$100,000,000
PARK ELECTROCHEMICAL CORP.
5 1/2% Convertible Subordinated Notes due 2006
UNDERWRITING AGREEMENT
February 22, 1996
LEHMAN BROTHERS INC.
NEEDHAM & COMPANY, INC.
ROBERTSON, STEPHENS & COMPANY LLC,
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Park Electrochemical Corp., a New York corporation (the
"Company"), proposes to sell $100,000,000 principal amount of 5 1/2%
Convertible Subordinated Notes due 2006 (the "Firm Notes"). In addition, the
Company proposes to grant to the Underwriters (as defined below) an option to
purchase up to an additional $15,000,000 principal amount of 5 1/2%
Convertible Subordinated Notes due 2006 on the terms and for the purposes set
forth in Section 2 (the "Option Notes"). The Firm Notes and the Option Notes,
if purchased, are hereinafter collectively called the "Notes." The Notes are
convertible into shares of common stock, par value $.10 per share (the "Common
Stock"), of the Company, upon the terms and subject to the conditions and
adjustments set forth in the Indenture (as defined below), at a conversion
price of $42.188 per share. The Notes are to be issued pursuant to an
Indenture (the "Indenture"), dated as of February 1, 1996, between the Company
and The Chase Manhattan Bank, N.A., as trustee (the "Trustee"), the form of
which has been filed as an exhibit to the Registration Statements (as defined
below). This is to confirm the agreement concerning the purchase of the Notes
from the Company by the Underwriters named in Schedule 1 hereto (the
"Underwriters").
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, and amendments
thereto, with respect to the Notes have (i) been prepared by the
Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed
with the Commission under the Securities Act and (iii) become
effective under the Securities Act; a second registration
statement on Form S-3 with respect to the Notes (i) may also be
prepared by the Company in conformity with the requirements of the
Securities Act and the Rules and Regulations and (ii) if to be so
prepared, will be filed with the Commission on the date hereof
under the Securities Act pursuant to Rule 462(b) of the Rules and
Regulations; and the Indenture has been qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act"). Copies of the
first such registration statement and the amendments to such
registration statement, together with the form of any such second
registration statement, have been delivered by the Company to you
as the representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means
(i) with respect to the first such registration statement, the
date and the time as of which such registration statement, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission and (ii) with respect to any second
registration statement, the date and time as of which such second
registration statement is filed with the Commission, and
"Effective Times" is the collective reference to both Effective
Times; "Effective Date" means (i) with respect to the first such
registration statement, the date of the Effective Time of such
registration statement and (ii) with respect to any second
registration statement, the date of the Effective Time of such
second registration statement, and "Effective Dates" is the
collective reference to both Effective Dates; "Preliminary
Prospectus" means each prospectus included in any such
registration statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with
the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as
amended at its Effective Time, "Rule 462(b) Registration
Statement" means the second registration statement, if any,
referred to in this Section 1(a), when filed with the Commission,
and "Registration Statements" means both the Primary Registration
Statement and any Rule 462(b) Registration Statement, including in
each case any documents incorporated by reference therein at such
time and all information contained in the final prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations in accordance with Section 5(a) hereof and deemed to
be a part of the Registration Statements as of the Effective Time
of the Primary Registration Statement pursuant to paragraph (b) of
Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus, as first filed with the Commission pursuant
to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Reference made herein to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment
to either of the Registration Statements shall be deemed to
include any annual report of the Company filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
Effective Time that is incorporated by reference in the
Registration Statements. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the
Rule 462(b) Registration Statement, if any, the Prospectus and any
further amendments or supplements to the Registration Statements
or the Prospectus, when they become effective or are filed with
the Commission, as the case may be, will conform) in all material
respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable
Effective Date (as to the Registration Statements and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation
or warranty is made as to information contained in or omitted from
the Registration Statements or the Prospectus in reliance upon and
in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein; and the Indenture conforms in
all material respects to the requirements of the Trust Indenture
Act and the applicable rules and regulations thereunder.
