substances or waste, pollutants or contaminants
("Environmental Laws"), (B) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any
such permit, license or approval, except for such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals that would not, singularly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; there has been no storage, disposal,
generation,
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transportation, handling or treatment of hazardous substances or solid
wastes by the Company or any of its subsidiaries (or to the knowledge
of the Company, any of their respective predecessors in interest) at,
upon or from any of the property now or previously owned or leased by
the Company or any of its subsidiaries in violation of any applicable
law, ordinance, rule regulation, order, judgment, decree or permit or
which would require remedial action by the Company or any of its
subsidiaries under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not result in, or which would not be reasonably
likely to result in, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
Company and its subsidiaries, taken as a whole; there has been no
spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such
property of any solid wastes or hazardous substances due to or caused
by the Company or any of its subsidiaries except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not result in or would not be reasonably likely to result in,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a material
adverse effect on the Company and its subsidiaries, taken as a whole;
and the terms "hazardous substances" and "solid wastes" shall have the
meanings specified in any applicable local, state and federal laws or
regulations with respect to environmental protection;
(x) To the best of the Company's knowledge, none of the
Company or its subsidiaries, or its or their officers, directors,
employees or agents, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, or made any unlawful payment of funds of the
Company or any subsidiary or received or retained any funds in
violation of any law, rule or regulation;
(y) None of the Company or its subsidiaries, or its or their
officers, directors, employees or agents, have taken or will take,
directly or indirectly, any action designed to or which has constituted
or that might be reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company;
(z) Other than with respect to the Underwriters, the Company
has not incurred any liability for finder's or broker's fees or agent's
commission in connection with the execution, delivery or performance of
this Agreement, the offer and sale of the Securities or the transaction
contemplated hereby;
(aa) The Company has furnished you letters from each of the
executive officers, directors and employees of the Company listed on
Appendix A pursuant to which such persons have agreed that for a period
of 180 days after the date of the Prospectus, except pursuant to this
Agreement, such persons will not offer, sell, contract to sell, or
otherwise dispose of, any shares of capital stock of the Company (or
securities convertible into or exchangeable for, capital stock of the
Company), directly or indirectly, without the prior written consent of
Schroder & Co. Inc.;
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(bb) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended;
and
(cc) The Company and each of its 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 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 have a material adverse effect on the
condition, financial or otherwise, or the business affairs or prospects
of the Company and its subsidiaries, taken as a whole.
1B. Each Selling Stockholder, severally and not jointly, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) Such Selling Stockholder has, and at the Time of Delivery
(as defined in Section 4 hereof) will have, good and valid title to the
Securities to be sold by such Selling Stockholder hereunder, free and
clear of any liens, encumbrances, equities, security interests, claims
and other restrictions of any nature whatsoever, and such Selling
Stockholder has the full legal right, power and authority, and any
approval required by law, to enter into this Agreement and to sell,
assign, transfer and deliver the Securities being sold by it hereunder
and to make the representations, warranties, covenants and agreements
made by such Selling Stockholders in this Agreement; and upon the
delivery of and payment for such Securities as herein provided, the
several Underwriters will acquire good and valid title thereto, free
and clear of all liens, encumbrances, equities, security interests,
claims and other restrictions of any nature whatsoever;
(b) If such Selling Stockholder is a corporation, it has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its state of incorporation, is in good
standing under the laws of each other jurisdiction in which it is
required to be so qualified (except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of such Selling
Stockholder), and has all requisite power and authority (corporate and
other) to enter into this Agreement and an agreement and power of
attorney (with respect to such Selling Stockholder, the "Agreement and
Power-of-Attorney", in the form heretofore delivered to the
Representatives). The execution and delivery of this Agreement and the
Agreement and Power-of-Attorney, the performance of the obligations of
such Selling Stockholder hereunder and thereunder, the consummation of
the transactions herein and therein contemplated and the sale of the
Securities and the compliance by such Selling Stockholder with all the
provisions hereof and thereof, do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default
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under, or result in the creation or imposition of any lien, charge,
claim, or encumbrance upon, any of the property or assets of such
Selling Stockholder pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which it is bound or to which any
of its property or assets is subject, nor do or will any such actions
result in any violation of the provisions of the governing instruments,
in each case as amended to the date hereof, of such Selling Stockholder
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or any of its properties; and no consent, approval,
authorization, filing, order, registration or qualification of or with
any court or governmental agency or body is required for the issue and
sale of the Securities or the consummation of the other transactions
contemplated by this Agreement or the Agreement and Power-of-Attorney,
except the registration under the Act of the Securities, and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state or foreign securities or Blue Sky laws or
by the by-laws and rules of the National Association of Securities
Dealers, Inc. in connection with the purchase and distribution of the
Securities by the Underwriters;
(c) Such Selling Stockholder has duly executed and delivered
an Agreement and Power-of-Attorney appointing [INSERT NAME OF
ATTORNEY-IN-FACT] as such Selling Stockholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Stockholder and appointing [INSERT
NAME OF CUSTODIAN], as custodian thereunder (the "Custodian").
