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Exhibit 1.1
6,670,000 Shares
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION
(a Delaware corporation)
Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
__________________, 1998
XxXXXXXX & COMPANY SECURITIES, INC.
WHEAT FIRST UNION
as Representatives of the Several Underwriters
c/x XxXxxxxx & Company Securities, Inc.
0000 XxXxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Each of AMERICAN ARCHITECTURAL PRODUCTS CORPORATION, a
Delaware corporation (the "Company"), AAP HOLDINGS, INC., a __________________
corporation ("AAPH"), XXXXX X. XXXXXX, individually ("Amedia"), and [more
Selling Stockholders to come, if any] (collectively with AAPH and Amedia, the
"Selling Stockholders") confirms its agreement with XxXxxxxx & Company
Securities, Inc. ("McDonald"), Wheat First Union, a division of Wheat First
Securities, Inc. ("Wheat"), and each of the other underwriters named in Schedule
I hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
McDonald and Wheat are acting as representatives (in such capacity, McDonald and
Wheat shall hereinafter be referred to as the "Representatives"), with respect
to the sale by the Company of an aggregate of 6,670,000 shares of common stock,
par value $.01 per share (the "Common Stock"), of the Company, and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of shares of Common Stock set forth in said Schedule I, aggregating 6,670,000
shares of Common Stock, and with respect to the grant by the Company and the
Selling Stockholders of the option described in Section 2(b) hereof to purchase
from the Company and the Selling Stockholders, in the respective amounts set
forth in Schedule II hereto, all or any part of 1,000,000 shares of Common
Stock, solely to cover over-allotments, in each case except as may otherwise be
provided in the Pricing Agreement, as hereinafter defined. As used
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herein, where appropriate, the term "Company" shall also refer to predecessors
of the Company as described in the Registration Statement. Of the 1,000,000
shares of Common Stock which the Underwriters may purchase solely to cover
over-allotments, ______________ are being sold by the Company and
_______________ are being sold by the Selling Stockholders. The aforesaid
6,670,000 shares of Common Stock (the "Initial Securities") to be purchased by
the Underwriters and all or any part of the 1,000,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "Option Securities")
are collectively hereinafter called the "Securities."
Prior to the purchase and public offering of the Securities by
the Underwriters, the Representatives, acting on behalf of the several
Underwriters, shall enter into an agreement substantially in the form of Exhibit
A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of
an exchange of any standard form of written telecommunication between the
Company, the Selling Stockholders and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
Securities will be governed by this Underwriting Agreement (this "Agreement"),
as supplemented by the Pricing Agreement. From and after the date of the
execution and delivery of the Pricing Agreement, this Agreement shall be deemed
to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") registration statement on Form S-1 (No. 333-53375)
and a related preliminary prospectus for the registration of the Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and has filed
such amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof. Such registration statement (as
amended, if applicable) and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to Rule
430A(b) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations")), as from time to time amended or supplemented pursuant
to the 1933 Act or otherwise, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be provided to the Underwriters by the Company in connection
with the offering of the Securities which differs from the Prospectus on file at
the Commission at the time the Registration Statement becomes effective (whether
or not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer
to such revised Prospectus from and after the time it is first provided to the
Underwriters for such use. Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is hereinafter referred to as the "462(b)
Registration Statement," and after such filing the term Registration Statement
shall include the 462(b) Registration Statement.
The Company and each of the Selling Stockholders understands
that the Underwriters propose to make a public offering of the Securities as
soon as the Representatives deem advisable after the Registration Statement and
any 462(b) Registration Statement become effective and the Pricing Agreement has
been executed and delivered.
SECTION 1. Representations and Warranties of the Company. (a)
The Company represents and warrants to each Underwriter as of the date hereof
and as of the date of the Pricing Agreement (such latter date being hereinafter
referred to as the "Representation Date") as follows:
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(i) At the time the Registration Statement and any
462(b) Registration Statement become effective and at the
Representation Date, the Registration Statement and the 462(b)
Registration Statement will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, and the
Registration Statement and the 462(b) Registration Statement 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. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the time it
is first provided to the Underwriters for such use) and at the Closing
Time referred to in Section 2, will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement, the 462(b)
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus.
Each prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the 1933 Act, complied when so filed
in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) The accountants who certified the financial
statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(iii) The financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis; and the supporting schedules in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement.