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and none of such
documents, when they became effective or were filed with the
Commission, as the case may be, contained any untrue statement of
a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective
or are filed with Commission, as the case may be, will conform in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder and will
not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 15) have been duly incorporated and are validly existing
as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification except where the failure to be so qualified is
not reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations or business of the Company and its subsidiaries, and
have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they
are engaged; and none of the subsidiaries of the Company (other
than New England Laminates Co., Inc., Nelco Products, Inc., Nelco
Technology Inc., Neltec, Inc., Nelco Products Pte, Ltd. and Nelco
International Corporation (collectively, the "Significant
Subsidiaries")) is a "significant subsidiary", as such term is
defined in Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, subject to Section 630
of the New York Business Corporation Law (the "BCL"), and conform
to the description thereof contained in the Prospectus; and all of
the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are
fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(f) The Indenture has been duly authorized and, when duly
executed by the proper officers of the Company (assuming due
execution and delivery by the Trustee) and delivered by the
Company, will have been duly executed and delivered by the Company
and will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing;
and the Notes have been duly authorized, and, when duly executed,
authenticated, issued and delivered as provided in the Indenture,
will be duly and validly issued and outstanding, and will
constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable in accordance
with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.
(g) All of the shares of Common Stock issuable upon
conversion of the Notes have been duly and validly authorized and
reserved for issuance upon such conversion and, when issued and
delivered in accordance with the terms of the Indenture, will be
duly and validly issued, fully paid and non-assessable, subject to
Section 630 of the BCL; and the Indenture, the Notes and the
Common Stock issuable upon conversion of the Notes will conform in
all material respects to the descriptions thereof contained in the
Prospectus; there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Common Stock issuable upon
conversion of the Notes pursuant to the Company's charter or by-
laws or any agreement or other instrument.
(h) The execution, delivery and performance of this
Agreement and the Indenture by the Company, the consummation of
the transactions contemplated hereby and thereby and the issuance
and delivery of the Notes and the Common Stock issuable upon
conversion of the Notes will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, 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
properties or assets of the Company or any of its subsidiaries is
subject other than such breaches, violations or defaults which,
singularly or in the aggregate, would not reasonably be likely to
have a material adverse effect on the transactions contemplated by
this Agreement or on the trading price of the Common Stock, nor
will such actions result in any violation of the provisions of the
charter or by-laws 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 or assets;
and except for the registration of the Notes and the Common Stock
issuable upon conversion of the Notes under the Securities Act,
the qualification of the Indenture under the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Notes by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement or
the Indenture by the Company and the consummation of the
transactions contemplated hereby and thereby and the issuance of
the Common Stock issuable upon conversion of the Notes.
(i) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statements or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
(j) Except as described in the Prospectus, the Company has
not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee
benefit plans, stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, any material 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, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there has
not been any material change in the capital stock 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 or
management of the Company or the consolidated financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus.
(l) The financial statements (including the related notes
and supporting schedules) filed as part of the Registration
Statements or included or incorporated by reference in the
Prospectus present fairly the financial condition and results of
operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods involved.
(m) To the best knowledge of the Company, Ernst & Young
LLP, who have certified certain financial statements of the
Company, whose reports appear in the Prospectus or are
incorporated by reference therein and who have delivered the
initial letter referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the Rules
and Regulations; and, to the best knowledge of the Company,
Deloitte & Touche LLP and Arthur Andersen LLP, whose respective
reports appear in the Prospectus and are incorporated by reference
therein and who have each delivered the initial letter referred to
in Section 7(g) hereof, were independent accountants as required
by the Securities Act and the Rules and Regulations during the
periods covered by the respective financial statements on which
they reported as set forth in their respective reports contained
and incorporated in the Prospectus and as of the date of such
reports.
(n) The Company and each of 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 in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and all real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(o) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for
companies engaged in similar businesses in similar industries.
(p) Each of the Company and its subsidiaries owns or
possesses adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights and licenses
described in the Prospectus as being owned or used by it or which
are necessary for the conduct of its business and has no reason to
believe that the conduct of its business will conflict with, and
has not received any notice of any claim of conflict with, any
such rights of others which claims, singularly or in the
aggregate, if subject to an unfavorable decision, ruling or
finding, are reasonably likely to have a material adverse effect
on the consolidated financial position, stockholders' equity,
results of operations or business of the Company and its
subsidiaries.