Certificates in negotiable form, endorsed in blank or accompanied by
blank stock powers duly executed, with signatures appropriately
guaranteed, representing the Securities to be sold by such Selling
Stockholder hereunder have been deposited with the Custodian pursuant
to the Agreement and Power-of-Attorney for the purpose of delivery
pursuant to this Agreement. Such Selling Stockholder has full power and
authority to enter into the Agreement and Power-of-Attorney and to
perform its obligations thereunder. If the Selling Stockholder is a
corporation, the execution and delivery of the Agreement and
Power-of-Attorney have been duly authorized by all necessary corporate
action of such Selling Stockholder. The Agreement and the
Power-of-Attorney have been duly executed and delivered by such Selling
Stockholder and, assuming due authorization, execution and delivery by
the Custodian, are the legal, valid, binding and enforceable
instruments of such Selling Stockholder. Such Selling Stockholder
agrees that each of the Securities represented by the certificates on
deposit with the Custodian is subject to the interests of the
Underwriters, the Company and the other Selling Stockholders hereunder,
that the arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement and to carry out
the terms of this Agreement are to that extent irrevocable and that the
obligations of such Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or the Agreement and
Power-of-Attorney, by any act of such Selling Stockholder, by operation
of law, or otherwise, whether in the case of any individual Selling
Stockholder by the death or incapacity of such Selling Stockholder, or
in the case of a corporate or partnership Selling Stockholder by its
liquidation or dissolution, or in the case of a trust by its revocation
or other termination or by the occurrence of any other event. If any
individual Selling
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Stockholder should die or become incapacitated, or if any corporate or
partnership Selling Stockholder shall liquidate or dissolve, or if any
instrument governing a Selling Stockholder that is a trust shall have
been revoked or any trustee shall have ceased to serve as such, or if
any other event should occur, before the delivery of such Securities
hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof;
(d) Such Selling Stockholder will not, during the period of
180 days after the date hereof, except pursuant to this Agreement,
offer, sell, contract to sell, or otherwise dispose of any capital
stock of the Company (or securities convertible into, or exchangeable
for, capital stock of the Company), directly or indirectly, without the
prior written consent of Schroder & Co. Inc.;
(e) Neither the execution and delivery or performance of this
Agreement or the Agreement and Power-of-Attorney or the consummation of
the transactions herein or therein contemplated nor the compliance with
the terms hereof or thereof by such Selling Stockholder will conflict
with, or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge, claim or encumbrance on any property
of the Company or any of its subsidiaries, under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder's property is bound, or the charter documents or by-laws of
such Selling Stockholder that is a corporation, the partnership
agreement of such Selling Stockholder that is a partnership, or the
instruments governing such Selling Stockholder that is a trust, or any
statute, ruling, judgment, decree, order, or regulation of any court or
other governmental authority or any arbitrator applicable to such
Selling Stockholder; and no consent, approval, authorization, order,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
or foreign securities or Blue Sky laws or by the by-laws and rules of
the National Association of Securities Dealers, Inc. and, if the
registration statement filed with respect to the Securities 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;
(f) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company;
(g) The sale by such Selling Stockholder of Securities
pursuant hereto is not prompted by any adverse information concerning
the Company that is not set forth in the Registration Statement or the
Prospectus;
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(h) Such Selling Stockholder has reviewed the Prospectus and
the Registration Statement, and the information regarding such Selling
Stockholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate;
(i) At the Time of Delivery, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold by such Selling
Stockholder to the several Underwriters hereunder will have been fully
paid or provided for by such Selling Stockholder and all laws imposing
such taxes will have been fully complied with;
(j) The Selling Stockholder has not distributed and, prior to
the last to occur of (i) the Time of Delivery, (ii) the Option
Securities Delivery Date (as defined in Section 4 hereof) or (iii)
completion of the distribution of the Securities, will not distribute
without your prior written consent any offering material directly or
indirectly in connection with the offering and sale of the Securities;
(k) Such Selling Stockholder does not have any knowledge or
any reason to believe that the Registration Statement or the Prospectus
(or any amendment or supplement thereto) contains any untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; and
(l) None of the Company, counsel to the Company, the
Underwriters, or counsel to the Underwriters, or any of them, has made
any representations or warranties or provided any information to such
Selling Stockholder with respect to the tax consequences of the sale of
the Securities.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of 3,500,000
Firm Securities, each Selling Stockholder agrees to sell to the several
Underwriters the number of Firm Securities set forth on Schedule II opposite the
name of such Selling Stockholder and each of the Underwriters agrees to purchase
from the Company and the Selling Stockholders, at a purchase price of
$__________ per share, the respective aggregate number of Firm Securities
determined in the manner set forth below. The obligation of each Underwriter to
the Company and each of the Selling Stockholders, respectively, shall be to
purchase that portion of the number of shares of Class A Common Stock to be sold
by the Company or such Selling Stockholder pursuant to this Agreement as the
number of Firm Securities set forth opposite the name of such Underwriter on
Schedule I bears to the total number of Firm Securities to be purchased by the
Underwriters pursuant to this Agreement, in each case adjusted by you such that
no Underwriter shall be obligated to purchase Firm Securities other than in 100
share amounts. In making this Agreement, each Underwriter is contracting
severally and not jointly.
In addition, subject to the terms and conditions herein set forth,
certain of the Selling Stockholders (as indicated on Schedule II) agree to issue
and sell to the Underwriters, as required (for the sole purpose of covering
over-allotments in the sale of the Firm Securities), up to 770,250
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Option Securities at the purchase price per share of the Firm Securities being
sold by the Company as stated in the preceding paragraph. The right to purchase
the Option Securities may be exercised by your giving 48 hours' prior written or
telephonic notice (subsequently confirmed in writing) to the Company of your
determination to purchase all or a portion of the Option Securities. Such notice
may be given at any time within a period of 30 days following the date of this
Agreement. Option Securities shall be purchased severally for the account of
each Underwriter in proportion to the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto. No Option Securities
shall be delivered to or for the accounts of the Underwriters unless the Firm
Securities shall be simultaneously delivered or shall theretofore have been
delivered as herein provided. The respective purchase obligations of each
Underwriter shall be adjusted by you so that no Underwriter shall be obligated
to purchase Option Securities other than in 100 share amounts. The Underwriters
may cancel any purchase of Option Securities at any time prior to the Option
Securities Delivery Date (as defined in Section 4 hereof) by giving written
notice of such cancellation to the Company.
3. The Underwriters propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company and the Selling Stockholders to you for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of immediately available funds to the
order of the Company, for the purchase price of the Firm Securities being sold
by the Company, and to the order of the respective Selling Stockholders for the
purchase price of the Firm Securities being sold by the Selling Stockholders, at
the office of Schroder & Co. Inc., Equitable Center, 787 Seventh Avenue, New
York, New York, at 9:30 A.M., New York City time, on ____________, 1998, or at
such other time, date and place as you and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery."