(iv) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has
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been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(v) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
Delaware with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and, except as otherwise set forth in the Registration
Statement and the Prospectus, the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not result in a
Material Adverse Effect.
(vi) Each subsidiary of the Company (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable, and is, directly or
through Subsidiaries, wholly owned by the Company, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of preemptive or similar rights.
Attached hereto as Schedule III is a true and complete list of the
Subsidiaries of the Company.
(vii) The Company has the authorized, issued and
outstanding capitalization set forth in the Prospectus; the shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was
issued in violation of preemptive or other similar rights; the
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company in the manner contemplated by this Agreement, will be
validly issued and fully paid and non-assessable; the issuance of
shares of Common Stock contemplated by this Agreement is not subject to
preemptive or other similar rights; the Common Stock conforms to all
statements relating thereto contained in the Prospectus and such
statements conform to the rights set
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forth in the instruments defining the same; the certificates for the
Securities are in due and proper form; and the holders of the
Securities will not be subject to personal liability by reason of being
such holders.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) Neither the Company nor any of its Subsidiaries
is in violation of its respective charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, loan agreement or note
or in any contract, lease or other instrument to which the Company or
any Subsidiary is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
Subsidiary is subject, except for such defaults that would not, singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect; the consummation of the transactions contemplated herein and by
the Pricing Agreement and in the Registration Statement has been duly
authorized by the Company by all necessary corporate action and the
issuance, sale and delivery of the shares of Common Stock to be issued
and sold by the Company and the execution, delivery and performance of
this Agreement by the Company will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any Subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any Subsidiary is subject, nor will such action result in any violation
of the provisions of the respective charter or by-laws of the Company
or any Subsidiary or any applicable law, rule, statute, administrative
regulation or administrative or court decree, except in each case, for
such conflicts, defaults or violations that would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(x) No labor dispute with the employees of the
Company or any Subsidiary exists or, to the knowledge of the Company,
has been threatened; and the Company is not aware of any existing or
threatened labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers or distributors which might reasonably
be expected to result in a Material Adverse Effect.
(xi) There is no action, suit, proceeding or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which
is required to be disclosed in the Registration Statement (other than
as disclosed therein), or which, considered singly or in the aggregate,
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or which may materially or adversely
affect the consummation of the transactions contemplated by this
Agreement or the Pricing Agreement or the performance by the Company of
its obligations thereunder; all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of
which
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any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of the
Company which are required to be described in the Registration
Statement or the Prospectus or filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so described and filed as required.
(xii) The Company and its Subsidiaries own or
possess, or can acquire on reasonable terms, the patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names (collectively, "intellectual property") presently
employed by them in connection with the business now operated by them,
except where the failure to own or possess or have the ability to
acquire any such intellectual property would not reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Effect.
(xiii) No filing with, or authorization, approval or
consent of any court or governmental authority or agency is necessary
or required in connection with the sale of the Securities hereunder or
the consummation by the Company of the transactions contemplated
hereby, except such as may be required under the 1933 Act or the 1933
Act Regulations, which qualification has been obtained, or state and
foreign securities laws.
(xiv) Except as otherwise set forth in the
Registration Statement and the Prospectus, the Company and its
Subsidiaries possess such certificates, authorizations, licenses or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, license or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to result in
a Material Adverse Effect.
(xv) All United States federal income tax returns of
the Company and its consolidated Subsidiaries required by law to be
filed have been filed and all taxes shown by said returns or otherwise
assessed which are due and payable have been paid, except assessments
against which appeals have been or will be promptly taken. The United
States federal income tax returns of the Company and its Subsidiaries
through the fiscal year ended [1992] have been settled and no
assessment in connection therewith has been made against the Company or
any of its Subsidiaries. The Company and its Subsidiaries have filed
all other tax returns which are required to have been filed by them
pursuant to applicable state, local or other law except insofar as the
failure to file such returns individually and in the aggregate would
not have a Material Adverse Effect, and have paid all taxes due
pursuant to said
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returns or pursuant to any assessment received by the Company or its
Subsidiaries, except for such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. The
charges, accruals and reserves on the consolidated books of the Company
in respect of any income and corporation tax liability for any years
not finally determined are adequate to meet any assessment or
re-assessments for additional income tax for any years not finally
determined.