(q) Except for environmental proceedings referred to under
the caption "Business--Environmental Matters" in the Prospectus,
there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any
property or asset of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of
its subsidiaries, are reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the
Company and its subsidiaries; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(r) The conditions for use of Form S-3, as set forth in
General Instruction I thereto, have been satisfied.
(s) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to
either of the Registration Statements by the Securities Act or by
the Rules and Regulations which have not been described in the
Prospectus or filed as exhibits to either of the Registration
Statements or incorporated therein by reference as permitted by
the Rules and Regulations.
(t) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other
hand, which is required to be described in the Prospectus which is
not so described.
(u) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which
might be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries.
(v) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect
to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan"
or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such
qualification.
(w) The Company has filed all federal, state and local
income and franchise tax returns required to be filed through the
date hereof and has paid all taxes shown by such returns to be
due, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries,
might have) a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
(x) The Company (i) maintains and keeps accurate books and
records and (ii) maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements in
accordance with generally accepted accounting principles and to
maintain accountability for its assets, (C) access to its assets
is permitted only in accordance with management's general or
specific authorization and (D) the reported accountability for
its assets is compared with existing assets at reasonable
intervals.
(y) Neither the Company nor any of its subsidiaries (i) is
in violation of its charter or by-laws, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or
assets is subject or (iii) is in violation in any respect of any
law, ordinance, governmental rule, regulation or court decree to
which it or its properties or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the
ownership of its properties or assets or to the conduct of its
business, other than such defaults, violations or failures
described in clauses (ii) or (iii) above which, singularly or in
the aggregate, are not reasonably likely to have a material
adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the
Company and its subsidiaries.
(z) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its subsidiaries (or, to the
knowledge of the Company, any of their predecessors in interest)
at, upon or from any of the properties now or previously owned or
leased by the Company or its subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations
of the Company and its subsidiaries; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes,
solid wastes, hazardous wastes or hazardous substances due to or
caused by the Company or any of its subsidiaries or with respect
to which the Company or any of its subsidiaries have knowledge,
except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the
consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and the terms
"hazardous wastes", "toxic wastes", "hazardous substances" and
"medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations
with respect to environmental protection.
(aa) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder.
2. Purchase of the Notes by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell $100,000,000
principal amount of the Firm Notes to the several Underwriters, and each of
the Underwriters, severally and not jointly, agrees to purchase the principal
amount of the Firm Notes set opposite that Underwriter's name in Schedule 1
hereto.
In addition, the Company grants to the Underwriters an option to
purchase up to $15,000,000 principal amount of Option Notes. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Notes and is exercisable as provided in Section 4 hereof. Option Notes shall
be purchased severally for the account of the Underwriters in proportion to
the principal amount of Firm Notes set opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Notes shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Notes other than in
multiples of $1,000.
The price of both the Firm Notes and any Option Notes shall be
equal to 97.25% of the principal amount thereof, plus accrued interest, if
any, from February 28, 1996 to the applicable Delivery Date.
The Company shall not be obligated to deliver any of the Notes to
be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the
Notes to be purchased on such Delivery Date as provided herein.
3. Offering of Notes by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Notes, the several Underwriters
propose to offer the Firm Notes for sale upon the terms and conditions set
forth in the Prospectus; provided, however, that no Notes registered pursuant
to the Rule 462(b) Registration Statement, if any, shall be offered prior to
the Effective Time thereof.