Certificates in definitive form for the Option Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price thereof by wire transfer of
immediately available funds to the order of the applicable Selling Stockholders,
for the purchase price of the Option Securities, in New York, New York, at such
time and on such date (not earlier than the Time of Delivery nor later than ten
business days after giving of the notice delivered by you to the Company with
reference thereto) and in such denominations and registered in such names as
shall be specified in the notice delivered by you to the Company with respect to
the purchase of such Option Securities. The date and time of such delivery and
payment are herein sometimes referred to as the "Option Securities Delivery
Date." The obligations of the Underwriters shall be subject, in their
discretion, (i) to the condition that there shall be delivered to the
Underwriters on the Option Securities Delivery Date opinions and certificates,
dated such Option Securities Delivery Date, referring to the Option Securities,
instead of the Firm Securities, but otherwise to the same effect as those
required to be delivered at the Time of Delivery pursuant to Section 7(d), 7(e),
7(f), 7(g) and 7(j) and (ii) to the condition that none of the events or
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actions described in Sections 7(h) or 7(i) shall have occurred between the date
hereof and the Option Securities Delivery Date.
Certificates for the Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to the
Time of Delivery and the Option Securities Delivery Date, respectively. Such
certificates will be made available for checking and packaging in New York, New
York, at least 24 hours prior to the Time of Delivery and Option Securities
Delivery Date.
In lieu of delivering certificates in definitive form for the
Securities to be delivered by the Company and the Selling Stockholders
hereunder, the Company and the Selling Stockholders may make electronic delivery
of such Securities through the facilities of The Depository Trust Company under
arrangements satisfactory to the Company and the Selling Stockholders, the
transfer agent for the Securities, and you.
5. (a) The Company covenants and agrees with each of the
Underwriters:
(i) If the Registration Statement has not become
effective, to file promptly the Final Amendment with the
Commission and use its best efforts to cause the Registration
Statement to become effective; if the Registration Statement
has become effective, to file promptly the Rule 430A
Prospectus with the Commission; to make no further amendment
or any supplement to the Registration Statement or Prospectus
which shall be disapproved by you after reasonable notice
thereof; to advise you, promptly after it receives notice
thereof of the time when the Registration Statement, or any
amendment thereto, or any amended Registration Statement has
become effective or any supplement to the Prospectus or any
amended Prospectus has been filed, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus
or for additional information; and in the event of the
issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain withdrawal of such order;
(ii) Promptly from time to time to take such action
as you may request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions (within
or without the United States of America) as you may request
and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
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(iii) To furnish each of the Representatives and
counsel for the Underwriters, without charge, signed copies of
the registration statement originally filed with respect to
the Securities and each amendment thereto (in each case
including all exhibits thereto) and to each other Underwriter,
without charge, a conformed copy of such registration
statement and each amendment thereto (in each case without
exhibits thereto) and, so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus, the Prospectus and all
amendments or supplements thereto as you may from time to time
reasonably request. If at any time when the delivery of a
prospectus is required under the Act an event shall have
occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make statements therein, in the light of the
circumstances under which they were made when such Prospectus
is delivered, not misleading, or if for any other reason it
shall be necessary to amend or supplement the Prospectus in
order to comply with the Act, the Company will forthwith
prepare and, subject to the provisions of Section 5(a)(i)
hereof, file with the Commission an appropriate supplement or
amendment thereto, and will furnish to each Underwriter and to
any dealer in securities, without charge, as many copies as
you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus;
(iv) To make generally available to its stockholders
as soon as practicable, but in any event not later than 45
days after the close of the period covered thereby, an
earnings statement in form complying with the provisions of
Section 11(a) of the Act covering a period of 12 consecutive
months beginning not later than the first day of the Company's
fiscal quarter next following the Effective Date;
(v) To file promptly all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act subsequent to the Effective Date and
during any period when the Prospectus is required to be
delivered;
(vi) For a period of five years from the Effective
Date, to furnish to its stockholders after the end of each
fiscal year an annual report (including consolidated balance
sheets and statements of operations, cash flow and
shareholders' equity of the Company and its subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters
of each fiscal year (beginning with the fiscal quarter ending
after the Effective Date), consolidated summary financial
information of the Company and its subsidiaries for such
quarter in reasonable detail;
(vii) During a period of five years from the
Effective Date, to furnish to you copies of all reports or
other communications (financial or other) furnished to
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its stockholders, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company
as you may from time to time reasonably request in connection
with your obligations hereunder;
(viii) To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus under the
caption "Use of Proceeds";
(ix) That it will not, and will cause its
subsidiaries, officers, directors, employees, agents and
affiliates not to, take, directly or indirectly, any action
designed to cause or result in, or that might reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Securities;
(x) That prior to the Time of Delivery there will not
be any change in the capital stock or material change in the
short-term debt or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial
condition, shareholders' equity or results of operations of
the Company or any of its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus;
(xi) That it will not, during the period of 180 days
after the date hereof (other than pursuant to this Agreement),
offer, sell, contract to sell or otherwise dispose of (or
register for sale under the Act) any capital stock of the
Company (or securities convertible into, or exchangeable for,
capital stock of the Company), directly or indirectly, without
the prior written consent of Schroder & Co. Inc., except for
grants or exercise of stock options under the Company's stock
option plans described in the Prospectus as outstanding on the
date thereof; and
(xii) That it will cause the Securities to be listed
on the New York Stock Exchange at all times from the Effective
Date until at least such time as you notify the Company that
the distribution of the Securities has been completed.