(xvi) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general
or specific authorization, (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets, (C) access to assets is
permitted only in accordance with management's general or specific
authorization, and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xvii) There are no holders of securities (debt or
equity) of the Company, or holders of rights, options or warrants to
obtain securities of the Company, who, by reason of the filing of the
Registration Statement under the 1933 Act, have the right to request
the Company to register under the 1933 Act securities held by them
except for those holders of securities who have waived such rights; and
(b) the Company complied in all material respects with all of the terms
of any outstanding agreements relating to the rights of any holder of
securities to have securities registered under the Registration
Statement. 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 Common Stock or any security convertible into or exchangeable
or exercisable for any shares of Common Stock.
(xviii) The Company and its Subsidiaries have good
title to all properties owned by them, in each case free and clear of
all liens, encumbrances and defects except (A) as do not materially
interfere with the use made and proposed to be made of such properties,
(B) as described in the Prospectus (including the notes to the
financial statements included therein) or (C) as could not, singly or
in the aggregate, 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 or any of its Subsidiaries and all of the
leases and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company
or any of its Subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease, which, in either case, may be expected to
result in a Material Adverse Effect.
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(xix) The Company has complied with, and is and will
be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
571.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xx) The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus 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.
(xxi) Except as disclosed in the Registration
Statement, the Company and each Subsidiary is in compliance with all
applicable existing federal, state and local laws and regulations
(including any laws or regulations relating to Hazardous Material
("Environmental Laws")), except where such noncompliance, singly or in
the aggregate, would not result in a Material Adverse Effect. The term
"Hazardous Material" means (A) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (B) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (C) any petroleum
or petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(xxii) There is no alleged liability, or to the best
knowledge and information of the Company, potential liability
(including, without limitation, alleged or potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or
penalties) of the Company or any Subsidiary arising out of, based on or
resulting from (A) the presence or release into the environment of any
Hazardous Material at any location at which the Company or any
Subsidiary has previously conducted or is currently conducting any
business (whether or not owned by the Company or any Subsidiary) or has
previously owned or currently owns any property, or (B) any violation
or alleged violation of any Environmental Law, (X) which alleged or
potential liability is required to be disclosed in the Registration
Statement, other than as disclosed therein, or (Y) which alleged or
potential liability would, singly or in the aggregate, result in a
Material Adverse Effect.
(xxiii) The Company and its Subsidiaries maintain
adequate insurance with respect to their properties and business
against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar
businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by such other
corporations.
(xxiv) The shares of Common Stock to be issued and
sold by the Company pursuant to this Agreement will at the Closing Time
(as hereinafter defined) be duly authorized for listing on the Nasdaq
National Market System ("Nasdaq"), subject only to official notice of
issuance.
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(xxv) The Company has furnished the Representatives
letters from each of the executive officers and directors of the
Company pursuant to which such persons have agreed during a period of
180 days from the date hereof that, without the prior written consent
of McDonald, such persons will not sell, offer to sell, contract to
sell, or otherwise dispose of, directly or indirectly, any shares of
Common Stock, any other equity security of the Company, or any security
convertible into or exchangeable or exercisable for shares of Common
Stock, beneficially owned by such person or with respect to which such
person has the power of disposition, other than as bona fide gifts.
(xxvi) The Company is, and immediately after the
Closing Time will be, Solvent. As used herein, the term "Solvent"
means, with respect to the Company on a particular date, that on such
date (A) the fair market value of the assets of the Company is greater
than the total amount of liabilities (including contingent liabilities)
of the Company, (B) the present fair salable value of the assets of the
Company is greater than the amount that will be required to pay the
probable liabilities of the Company on its debts as they become
absolute and matured, (C) the Company is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature, and (D) the Company does not have
unreasonably small capital.
(b) Each of the Selling Stockholders represents, warrants and
agrees that:
(i) Such Selling Stockholder has, and immediately
prior to the Closing Time (as defined in Section 2 hereof) such Selling
Stockholder will, have good and valid title to the shares of Common
Stock to be sold by the Selling Stockholder hereunder on such date,
free and clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(ii) Such Selling Stockholder has full right, power
and authority to enter into this Agreement and the Pricing Agreement;
the execution, delivery and performance of this Agreement and the
Pricing Agreement by such Selling Stockholder and the consummation by
such Selling Stockholder of the transactions contemplated hereby and
thereby 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 Selling Stockholder is a party or by which
the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions
result in any violation of the provisions of the organizational
documents or documents creating a partnership or a trust of the Selling
Stockholder or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling
Stockholder; and, except for the registration of the Securities under
the 1933 Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable
state securities laws in connection with the purchase and distribution
of the Common Stock by the Underwriters, no consent, approval,
authorization
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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 Pricing Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby.