4. Delivery of and Payment for the Notes. Delivery of and
payment for the Firm Notes shall be made at the offices of Simpson Thacher &
Bartlett at 425 Lexington Avenue, New York, New York 10017, at 10:00 A.M., New
York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Company shall deliver or cause to be delivered the Firm Notes to the
Representatives for the account of each Underwriter through the facilities of
The Depository Trust Company against payment to or upon the order of the
Company of the purchase price by certified or official bank check or checks
payable in immediately available (same-day) funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set
forth the aggregate principal amount of Option Notes as to which the option is
being exercised, the names in which the Option Notes are to be registered, the
denominations in which the Option Notes are to be issued and the date and
time, as determined by the Representatives, when the Option Notes are to be
delivered; provided, however, that this date and time shall not be earlier
than the First Delivery Date nor earlier than the second business day after
the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been
exercised. The date and time the Option Notes are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Notes shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver
or cause to be delivered the Option Notes to the Representatives for the
account of each Underwriter through the facilities of The Depository Trust
Company against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in immediately
available (same-day) funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file
such Rule 462(b) Registration Statement with the Commission on the
date hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than 10:00 A.M., New
York City time, the day following the execution and delivery of
this Agreement; to make no further amendment or any supplement to
the Registration Statements or to the Prospectus prior to the
Second Delivery Date except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to either Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Notes; to advise the Representatives, promptly after it
receives notice thereof, 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 Notes 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 Statements or the
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 its withdrawal;
(b) To furnish promptly to each of the Representatives and
to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission,
and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives in New York
City such number of the following documents as the Representatives
shall request: (i) conformed copies of the Registration
Statements as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement, the Indenture, the computation of the ratio of earnings
to fixed charges and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus (not later than 10:00
A.M., New York City time, of the day following the execution and
delivery of this Agreement) and any amended or supplemented
Prospectus (not later than 10:00 A.M., New York City time, on the
day following the date of such amendment or supplement) and (iii)
any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a prospectus
is required at any time after the Effective Time of the Primary
Registration Statement in connection with the offering or sale of
the Notes (or any other securities relating thereto) and if at
such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representatives and, upon
their request, to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities
as many copies as the Representatives may from time to time
request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to
the Registration Statements or the Prospectus or any supplement to
the Prospectus that may, in the reasonable judgment of the Company
or the Representatives, be required by the Securities Act or
requested by the Commission;
(e) Prior to filing with the Commission (i) any amendment
to either of the Registration Statements, any supplement to the
Prospectus or any document incorporated by reference in the
Prospectus or (ii) any Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement, to make generally available to the
Company's security holders and to deliver to the Representatives
an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) For a period of three years following the Effective
Date of the Primary Registration Statement, to furnish to the
Representatives copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be
listed pursuant to requirements of or agreements with such
exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Notes and
the Common Stock issuable upon conversion of the Notes for
offering and sale under the securities laws of such jurisdictions
as the Representatives 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 of the Notes; 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 or to subject itself to taxation in any
jurisdiction in which it is not currently subject to taxation;
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, offer for sale, sell
or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the
disposition or purchase by any person at any time in the future
of) any (i) debt securities of the Company with maturities longer
than one year (other than the Notes as contemplated by this
Agreement) or (ii) shares of Common Stock (other than shares
offered or issued pursuant to employee benefit plans, stock option
plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or
rights and other than in connection with the offer for sale, or
the conversion, of the Notes), or sell or grant options, rights or
warrants with respect to any such debt securities or shares of
Common Stock (other than the grant of options pursuant to option
plans existing on the date hereof and other than in connection
with the offer for sale, or the conversion, of the Notes), without
the prior written consent of Lehman Brothers Inc.; and to cause
each officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance reasonably satisfactory to counsel
for the Underwriters, pursuant to which each such person shall
agree not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the
disposition or purchase by any person at any time in the future
of) any such debt securities or, except as described therein,
shares of Common Stock for a period of 90 days from the date of
the Prospectus, without the prior written consent of Lehman
Brothers Inc.;
(j) To reserve and continue to reserve a sufficient number
of shares of Common Stock for issuance upon conversion of the
Notes;
(k) To complete the listing of the Notes on the New York
Stock Exchange, Inc. ("NYSE"), subject only to official notice of
issuance and evidence of satisfactory distribution prior to the
First Delivery Date;
(l) To complete the listing of the Common Stock issuable
upon conversion of the Notes on the NYSE, subject to official
notice of issuance of the Notes; and
(m) To apply the net proceeds from the sale of the Notes
being sold by the Company as set forth in the Prospectus.