(b) Each Selling Stockholder, severally and not jointly,
covenants and agrees with each of the Underwriters that:
(i) Such Selling Stockholder will not, during the
period of 180 days after the date of the Prospectus, except
pursuant to this Agreement, offer, sell, contract to sell, or
otherwise dispose of any capital stock of the Company (or
securities convertible into, or exchangeable for, capital
stock of the Company), directly or indirectly, without the
prior written consent of Schroder & Co. Inc.;
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(ii) Such Selling Stockholder will not, directly or
indirectly, take any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Securities;
(iii) As soon as any Selling Stockholder is advised
thereof, such Selling Stockholder will advise the
Representatives and confirm such advice in writing, (i) of
receipt by the Selling Stockholder or by any representative or
agent of such Selling Stockholder, of any communication from
the Commission relating to the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any notice or
order of the Commission relating to the Company or any of the
Selling Stockholders in connection with the transactions
contemplated by this Agreement and (ii) of the happening of
any event which makes or may make any statement made in the
Registration Statement, the Prospectus or any Preliminary
Prospectus untrue or that requires the making of any change in
the Registration Statement, Prospectus or Preliminary
Prospectus, as the case may be, in order to make such
statement (with regard to the Prospectus or Preliminary
Prospectus, in light of the circumstances in which it was
made) not misleading; and
(iv) Such Selling Stockholder will deliver to the
Representatives prior to the Time of Delivery a properly
completed and executed United States Treasury Department Form
W-9 or Substitute Form W-9.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid: (i) the fees, disbursements and
expenses of counsel and accountants for the Company and the Selling
Stockholders, and all other expenses, in connection with the preparation,
printing and filing of the Registration Statement and the Prospectus and
amendments and supplements thereto and the furnishing of copies thereof,
including charges for mailing, air freight and delivery and counting and
packaging thereof and of any Preliminary Prospectus and related offering
documents to the Underwriters and dealers; (ii) the cost of printing this
Agreement, the Agreement Among Underwriters, the Selling Agreement,
communications with the Underwriters and selling group and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under securities laws as provided in Section 5(a)(ii) hereof,
including filing and registration fees and the fees, disbursements and expenses
for counsel for the Underwriters in connection with such qualification and in
connection with Blue Sky surveys or similar advice with respect to sales; (iv)
the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) all fees and expenses in connection with the listing of the
Securities on the New York Stock Exchange; (vi) all costs and expenses of the
Attorneys-in-Fact and the Custodian, and (vii) all other costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section 6, including the fees of the
Company's Transfer Agent and Registrar, the cost of any stock issue or transfer
taxes on sale of the Securities to the Underwriters, the cost of the Company's
personnel and other internal costs, the cost of printing and engraving the
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certificates representing the Securities and all expenses and transfer taxes
incident to the sale and delivery of the Securities to be sold by the Company
and the Selling Stockholders to the Underwriters hereunder. Each Selling
Stockholder will reimburse the Company for his pro rata portion of the
Commission registration fee and the National Association of Securities Dealers,
Inc. filing fee applicable to the Securities being sold by such Selling
Stockholder.
It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and the Selling Stockholders herein are, at and
as of the Time of Delivery, true and correct, the condition that the Company and
the Selling Stockholders shall have performed all its and their obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Registration Statement shall have become effective,
and you shall have received notice thereof not later than 10:00 P.M.,
New York City time, on the date of execution of this Agreement, or at
such other time as you and the Company may agree; if required, the
Prospectus shall have been filed with the Commission in the manner and
within the time period required by Rule 424(b); if you and the Company
have elected to rely upon Rule 430A, the price of the Securities and
any price related or other information previously omitted from the
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed time period, and on or prior to the Time of Delivery the
Company shall have provided evidence satisfactory to you of such timely
filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A; no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of
the Commission shall have been complied with to your reasonable
satisfaction;
(b) All corporate proceedings and related legal and other
matters in connection with the organization of the Company and the
registration, authorization, issue, sale and delivery of the Securities
shall have been reasonably satisfactory to Arter & Hadden LLP, counsel
to the Underwriters, and Arter & Hadden LLP shall have been timely
furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subsection;
(c) You shall not have advised the Company or any Selling
Stockholder that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
or omits to state a fact which in your judgment is in either case
material and in the case of an omission is required to be stated
therein or is necessary to
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make the statements therein (with regard to the Prospectus, in light of
the circumstances under which they were made) not misleading;
(d) Kohrman Jackson & Krantz P.L.L., as counsel to the Company
("Company Counsel"), shall have furnished to you and to Arter & Hadden
LLP their written opinion, dated the Time of Delivery, in form and
substance satisfactory to you and Arter & Hadden LLP, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, and is qualified to do business
and is in good standing in each jurisdiction in which its
ownership or leasing of properties requires such qualification
or the conduct of its business requires such qualification
(except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the business affairs or prospects of the Company
and its subsidiaries, taken as a whole); and the Company has
all necessary corporate power and all material governmental
authorizations, permits and approvals required to own, lease
and operate its properties and conduct its business as
described in the Prospectus;
(ii) Each of the Company's corporate subsidiaries has
been duly and validly incorporated and is validly existing as
a corporation in good standing under the laws of the
jurisdiction of its incorporation, and is qualified to do
business and is in good standing in each jurisdiction in which
its ownership or leasing of properties requires such
qualification or the conduct of its business requires such
qualification (except where the failure to so qualify would
not have a material adverse effect on the condition, financial
or otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole); and each such
corporate subsidiary has all necessary corporate power and all
material governmental authorizations, permits and approvals
required to own, lease and operate its properties and to
conduct its business as described in the Prospectus;
(iii) All the outstanding shares of capital stock of
each of the Company's corporate subsidiaries have been duly
authorized and are validly issued and outstanding, are fully
paid and non-assessable and are owned by the Company of record
and, to the best knowledge of such counsel, (A) beneficially
and (B) free and clear of all liens, encumbrances, equities,
security interests or claims of any nature whatsoever; and
neither the Company nor any of its subsidiaries has granted
any outstanding options, warrants or commitments with respect
to any shares of capital stock of such subsidiaries, whether
issued or unissued;