(iii) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the shares
of the Securities.
(iv) Such Selling Stockholder has no reason to
believe that the representations and warranties of the Company
contained in this Section are not true and correct, is familiar with
the Registration Statement and the Prospectus and has no knowledge of
any material fact, condition or information not disclosed in the
Registration Statement, as of the effective date, or the Prospectus, as
of the applicable filing date, which has adversely affected or may
adversely affect the business of the Company and is not prompted to
sell shares of Common Stock by any information concerning the Company
which is not set forth in the Registration Statement and the
Prospectus.
(c) Any certificate signed by an officer of the Company or by
any of the Selling Stockholders or an officer of any of the Selling
Stockholders, as the case may be, and delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company or a Selling Stockholder, as the case may be, to each Underwriter as
to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing. (a) On
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
6,670,000 shares of Common Stock to the Underwriters, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price
agreed upon by the Representatives and the Company as set forth in the Pricing
Agreement, the number of shares of Common Stock set forth in Schedule I opposite
the name of such Underwriter (except as otherwise provided in the Pricing
Agreement). Each Underwriter shall be obligated to purchase from the Company
that number of shares of the Common Stock which represents the same proportion
of the number of shares of the Common Stock to be sold by the Company as the
number of shares of the Common Stock set forth opposite the name of such
Underwriter in Schedule I represents of the total number of shares of the Common
Stock to be purchased by all of the Underwriters pursuant to this Agreement. The
respective purchase obligations of the Underwriters with respect to the Common
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
(i) If the Company has elected not to rely upon Rule
430A under the 1933 Act Regulations, the initial public offering price
of the Securities and the purchase price of the Securities to be paid
by the several Underwriters shall be agreed upon and set forth in the
Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus will be filed before the
Registration Statement becomes effective.
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(ii) If the Company has elected to rely upon Rule
430A under the 1933 Act Regulations, the initial public offering price
of the Securities and the purchase price of the Securities to be paid
by the several Underwriters shall be determined by agreement among the
Representatives, the Company and the Selling Stockholder and set forth
in the Pricing Agreement. In the event that such prices have not been
agreed upon and the Pricing Agreement has not been executed and
delivered by all parties thereto by the close of business on the fourth
business day following the date of this Agreement, this Agreement shall
terminate forthwith, without liability of any party to any other party,
unless otherwise agreed to by the Company, the Selling Stockholder and
the Representatives.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to ______________ shares of Common Stock and each
of the Selling Stockholders hereby grants an option to the Underwriters,
severally and not jointly, to purchase up to _____________ shares of Common
Stock, at the price per share set forth in the Pricing Agreement. The option
hereby granted will expire 30 days after (i) the date the Registration Statement
becomes effective, if the Company has elected not to rely on Rule 430A under the
1933 Act Regulations or (ii) the date of the Pricing Agreement, if the Company
has elected to rely on Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part (not more than once) only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of payment (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full Business Days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined, unless otherwise agreed
by the Representatives and the Company. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, (i) shall be obligated to purchase from the Company and each
of the Selling Stockholders that number of shares of Common Stock which
represents the same proportion of the number of shares of Option Securities to
be sold by the Company or a Selling Stockholder, as the case may be, as set
forth on Schedule II represents to the total number of Option Securities then
being purchased by the Underwriters and (ii) will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule I opposite the name of such
Underwriters bears to the total number of Initial Securities (except as
otherwise provided in the Pricing Agreement), subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
XxXxxxxx & Company Securities, Inc., 0000 XxXxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxx or at such other place as shall be agreed upon by the Representatives and
the Company at 10:00 A.M. on the third business day (unless postponed in
accordance with the provisions of Section 10) following the date the
Registration Statement becomes effective (or, if the Company has elected to rely
upon Rule 430A, the third business day after
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execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called the
"Closing Time"); provided, however, that if the Registration Statement becomes
effective at or later than 4:30 p.m., Eastern Time, on any date, then, subject
to the foregoing, the Closing Time shall be the fourth business day thereafter
(or, if the Company has elected to rely upon Rule 430A, and the Pricing
Agreement is not executed until after 4:30 p.m., Eastern Time, on any date, the
fourth business day after execution of the Pricing Agreement). In addition, in
the event that any or all of the Option Securities are to be purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