6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Notes and any taxes
payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statements
and any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statements as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided
in this Agreement; (d) the costs of reproducing and distributing this
Agreement; (e) the costs of distributing the terms of agreement relating to
the organization of the underwriting syndicate and selling group to the
members thereof by mail, telex or other means of communication; (f) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Notes; (g) any applicable
listing or other fees; (h) the fees and expenses of qualifying the Notes under
the securities laws of the several jurisdictions as provided in Section 5(h)
and of preparing, printing and distributing a Blue Sky Memorandum (including
related fees and expenses of counsel to the Underwriters); (i) any fees
charged by securities rating services for rating the Notes; (j) the acceptance
fees of the Trustee and, unless otherwise agreed with the Trustee, the fees
and expenses of counsel to the Trustee; and (k) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 6 and in Section
11, the Underwriters shall pay their own costs and expenses, including the
costs and expenses of their counsel, any transfer taxes on the Notes which
they may sell and the expenses of advertising any offering of the Notes made
by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the
effectiveness of either of the Registration Statements or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information
in either of the Registration Statements or the Prospectus or
otherwise shall have been complied with or withdrawn.
(b) No Underwriter shall have discovered and disclosed to
the Company on or prior to such Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or
supplement thereto contains any untrue statement of a fact which,
in the opinion of Simpson Thacher & Bartlett, counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Notes, the Indenture, the Common Stock issuable
upon conversion of the Notes, the Registration Statements and the
Prospectus, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Brian W. Pusch, Esq. shall have furnished to the
Representatives his written opinion, as special counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company and each of its Significant
Subsidiaries have been duly incorporated and are validly
existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign
corporations in each jurisdiction specified in such opinion,
and have all power and authority necessary to own or hold
their respective properties and conduct the businesses in
which they are engaged;
(ii) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming due
execution and delivery by the Trustee, constitutes a valid
and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing;
(iii) The Notes have been duly authorized,
executed and delivered by the Company and, assuming due
authentication thereof by the Trustee and upon payment and
delivery in accordance with this Agreement, will be duly and
validly issued and outstanding and will constitute valid and
binding obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with their
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing;
(iv) The Company has an authorized
capitalization as set forth in the Prospectus, and all of
the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable (subject to Section 630 of the BCL) and
conform to the description thereof contained in the
Prospectus; all of the shares of Common Stock issuable upon
conversion of the Notes have been duly and validly
authorized and reserved for issuance upon such conversion
and, when issued and delivered in accordance with the terms
of the Indenture, will be duly and validly issued, fully
paid and non-assessable (subject to Section 630 of the BCL);
and all of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and
validly authorized and issued and are fully paid, non-
assessable (except as otherwise provided by applicable law)
and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(v) The Indenture and the Notes conform to the
description thereof contained in the Prospectus;
(vi) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Common Stock
issuable upon conversion of the Notes pursuant to the
Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(vii) To the best of such counsel's knowledge
and other than as referred to under the caption "Business--
Environmental Matters" in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property
or asset of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any
of its subsidiaries, are reasonably likely to have a
material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(viii) The Primary Registration Statement was
declared effective under the Securities Act and the
Indenture was qualified under the Trust Indenture Act as of
the date and time specified in such opinion, the Rule 462(b)
Registration Statement, if any, was filed with the
Commission on the date specified therein, the Prospectus was
filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein and, to the knowledge
of such counsel, no stop order suspending the effectiveness
of either of the Registration Statements has been issued and
no proceeding for that purpose is pending or threatened by
the Commission;
(ix) The Registration Statements, as of their
respective Effective Dates, and the Prospectus, as of its
date, and any further amendments or supplements thereto, as
of their respective dates, made by the Company prior to such
Delivery Date (other than the financial statements and other
financial and statistical data contained therein, as to
which such counsel need express no opinion) complied as to
form in all material respects with the requirements of the
Securities Act and the Rules and Regulations; the documents
incorporated by reference in the Prospectus and any further
amendment or supplement to any such incorporated document
made by the Company prior to such Delivery Date (other than
the financial statements and related schedules and other
financial and statistical data contained therein, as to
which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and the Indenture
conforms in all material respects to the requirements of the
Trust Indenture Act and the applicable rules and regulations
thereunder;
(x) To the best of such counsel's knowledge, there
are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statements by the Securities Act or by the
Rules and Regulations which have not been described or filed
as exhibits to the Registration Statements or incorporated
therein by reference as permitted by the Rules and
Regulations;
(xi) This Agreement has been duly authorized,
executed and delivered by the Company;
(xii) The issue and sale of the Notes being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby and the
issuance and delivery of the Common Stock issuable upon
conversion of the Notes will not conflict with or result in
a breach or violation of any of the terms or provisions of,
or constitute a default under, any material 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 properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their
properties or assets; and, except for the registration of
the Notes and the Common Stock issuable upon conversion of
the Notes under the Securities Act, such consents,
approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and
distribution of the Notes by the Underwriters (in the case
of such state securities laws, as to which such counsel need
express no opinion) and the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement or the Indenture by the Company and the
consummation of the transactions contemplated hereby and
thereby and the issuance of the Common Stock issuable upon
conversion of the Notes; and
(xiii) To the best of such counsel's knowledge,
there are no contracts, agreements or understandings between
the Company and any person granting such person the right to
require the Company to file a registration statement under
the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require
the Company to include such securities in the securities
registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act.