(iv) The Company has an authorized capitalization as
set forth in the Registration Statement and all the issued
shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and
non-assessable, are free of any preemptive rights, and were
issued and sold in compliance with all applicable securities
registration provisions of Federal and state
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securities laws; except as described in the Prospectus, to the
knowledge of such counsel, there are no outstanding options,
warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue, any
shares of capital stock of the Company; the Securities being
sold by the Company have been duly and validly authorized and,
when duly countersigned by the Company's Transfer Agent and
Registrar and issued, delivered and paid for in accordance
with the provisions of this Agreement, will be duly and
validly issued, fully paid and non-assessable; the Securities
conform to the description thereof in the Prospectus; the
Securities have been duly authorized for listing on the New
York Stock Exchange as of the Effective Date; and the
certificates to be delivered to the Underwriters hereunder are
in valid and sufficient form;
(v) To the best of such counsel's knowledge, except
as set forth in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries or any of their respective
officers or directors is a party or of which any property of
the Company or any of its subsidiaries is the subject which,
if resolved against the Company or any of its subsidiaries or
any of their respective officers or directors, individually,
or to the extent involving related claims or issues, in the
aggregate, is of a character required to be disclosed in the
Prospectus which has not been properly disclosed therein;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance
with its terms, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally
and except as enforceability of those provisions relating to
indemnity may be limited by the Federal securities laws and
principles of public policy;
(vii) The Company has full corporate power and
authority to execute, deliver and perform this Agreement, and
the execution, delivery and performance of this Agreement, the
consummation of the transactions herein contemplated and the
issue and sale of the Securities and the compliance by the
Company with all the provisions of this Agreement will not
conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, claim or
encumbrance upon, any of the property or assets of the Company
or any of its subsidiaries pursuant to, the terms of any
indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of
Incorporation or the By-laws, in each case as amended, of the
Company or the Certificate of Incorporation or By-laws, of any
of its subsidiaries, or any statute or any order, rule or
regulation known to such counsel of any court or governmental
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agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or any
regulatory authority or other governmental body is required
for the issue and sale of the Securities or the consummation
of the other transactions contemplated by this Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(ix) To the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is currently in
violation of its Certificate of Incorporation or By-laws, or
in default under, any indenture, mortgage, deed of trust,
lease, bank loan or credit agreement or any other agreement or
instrument of which such counsel has knowledge to which the
Company or any of its subsidiaries is a party or by which any
of them or any of their property may be bound or affected (in
any respect that is material in light of the condition,
financial or otherwise, or the business affairs or prospects
of the Company and its subsidiaries, taken as a whole);
(x) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Securities pursuant to the
Company's Certificate of Incorporation or By-laws, in each
case as amended to the date hereof, or any agreement or other
instrument known to such counsel; and no holders of securities
of the Company have rights to the registration thereof under
the Registration Statement or, if any such holders have such
rights, such holders have waived such rights;
(xi) All contracts and agreements summarized in the
Registration Statement and the Prospectus are fairly
summarized therein, conform in all material respects to the
descriptions thereof contained therein, and, to the extent
such contracts or agreements or any other material agreements
are required under the Act or the rules and regulations
thereunder to be filed as exhibits to the Registration
Statement, they are so filed; and such counsel does not know
of any contracts or other documents required to be summarized
or disclosed in the Prospectus or to be so filed as an exhibit
to the Registration Statement, which have not been so
summarized or disclosed, or so filed;
(xii) All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings are fair
summaries thereof and fairly present the information required
to be shown with respect to such matters;
(xiii) Nothing has come to such counsel's attention
to give such counsel reason to believe that any of the
representations and warranties of the Company
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contained in this Agreement or in any certificate or document
contemplated under this Agreement to be delivered are not true
or correct or that any of the covenants and agreements herein
contained to be performed on the part of the Company or any of
the conditions herein contained, or set forth in the
Registration Statement and the Prospectus, to be fulfilled or
complied with by the Company have not been or will not be duly
and timely performed, fulfilled or complied with; and
(xiv) The Registration Statement has become effective
under the Act, the Prospectus has been filed in accordance
with Rule 424(b) of the rules and regulations of the
Commission under the Act, including the applicable time
periods set forth therein, or such filing is not required and,
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act; the
Registration Statement, the Prospectus and each amendment or
supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act the rules and regulations thereunder
and the requirements of Form S-1; it being understood that
such counsel need express no opinion as to the financial
statements and schedules or other financial or statistical
data contained in the Registration Statement or the
Prospectus.
Such counsel shall also state that they have participated in the
preparation of the Registration Statement and the Prospectus as counsel to the
Company and during the preparation of the Registration Statement and the
Prospectus, they participated in conferences with representatives of the
independent public and internal accountants for, and other representatives of,
the Company and its subsidiaries, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, while they have not confirmed the accuracy or completeness of or otherwise
verified the information contained in the Registration Statement or the
Prospectus, based upon such preparation and conferences and a review of
documents deemed relevant for the purpose of rendering their opinion, nothing
has come to their attention that would lead them to believe that (i) the
Registration Statement, as of the time it became effective under the Act,
contained or contains as of the date of such opinion any untrue statement of a
material fact or omitted or omits as of the date of such opinion to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus and any amendments thereof or
supplements thereto (other than numerical, financial data, statistical data,
ratios, financial statements and notes thereto and related schedules therein, as
to which such counsel need express no belief), as of this date, contained or
contains as of the date of such opinion any untrue statement of material fact or
omitted or omits as of the date of such opinion to state any material fact
required to be stated therein or necessary to make the statement therein, in
light of the circumstances under which they were made, not misleading; provided,
however, such counsel need express no comment as to (i) the information in the
Prospectus under the caption "Underwriting," and (ii) the financial statements,
schedules and other numerical, financial, statistical data, or ratios contained
in the Registration Statement or the Prospectus.