for, such Option Securities shall be made at the above-mentioned offices of
XxXxxxxx & Company Securities, Inc., or at such other place as shall be agreed
upon by the Representatives, the Company and the Selling Stockholders on each
Date of Delivery as specified in the notice from the Representatives to the
Company. Payment shall be made to the Company and, if applicable, to each of the
Selling Stockholders by wire transfer of immediately available funds to accounts
designated by the Company and each respective Selling Stockholder, against
delivery of the Securities to the Underwriters. The certificates representing
Securities shall be in such denominations and registered in such names as the
Representatives may request in writing at least two business days before the
Closing Time. It is understood that each Underwriter has authorized the
Representatives, for their account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to
purchase. The Representatives may (but shall not be obligated to) make payment
of the purchase price for the Securities to be purchased by any Underwriter
whose check has not been received by the Closing Time, but such payment shall
not relieve such Underwriter from its obligations hereunder. The Securities will
be made available for examination and packaging by the Underwriters not later
than 10:00 A.M. on the last business day prior to the Closing Time at such place
as the Underwriters may designate in Cleveland, Ohio.
SECTION 3. Covenants of the Company and the Selling
Stockholders. The Company and each of the Selling Stockholders, as the case may
be, covenant with each Underwriter as follows:
(a) The Company will notify the Underwriters immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement, the 462(b) Registration Statement and any amendments thereto
(including any post-effective amendments), (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the suspension of the
qualification of the Securities for offering or sale, in any jurisdiction, or
the threatening or initiation of any proceeding for that purpose. The Company
will make reasonable efforts to prevent the issuance of any stop order or any
order preventing or suspending the use of any preliminary prospectus or
suspending such qualification and, if any stop order or any order preventing or
suspending the use of any preliminary prospectus or suspending such
qualification is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment), the
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462(b) Registration Statement or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish
the Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement or use any such prospectus to
which counsel for the Underwriters and counsel for the Company mutually agree
shall not be filed or used.
(c) The Company will deliver to the Underwriters one signed
copy of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein) and will also deliver to the Underwriters conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits).
(d) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered under the
1933 Act or the Securities Exchange of 1934, as amended (the "1934 Act"), such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the rules and regulations adopted
by the Commission pursuant to the 1934 Act (the "1934 Act Regulations").
(e) If any event shall occur as a result of which counsel for
the Company and counsel for the Underwriters mutually agree that it is necessary
to amend or supplement the Prospectus in order to make the Prospectus not
misleading in light of the circumstances existing at the time it is delivered to
a purchaser or if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations, the Company will
forthwith amend or supplement the Prospectus (in form and substance mutually
satisfactory to counsel for the Underwriters and counsel for the Company and in
compliance with the 1933 Act and the 1933 Act Regulations) so that, as so
amended or supplemented, the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time it is
delivered to a purchaser, not misleading and will comply with the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, and the Company
will furnish to the Underwriters a reasonable number of copies of such amendment
or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representatives may reasonably designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect, for a period of not less than one year from the
effective date of the Registration Statement.
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(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(h) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A of the 1933 Act Regulations, then immediately following the execution
of the Pricing Agreement, the Company will prepare, and file or transmit the
filing with the Commission in accordance with such Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(i) If the Company elects to rely upon Rule 462(b), the
Company shall both file a 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) of the 1933 Act Regulations and pay the applicable
fees in accordance with Rule 111 of the 1933 Act Regulations by the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents required to
be filed with the Commission pursuant to Sections 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(k) The Company will effect the listing of the Common Stock
issued and sold pursuant to this Agreement on the Nasdaq National Market
System.
(l) During a period of 180 days from the date hereof, the
Company and each of the Selling Stockholders will not, without the prior written
consent of McDonald, sell, offer to sell, contract to sell, or otherwise dispose
of, directly or indirectly, any shares of Common Stock, any other equity
security of the Company or any security convertible into or exchangeable or
exercisable for Common Stock (except for shares of Common Stock issued pursuant
to this Agreement and the Pricing Agreement, the grant of options or the
issuance of shares of Common Stock upon the exercise of outstanding options
under the Company's existing stock option plans).