In rendering such opinion, such counsel may state that his opinion
is limited to matters governed by the Federal laws of the United
States of America and the laws of the State of New York. Such
counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company on a regular basis with respect to
corporate and securities law matters (although the Company is also
represented by its General Counsel and, with respect to certain
other matters, by other outside counsel) and has acted as counsel
to the Company in connection with the preparation of the
Registration Statements, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead him to
believe that (I) the Registration Statements (other than the
financial statements and other financial and statistical data
contained therein, as to which such counsel need make no such
written statement), as of their respective Effective Dates,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that
the Prospectus (other than the financial statements and other
financial and statistical data contained therein, as to which such
counsel need make no such written statement) contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading or (II) any document incorporated by
reference in the Prospectus or any further amendment or supplement
to any such incorporated document made by the Company prior to
such Delivery Date (other than the financial statements and other
financial and statistical data contained therein, as to which such
counsel need make no such written statement), when they became
effective or were filed with the Commission, as the case may be,
contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that, except as set forth
in paragraphs (iv) and (v) above, such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the
Prospectus.
(e) White & Case, special tax counsel to the Company, shall
have furnished to the Representatives their written opinion,
addressed to the Underwriters and dated the Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to
the effect that: the statements contained in the Prospectus under
the caption "Certain Federal Income Tax Considerations", insofar
as they describe U.S. federal statutes, rules and regulations, are
accurate in all material respects.
(f) With respect to the letter of Ernst & Young LLP
delivered to the Representatives concurrently with the execution
of this Agreement (as used in this paragraph, the "initial
letter"), the Company shall have furnished to the Representatives
a letter (as used in this paragraph, the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(g) With respect to the letter of each of Deloitte & Touche
LLP and Arthur Andersen LLP delivered to the Representatives
concurrently with the execution of this Agreement (each, as used
in this paragraph, the "initial letter"), the Company shall have
furnished to the Representatives a letter (as used in this
paragraph, the "bring-down letter") of each such accountants,
addressed to the Underwriters and dated the Delivery Date (i)
confirming that such accountants were independent public
accountants within the meaning of the Securities Act and were in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission during the periods covered by the respective
financial statements on which they reported as set forth in their
respective reports contained and incorporated in the Prospectus
and as of the date of such reports and (ii) confirming in all
material respects the conclusions and findings set forth in such
accountants' initial letter.
(h) The Company shall have furnished to the Representatives
a certificate, dated such Delivery Date, of its Chairman of the
Board or an Executive Vice President and its chief financial
officer stating that:
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the condition set forth in
Section 7(a) has been fulfilled;
(ii) Neither the Company nor any of its
subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus any material 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, otherwise than as set forth or contemplated
in the Prospectus and since such date there has not been any
material adverse change in the capital stock 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 or management of the Company or the
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the
Prospectus; and
(iii) They have carefully examined the
Registration Statements and the Prospectus and, in their
opinion (A) the Registration Statements, as of their
respective Effective Dates, and the Prospectus, as of each
of the Effective Dates, did not include any untrue statement
of a material fact and did not omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the
Effective Date of the Primary Registration Statement no
event has occurred which is required to have been set forth
in a supplement or amendment to either of the Registration
Statements or the Prospectus which has not been set forth in
such a supplement or amendment.