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In rendering their opinions set forth in Section 7(d) above, such
counsel may rely, to the extent deemed advisable by such counsel, (a) as to
factual matters, upon certificates of public officials and officers of the
Company that have been provided to counsel for Underwriters, and (b) as to the
laws of any jurisdiction other than the United States and jurisdictions in which
they are admitted, on opinions of counsel (provided, however, that you shall
have received a copy of each of such opinions which shall be dated the Time of
Delivery, addressed to you or otherwise authorizing you to rely thereon, and
Company Counsel in its opinion to you delivered pursuant to this subsection,
shall state that such counsel are satisfactory to them and Company Counsel has
no reason to believe that the Underwriters and they are not justified to so
rely);
(e) With respect to each of the Selling Stockholders,
_______________, as counsel for the Selling Stockholders, shall have
furnished to you and to Arter & Hadden LLP their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you and to
Arter & Hadden to the effect that:
(i) each Selling Stockholder has full legal right,
power and authority to enter into this Agreement and the
Agreement and Power-of-Attorney and to sell, transfer and
deliver the Securities being sold by such Selling Stockholder
hereunder in the manner provided in this Agreement and to
perform its obligations under the Agreement and
Power-of-Attorney; the execution and delivery of this
Agreement, and the Agreement and Power-of-Attorney have been
duly authorized by all necessary corporate action of each
Selling Stockholder; this Agreement and the Agreement and
Power-of-Attorney have been duly executed and delivered by
each Selling Stockholder; this Agreement and the Agreement and
Power-of-Attorney are legal, valid and binding agreements of
each Selling Stockholder, enforceable in accordance with their
terms, except as enforcement of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding
in equity or at law);
(ii) upon delivery of and payment for the Securities
being sold by each Selling Stockholder, the several
Underwriters will receive good and valid title to such
Securities, free and clear of all liens, encumbrances,
equities, security interests, claims or other defects,
assuming at such time that the Underwriters acquire the
Securities in good faith without notice of any adverse claim
(within the meaning of the Uniform Commercial Code provisions
that govern the Selling Stockholders' sale of the Securities
to the Underwriters);
(iii) the sale of the Securities to the Underwriters
by the Selling Stockholders pursuant to this Agreement, the
compliance by the Selling Stockholders with the other
provisions of this Agreement and the Agreement and
Power-of-Attorney and the consummation of the other
transactions herein contemplated do not and will not (i)
conflict with, or result in a breach or violation of any of
the terms and provisions of, or constitute a default under, or
result in the
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creation or imposition of any lien, charge, claim or
encumbrance on any property of any Selling Stockholder under,
any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which any Selling Stockholder is a
party or by which any Selling Stockholder or any of the
Selling Stockholders' property is bound or the charter
documents or by-laws of any corporation that is a Selling
Stockholder, the partnership agreement of any Selling
Stockholder that is a partnership or any instrument governing
a trust that is a Selling Stockholder or any statute or any
judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to
any Selling Stockholder, or (ii) require the consent,
approval, authorization, order, registration or qualification
of or with any governmental authority, except such as have
been obtained and such as may be required under state or
foreign securities or Blue Sky laws or the by-laws and rules
of the National Association of Securities Dealers, Inc.; and
(iv) there are no transfer or other taxes (other than
income taxes) known to such counsel payable in connection with
the sale and delivery of the Securities by the Selling
Stockholders to the several Underwriters or all such taxes
have been fully paid in connection with such sale and
delivery.
In rendering such opinion, such counsel may rely, to the extent deemed
advisable by such counsel, as to factual matters, upon certificates of public
officials and the Selling Stockholders that have been provided to counsel to the
Underwriters.
(f) Arter & Hadden LLP, counsel to the Underwriters, shall
have furnished to you their written opinion or opinions, dated the Time
of Delivery, in form and substance satisfactory to you, with respect to
the incorporation of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(g) At the effective time of this Agreement and also at the
Time of Delivery, Ernst & Young LLP shall have furnished to you a
letter or letters, dated as of the effective time of this Agreement and
the Time of Delivery (as applicable), in form and substance
satisfactory to you in your sole discretion, which letters shall
include, but not be limited to, determinations based on those specified
procedures set forth or described in Ernst & Young LLP's draft comfort
letter dated __________, 1998, which specified procedures shall be
performed to and including a date within three days of the date of the
applicable letter.
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree; and since the respective dates as of which
information is given in the Prospectus, there shall not have been any
change in the capital stock (except for grants or exercises of stock
options under the Company's stock option plan described in the
Prospectus as
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outstanding on the date thereof) or short-term debt or long-term debt
of the Company or any of its subsidiaries nor any change or any
development involving a prospective change, in or affecting the general
affairs, management, financial condition, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
(i) Between the date hereof and the Time of Delivery there
shall have been no declaration of war by the Government of the United
States; at the Time of Delivery there shall not have occurred any
material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
other calamity or crisis, the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the resale of Securities and no
event shall have occurred resulting in (i) trading in securities
generally on the New York Stock Exchange or in the Class A Common Stock
on the New York Stock Exchange being suspended or limited or minimum or
maximum prices being generally established on such exchange, or (ii)
additional material restrictions, not in force on the date of this
Agreement, being imposed upon trading in securities generally (or the
Class A Common Stock specifically) by the New York Stock Exchange or by
order of the Commission or any court or other governmental authority,
or (iii) a general banking moratorium being declared by either Federal
or New York authorities;
(j) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at the Time of Delivery
certificates signed by the chief executive officer and the chief
financial officer, on behalf of the Company, and by each Selling
Stockholder satisfactory to you as to such matters as you may
reasonably request and as to (i) the accuracy of its and their
respective representations and warranties herein at and as of the Time
of Delivery and (ii) the performance by the Company and each Selling
Stockholder of all their respective obligations hereunder to be
performed at or prior to the Time of Delivery; the Company and the
Selling Stockholders shall have furnished or caused to be furnished to
you at the Time of Delivery certificates signed by the chief executive
officer and the chief financial officer, on behalf of the Company, and
by each Selling Stockholder as to (i) the fact that they have carefully
examined the Registration Statement and Prospectus and, (a) as of the
Effective Date, the statements contained in the Registration Statement
and the Prospectus were true and correct and neither the Registration
Statement nor the Prospectus omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading (except that each Selling Stockholder shall be responsible
only for information relating to it or required to be disclosed by it)
and (b) since the Effective Date, no event has occurred that is
required by the Act or the rules and regulations of the Commission
thereunder to be set forth in an amendment of, or a supplement to, the
Prospectus that has not been set forth in such an amendment or
supplement; and (ii) the matters set forth in subsection (a) of this
Section 7;
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(k) Each director, executive officer and employee of the
Company listed on Appendix A and each Selling Stockholder shall have
delivered to you an agreement not to offer, sell, contract to sell or
otherwise dispose of any shares of capital stock of the Company (or
securities convertible into, or exchangeable for, capital stock of the
Company), directly or indirectly, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Schroder &
Co. Inc.;
(l) The Company shall have delivered to you evidence that the
Securities have been authorized for listing on the New York Stock
Exchange as of the Effective Date; and
(m) The Company shall have delivered to you written evidence
that the documents or matters set forth on Appendix B hereto have been
delivered, satisfied or fulfilled, as the case may be, in each case in
a manner satisfactory to you and Arter & Hadden LLP.