(m) The Company and each of the Selling Stockholders will each
use all commercially reasonable efforts to do and perform all things required or
necessary to be done and performed by it under this Agreement prior to the
Closing Time and will satisfy all conditions precedent to the delivery of the
Securities.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
during the period specified in Section 3(d) hereof, (ii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, (iii) the fees and disbursements
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of the Company's counsel and accountants, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the fees and reasonable disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, which counsel fees shall not exceed $10,000,
(v) the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and each amendment thereto, of the preliminary
prospectuses, and of the Prospectus and any amendments or supplements thereto,
(vi) the printing and delivery to the Underwriters of the Blue Sky Survey, (vii)
the fees and expenses of the Company's transfer agent, (viii) the out-of-pocket
expenses of McDonald, including any fees, costs or expenses of counsel to the
Underwriters, (ix) the fee of the National Association of Securities Dealers,
Inc. and (x) the fees and expenses incurred in connection with the listing of
the Securities on Nasdaq.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i), the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses
relating to the transactions contemplated hereby, including the reasonable fees
and disbursements of counsel for the Underwriters in an amount not to exceed
$100,000.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein contained, to the performance by the Company and each of the Selling
Stockholders of its obligations hereunder, and to the following further
conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with the consent of the
Representatives, at a later time and date, not later, however, than 5:30 P.M. on
the first business day following the date hereof, or at such later time and date
as may be approved by the Underwriters; and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Securities and any price related information
previously omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations within the prescribed time period, and
prior to Closing Time the Company shall have provided evidence satisfactory to
McDonald 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 of the 1933 Act Regulations.
(b) At the Closing Time the Underwriters shall have received:
(i) An opinion, dated the Closing Time, of Squire,
Xxxxxxx and Xxxxxxx L.L.P., counsel for the Company [and the Selling
Stockholders], substantially in the form set forth on Annex I attached
hereto.
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(ii) An opinion, dated the Closing Time, of Benesch,
Friedlander, Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, in
form and substance reasonably satisfactory to the Underwriters.
(iii) In giving their opinions required by
subsections (b)(i) and (ii), respectively, of this section, Squire,
Xxxxxxx & Xxxxxxx L.L.P. and Benesch, Friedlander, Xxxxxx & Xxxxxxx LLP
shall each additionally state that although such counsel has not
undertaken to determine independently the accuracy, completeness and
fairness of the statements contained in the Registration Statement or
in the Prospectus and takes no responsibility therefor, such counsel
has participated in discussions and meetings with officers and other
representatives of the Company and discussions with the auditors for
the Company in connection with the preparation of the Registration
Statement and the Prospectus. Such counsel has not, however, undertaken
to determine independently and, therefore, does not assume any
responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. Nothing has come to such
counsel's attention that has caused such counsel to believe that (A)
the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or (B) the Prospectus, at the
Closing Time, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that in each case such counsel need not
express any opinion or belief with respect to the financial statements
or other financial data contained in the Registration Statement or the
Prospectus.
(c) At the Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any Material Adverse Effect, and
the Underwriters shall have received a certificate of the President of the
Company and the chief financial or chief accounting officer of the Company,
dated as of the Closing Time, to the effect that (A) there has been no such
material adverse change, (B) the representations and warranties in Section 1 are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, (C) the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (D) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission.
(d) At the time of the execution of this Agreement, the
Underwriters shall have received from BDO Xxxxxxx, LLP, independent certified
public accountants, a letter dated such date, in form and substance previously
approved by the Representatives, with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus.
(e) At the Closing Time, the Underwriters shall have received
from BDO Xxxxxxx, LLP, independent certified public accountants, a letter, dated
as of Closing Time, to the effect that
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it reaffirms the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a date
not more than five days prior to the Closing Time.
(f) At the Closing Time, the Representatives shall have been
furnished with such documents and opinions as it may reasonably require for the
purpose of enabling counsel for the Underwriters to pass upon the issuance and
sale of the Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(g) At the time of the execution of this Agreement, the
Representatives shall have received from each of the executive officers and
directors of the Company a letter in which each such person agrees during a
period of 180 days from the date hereof, that such person will not, without the
prior written consent of McDonald, sell, offer to sell, contract to sell, or
otherwise dispose of, directly or indirectly, any shares of Common Stock, any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for shares of Common Stock, beneficially owned by
such person or with respect to which such person has the power of disposition,
other than as bona fide gifts.