(i) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited
financial statements included or incorporated by reference 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, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall
not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs or management of the Company or the consolidated
financial position, stockholders' 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 described in clause (i) or (ii), is, in the reasonable
judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the NYSE or the American Stock
Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-
counter market, shall have been suspended or minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of a majority
in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Notes being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities.
(l) The NYSE shall have approved the Notes for listing,
subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company and Nelco International Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Company (the "Principal
Subsidiary"), jointly and severally, shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which that Underwriter,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, or (B) in any blue sky application or other
document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of
qualifying any or all of the Notes or the Common Stock issuable upon
conversion of the Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, either of the Registration Statements or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each
Underwriter and each such officer, employee and controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company and the Principal Subsidiary shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application in reliance upon and in conformity
with the written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein as described in Section 8(e). The foregoing indemnity agreement is in
addition to any liability which the Company or the Principal Subsidiary may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii)
the omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any amendment
or supplement thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Company
through the Representatives by or on behalf of that Underwriter specifically
for inclusion therein as described in Section 8(e), and shall reimburse the
Company and any such director, officer or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent it
has been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Representatives
shall have the right to employ counsel to represent jointly the
Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the Underwriters
against the Company or the Principal Subsidiary under this Section 8 if, in
the reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company and
the Principal Subsidiary. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 8(a) and 8(b), shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its prior written consent
(which consent shall not be unreasonably withheld), but if settled with its
prior written consent or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes purchased
under this Agreement (before deducting expenses) received by the Company on
the one hand, and the total underwriting discounts and commissions received by
the Underwriters with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the
Notes 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 whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Principal
Subsidiary and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 8(d) were to be 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 into account
the equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), 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(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Notes underwritten by it and distributed to the public was offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Notes set forth on the cover page of,
and under the caption "Underwriting" in, the Prospectus are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the Registration
Statements and the Prospectus.
9. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Notes which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the
principal amount of Firm Notes set opposite the name of each remaining non-
defaulting Underwriter in Schedule 1 hereto bears to the total principal
amount of Firm Notes set opposite the names of all the remaining non-
defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any
of the Notes on such Delivery Date if the total principal amount of Notes
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceeds 9.09% of the total principal amount of Notes to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the principal amount of
Notes which it agreed to purchase on such Delivery Date pursuant to the terms
of Section 2. If the foregoing maximums are exceeded, the remaining non-
defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Notes to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Notes) shall terminate
without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1
hereto who, pursuant to this Section 9, purchases Firm Notes which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the Notes of a
defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the First Delivery Date for up to seven full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by
the Company prior to delivery of and payment for the Firm Notes if, prior to
that time, any of the events described in Sections 7(i), 7(j) or 7(k) shall
have occurred or if the Underwriters shall decline to purchase the Notes for
any reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Notes for delivery to the Underwriters for any reason
permitted under this Agreement, or (b) the Underwriters shall decline to
purchase the Notes for any reason permitted under this Agreement (including
the termination of this Agreement pursuant to Section 10), the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been incurred
by them in connection with this Agreement and the proposed purchase of the
Notes, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those
expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers Inc.,
Three World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 212-528-8822);
(b) if to the Company or the Principal Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Primary Registration
Statement, Attention: Chief Financial Officer (Fax: 516-354-
4128);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company
shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Lehman Brothers Inc.
on behalf of the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Company and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the indemnities and agreements of the Company
contained in Section 8(a) of this Agreement shall also be deemed to be for the
benefit of the officers and employees of each Underwriter and the person or
persons, if any, who control each Underwriter within the meaning of Section 15
of the Securities Act and (B) the indemnity agreement of the Underwriters
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors, officers and employees of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 13, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Principal Subsidiary and the
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person
controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
NYSE is open for trading and (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations.
16. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the
Company, the Principal Subsidiary and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
PARK ELECTROCHEMICAL CORP.
By
Title:
NELCO INTERNATIONAL CORPORATION
By
Title:
Accepted:
LEHMAN BROTHERS INC.
NEEDHAM & COMPANY, INC.
ROBERTSON, STEPHENS & COMPANY LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By
Authorized Representative
SCHEDULE 1
Principal Amount of Firm Notes
Underwriters
Lehman Brothers Inc.
Needham & Company, Inc.
Robertson, Stephens & Company LLC
__________
Total $100,000,000