8. (a) The Company will indemnify, defend and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or in any Blue Sky application or other document executed by
the Company specifically for that purpose or based upon information furnished by
the Company filed in any state or other jurisdiction in order to qualify any or
all of the Securities under the securities laws thereof or filed with the
Commission or any securities association or securities exchange (each, an
"Application"), or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, or (ii) any untrue statement or alleged untrue statement
made by the Company in Section 1A of this Agreement, or (iii) the employment by
the Company of any device, scheme or artifice to defraud, or the engaging by the
Company in any act, practice or course of business which operates or would
operate as a fraud or deceit, or any conspiracy with respect thereto, in which
the Company shall participate, in connection with the issuance and sale of any
of the Securities, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; PROVIDED, HOWEVER, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission relating to an
Underwriter made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein, PROVIDED, FURTHER, that the
indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
persons controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented
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or amended, to such person, within the time required by the Act and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure is the result of noncompliance by the Company
with Section 5(a)(iii) hereof.
(b) Each Selling Stockholder, severally and not jointly, will
indemnify, defend and hold harmless each Underwriter, the Company and the other
Selling Stockholders against any losses, claims, damages or liabilities to which
such Underwriter, the Company or such other Selling Stockholders may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, the Registration Statement, or the Prospectus, or
any amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements made therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Preliminary Prospectus, the
Registration Statement, the Prospectus or such amendment or supplement in
reliance upon and in conformity with information furnished to such Underwriter
or the Company by such Selling Stockholder in writing expressly for use therein,
or (ii) any untrue statement or alleged untrue statement made by such Selling
Stockholder in Section 1B of this Agreement, and will reimburse such
Underwriter, the Company or such other Selling Stockholders for any legal or
other expenses incurred by such Underwriter, the Company or such other Selling
Stockholders in connection with investigating, preparing to defend, defending or
appearing as a third-party witness in connection with any such action or claim;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section 8(b)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any persons controlling such Underwriter) on account of any
losses, claims, damages, liabilities or litigation arising from the sale of
Securities to any person, if such Underwriter fails to send or give a copy of
the Prospectus, as the same may be then supplemented or amended, to such person
within the time required by the Act and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure is
the result of noncompliance by the Company with Section 5(a)(iii) hereof;
PROVIDED, FURTHER, no Selling Stockholder against whom a claim for indemnity is
made on the basis of the provisions of this Section 8(b) shall be required to
indemnify, hold harmless or reimburse the Company or Underwriters in an
aggregate amount in excess of the proceeds received by the Selling Stockholder
in connection herewith.
(c) In addition to any obligations of the Company and each of
the Selling Stockholders under Section 8(a) and 8(b), the Company and each of
the Selling Stockholders agree that they shall perform their indemnification
obligations under Section 8(a) and Section 8(b) with respect to counsel fees and
expenses and other expenses reasonably incurred by making payments within 45
days to the Underwriter in the amount of the statements of the Underwriter's
counsel or other statements which shall be forwarded by the Underwriter, and
that it shall make such payments notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments
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might later be held to have been improper by a court until such time as a court
orders return of such payments.
The indemnity agreement in Section 8(a) and Section 8(b) shall be in
addition to any liability which the Company or any of the Selling Stockholders
may otherwise have and shall extend upon the same terms and conditions to each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act.
(d) Each Underwriter will indemnify and hold harmless the
Company and the Selling Stockholders against any losses, claims, damages or
liabilities to which the Company or such Selling Stockholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or any Application, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement or any Application in reliance upon and in
conformity with written information furnished to the Company or such Selling
Stockholder by such Underwriter relating to such Underwriter through you
expressly for use therein, and will reimburse the Company or such Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim.
The indemnity agreement in this Section 8(d) shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or of any Selling Stockholder and to each person, if any, who controls
the Company or any Selling Stockholder within the meaning of the Act or the
Exchange Act.
(e) Promptly after receipt by an indemnified party under
Section 8(a), 8(b) or 8(d) of notice of the commencement of any action
(including any governmental investigation), such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party under Section
8(a), 8(b) or 8(d) except to the extent it was unaware of such action and has
been prejudiced in any material respect by such failure or from any liability
which it may have to any indemnified party otherwise than under such Section
8(a), 8(b) or 8(d). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party
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under such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If, however, (i) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party or (ii) an indemnified party shall have reasonably
concluded that representation of such indemnified party and the indemnifying
party by the same counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between them
and the indemnified party so notifies the indemnifying party, then the
indemnified party shall be entitled to employ counsel different from counsel for
the indemnifying party at the expense of the indemnifying party and the
indemnifying party shall not have the right to assume the defense of such
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to local counsel) for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same set of
allegations or circumstances. The counsel with respect to which fees and
expenses shall be so reimbursed shall be designated in writing by Schroder & Co.
Inc. in the case of parties indemnified pursuant to Section 8(a) and Section
8(b) and by the Company in the case of parties indemnified pursuant to Section
8(d). If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c), the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(f) In order to provide for just and equitable contribution
under the Act in any case in which (i) any Underwriter (or any person who
controls any Underwriter within the meaning of the Act or the Exchange Act)
makes claim for indemnification pursuant to Section 8(a) or Section 8(b) hereof,
but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that Section 8(a) or Section 8(b)
provides for indemnification in such case or (ii) contribution under the Act may
be required on the part of any Underwriter or any such controlling person in
circumstances for which indemnification is provided under Section 8(d), then,
and in each such case, each indemnifying party shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject as an
indemnifying party hereunder (after contribution from others) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 8(e) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but
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also the relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Securities purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 8(f) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(f). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
8(f) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(f), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 8(f) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(g) Promptly after receipt by any party to this Agreement of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against another
party (the "contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the contributing party will
not relieve it from any liability which it may have to any other party for
contribution under the Act except to the extent it was unaware of such action
and has been prejudiced in any material respect by such failure or from any
liability which it may have to any other party other than for contribution under
the Act. In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party of the commencement thereof,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or
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another party or other parties to purchase such Firm Securities on the terms
contained herein. If the aggregate number of Firm Securities as to which
Underwriters default is more than one-eleventh of the aggregate number of all
the Firm Securities and within 36 hours after such default by any Underwriter
you do not arrange for the purchase of such Firm Securities, then the Company
and the Selling Stockholders shall be entitled to a further period of 36 hours
within which to procure another party or other parties satisfactory to you to
purchase such Firm Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Selling
Stockholders that you have so arranged for the purchase of such Firm Securities,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Firm Securities, you or the Company shall have
the right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Firm Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Securities of such defaulting Underwriter or Underwriters
by you or the Company and the Selling Stockholders or both as provided in
subsection (a) above, the aggregate number of such Firm Securities which remain
unpurchased does not exceed one-eleventh of the aggregate number of all the Firm
Securities, then the Company and the Selling Stockholders shall have the right
to require each non-defaulting Underwriter to purchase the number of the Firm
Securities which such Underwriter agreed to purchase hereunder and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share (based
on the number of Firm Securities which such Underwriter agreed to purchase
hereunder) of the Firm Securities of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities of a defaulting Underwriter or Underwriters by
you or the Company and the Selling Stockholders as provided in subsection (a)
above, the aggregate number of such Firm Securities which remain unpurchased
exceeds one-eleventh of the aggregate number of all the Firm Securities, or if
the Company and the Selling Stockholders shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase Firm
Securities of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate without liability on the part of any non-defaulting
Underwriter, the Company or any Selling Stockholder, except for the expenses to
be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity agreement in Section 8 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, each of the Selling Stockholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the
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results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or an officer or director or
controlling person of the Company, or any of the Selling Stockholders, or any
controlling person of any of the Selling Stockholders, and shall survive
delivery of and payment for the Securities.