(h) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company and each of the
Selling Stockholders contained herein and the statements in any certificates
furnished by the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representatives shall have
received:
(i) A certificate, dated such Date of Delivery, from
the President of the Company and the chief financial or chief
accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(c) hereof remains
true and correct as of such Date of Delivery.
(ii) Certificates dated such Date of Delivery, from
Amedia and from the President of AAPH and the chief financial or chief
accounting officer of AAPH [other selling stockholders to come, if
any], addressing the matters set forth in Section 5(c) with respect to
the respective Selling Stockholder.
(iii) An opinion, dated such Date of Delivery, of
Squire, Xxxxxxx & Xxxxxxx L.L.P., counsel for the Company [and the
Selling Stockholders], substantially in the form set forth on Annex I
attached hereto.
(iv) An opinion, dated such Date of Delivery, of
Benesch, Friedlander, Xxxxxx & Xxxxxxx LLP, counsel for the
Underwriters, in form and substance reasonably satisfactory to the
Underwriters.
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(v) A letter from BDO Xxxxxxx, LLP, in form and
substance satisfactory to the Representatives and dated such Date of
Delivery, substantially the same in form and substance as the letter
furnished to the Underwriters pursuant to Section 5(e) hereof, except
that the "specified date" in the letter furnished pursuant to this
Section 5(h)(vi) shall be a date not more than five days prior to such
Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6 and 7 shall remain in effect.
SECTION 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act, and
each officer and director of each Underwriter and any such controlling person to
the extent and in the manner set forth as follows:
(i) against any and all loss, liability, claim,
damage, and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) of the 1933 Act regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation; or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(d) hereof, the fees and
disbursements of counsel chosen by the Underwriters), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by a governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
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provided, however, that this indemnity agreement shall not apply (A) to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement or Prospectus and (B) with respect to the Prospectus or
any preliminary prospectus to the extent that any loss, liability, claim, damage
or expense results from the fact that such Underwriter sold Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (and any amendment or
supplement thereto) in any case where such delivery is required by the 1933 Act
if the Company previously furnished copies thereof to such Underwriter and the
loss, liability, claim, damage or expense results from an untrue statement or
omission of a material fact contained in the Prospectus or any preliminary
prospectus which was corrected in the Prospectus (or any amendment or supplement
thereto).
(b) Each of the Selling Stockholders agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act, and each officer
and director of each Underwriter and any such controlling person to the extent
and in the manner set forth as follows against any and all loss, liability,
claim, damage, and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) relating to information
provided by such Selling Stockholder regarding his ownership of capital stock of
the Company, including Common Stock, to the extent of the aggregate amount paid
to such Selling Stockholder in accordance with the Pricing Agreement.
(c) Each Underwriter severally agrees to indemnify and hold
harmless each of the Selling Stockholders, the Company, its directors, each of
its officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(d) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be liable
for fees and expenses (which fees and expenses shall be reasonable) of more than
one counsel (in addition to any local counsel) separate from their own 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
general allegations or circumstances; provided, however, that if an indemnified
party shall have been advised in writing by counsel selected to
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represent the indemnified parties that an actual or potential conflict of
interest exists between the position of that indemnified party and other
indemnified parties, the indemnified party in question shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party, and the indemnifying parties shall be responsible for
the reasonable fees and expenses of such separate counsel.
SECTION 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company, each of the Selling Stockholders and the Underwriters shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and one or more
Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
public offering price appearing thereon and the Company is responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act, and
each officer and director of any Underwriter and of any such control person,
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement and the Pricing Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of the Agreement. (a) The
Representatives may terminate this Agreement, by notice to the Company, at any
time at or prior to Closing Time (i) if there has been, since the date of this
Agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States, or any new outbreak of hostilities or material escalation thereof
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 sale of the Securities, or (iii) if trading in the
Common Stock has been suspended by the Commission, or if trading generally on
Nasdaq has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by Nasdaq
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by federal, New York or Ohio authorities.