11. This Agreement shall become effective (a) if the Registration
Statement has not heretofore become effective, at the earlier of 12:00 Noon, New
York City time, on the first full business day after the Registration Statement
becomes effective, or at such time after the Registration Statement becomes
effective as you may authorize the sale of the Securities to the public by
Underwriters or other securities dealers, or (b) if the Registration Statement
has heretofore become effective, at the earlier of 24 hours after the filing of
the Prospectus with the Commission or at such time as you may authorize the sale
of the Securities to the public by Underwriters or securities dealers, unless,
prior to any such time you shall have received notice from the Company that it
elects that this Agreement shall not become effective, or you, or through you
such of the Underwriters as have agreed to purchase in the aggregate fifty
percent or more of the Firm Securities hereunder, shall have given notice to the
Company that you or such Underwriters elect that this Agreement shall not become
effective; provided, however, that the provisions of this Section and Section 6
and Section 8 hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 hereof, or
if this Agreement, by election of you or the Underwriters, shall not become
effective pursuant to the provisions of this Section, the Company and the
Selling Stockholders shall not then be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof, but if this Agreement
becomes effective and is not so terminated but the Securities are not delivered
by or on behalf of the Company or any of the Selling Stockholders as provided
herein because the Company or any of the Selling Stockholders has been unable
for any reason beyond its control and not due to any default by it to comply
with the terms and conditions hereof, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company and the Selling Stockholders shall then be under no
further liability to any Underwriter except as provided in Section 6 and Section
8 hereof.
12. The statements set forth in the last paragraph on the front cover
page of the Prospectus, the paragraph on the inside front cover of the
Prospectus containing stabilization language and the _________ paragraphs under
the caption "Underwriting" in the Prospectus constitute the only information
furnished by any Underwriter through the Representatives to the Company for
purposes of Sections 1A(b), 1A(c) and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Schroder & Co. Inc. on behalf of you as the
Representatives, and in all dealings with the Selling Stockholders hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement
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furnished in writing by or on behalf of such Selling Stockholder or made or
given by the Attorney-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, shall be in writing and, if to the
Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
you as the Representatives in care of Schroder & Co. Inc., Equitable Center, 787
Seventh Avenue, New York, New York 10019, Attention: Syndicate Department; and
if to the Company or the Selling Stockholders, shall be delivered or sent by
letter sent by mail, telex or facsimile transmission (subsequently confirmed by
delivery or by letter sent by mail) to the address of the Company set forth in
the Registration Statement, Attention: Chief Executive Officer; PROVIDED,
HOWEVER, that any notice to any Underwriter pursuant to Section 8(d) hereof
shall be delivered or sent by mail, telex or facsimile transmission
(subsequently confirmed by delivery or by letter sent by mail) to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and each of the Selling Stockholders
and, to the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and each person who controls the Company, any Selling
Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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16. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement Among Underwriters, manually or facsimile
executed counterparts of which, to the extent practicable and upon request,
shall be submitted to the Company for examination, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
HAWK CORPORATION
By:
------------------------------------
Name:
Title:
SELLING STOCKHOLDERS
By:
------------------------------------
As Attorney-in-Fact for each of the
Selling Stockholders listed in
Schedule II
Accepted as of the date hereof:
SCHRODER & CO. INC.
LEHMAN BROTHERS INC.
McDONALD & COMPANY SECURITIES, INC.
as Representatives of the several Underwriters
By: SCHRODER & CO. INC.
By:
----------------------------------
Managing Director
[320163]
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SCHEDULE I
NUMBER OF FIRM
UNDERWRITER SECURITIES
- ----------- ----------
Schroder & Co. Inc........................................ ________
Lehman Brothers Inc....................................... ________
McDonald & Company Securities, Inc........................ ________
Total .................................................... 5,135,000
=========
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SCHEDULE II
MAXIMUM NUMBER
NUMBER OF FIRM OF OPTION
SELLING STOCKHOLDER SECURITIES TO BE SOLD SECURITIES TO BE SOLD
- ------------------- --------------------- ---------------------
Total .............................. 1,635,000 770,250
========= =======
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APPENDIX A
Directors, Executive Officers and Employees of the Company
Who are to Execute Lock-up Letter Agreements
--------------------------------------------
Norman C. Harbert
Ronald E. Weinberg
Jeffrey H. Berlin
Douglas D. Wilson
Thomas A. Gilbride
Jess F. Helsel
Timothy J. Houghton
Paul R. Bishop
Byron S. Krantz
Dan T. Moore, III
William J. O'Neill, Jr.
Gary Siciliano
[INSERT OTHER EMPLOYEES]
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APPENDIX B
[INSERT ANY OTHER CLOSING DOCUMENTS OR MATTERS]
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