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(b) If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at Closing Time to purchase the Initial
Securities which it or they are obligated to purchase under this Agreement and
the Pricing Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements with such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Initial Securities, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in the
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
The Underwriters shall have the right to amend Schedule I
hereto by making such substitutions or corrections as indicated in the Pricing
Agreement.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed by registered or certified first class mail, postage prepaid, or by
nationally recognized overnight delivery service or transmitted and confirmed by
any standard form of telecommunications. Notices to the Underwriters shall be
directed to the Representatives, in care of XxXxxxxx & Company Securities, Inc.
at 0000 XxXxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, attention: Xxxx X.
Xxxxxx, Senior Vice President, notices to the Company shall be directed to it at
000 Xxxxxxxx-Xxxxxxxx Xxxx, Xxxxx Xxxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxx X Xxxx,
Xxxxxxxx, Xxxx 00000, attention: _________________________, facsimile number
________________ and notices to the Selling Stockholders shall be directed to
[TO COME].
SECTION 12. Parties. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Underwriters, the
Company and each of the Selling
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Stockholders and their respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Company
and the Selling Stockholders and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or the Pricing Agreement or any provision
herein and therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Stockholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No Purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Laws and Time. This Agreement and the
Pricing Agreement shall be governed by and construed in accordance with the
internal laws of the State of Ohio without giving effect to principles of
conflict of laws. Specified times of day refer to Cleveland Time. As used
herein, the term "business day" means any day on which the [Nasdaq National
Market System] is open for business.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Company and the Selling Stockholders in
accordance with its terms.
Very truly yours,
AMERICAN ARCHITECTURAL PRODUCTS
CORPORATION
By: _____________________________
Name:
Title:
CONFIRMED AND ACCEPTED
as of the date first above written: AAP HOLDINGS, INC.
XxXXXXXX & COMPANY
SECURITIES, INC. WHEAT FIRST
SECURITIES, INC.
By:______________________________
BY: McDONALD & COMPANY Name:
SECURITIES, INC. Title:
By: _______________________________
Name: ________________________________
Title: XXXXX X. XXXXXX
For themselves and as Representatives
of the other Underwriters in Schedule
I hereto. [MORE SELLING STOCKHOLDERS
TO COME, IF ANY]
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SCHEDULE I
Number
of Shares
Underwriters to be Purchased
------------ ---------------
XxXxxxxx & Company Securities, Inc.............................
Wheat First Securities, Inc....................................
Total.......................................
===============
24
SCHEDULE II
Number
of Shares
Selling Stockholders to be Sold
-------------------- ----------
American Architectural Products Corporation.........................
AAP Holdings, Inc...................................................
Xxxxx X. Xxxxxx.....................................................
[More selling stockholders to come, if any].........................
Total..................................................... ===========
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SCHEDULE III
SUBSIDIARIES OF AMERICAN ARCHITECTURAL PRODUCTS CORPORATION
26
EXHIBIT A
6,670,000 Shares
AMERICAN ARCHITECTURAL PRODUCTS CORPORATION
(A Delaware corporation)
COMMON STOCK
(Par Value $.01 Per Share)
PRICING AGREEMENT
____________, 1998
XxXXXXXX & COMPANY SECURITIES, INC.
WHEAT FIRST UNION
as Representatives of the Several Underwriters
c/x XxXxxxxx & Company Securities, Inc.
0000 XxXxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated
_____________, 1998 (the "Underwriting Agreement"), relating to the purchase by
the several Underwriters named in Schedule I thereto, for whom XxXxxxxx &
Company Securities, Inc. and Wheat First Union, a division of Wheat First
Securities, Inc., are acting as representatives, of the above shares of the
common stock, par value $.01 per share, of AMERICAN ARCHITECTURAL PRODUCTS
CORPORATION (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the
Company agrees with the Underwriters as follows:
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $________.
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2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $__________, being an amount equal to the
initial public offering price set forth above less $________ per share.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Company and the Selling Stockholders (as
defined in the Underwriting Agreement) in accordance with its terms.
Very truly yours,
AMERICAN ARCHITECTURAL PRODUCTS
CORPORATION
By: ___________________________
Name:
Title:
AAP HOLDINGS, INC.
CONFIRMED AND ACCEPTED
as of the date first above written:
By: ___________________________
Name:
Title:
XxXXXXXX & COMPANY
SECURITIES, INC. WHEAT FIRST _______________________________
SECURITIES, INC. XXXXX X. XXXXXX
BY XxXXXXXX & COMPANY
SECURITIES, INC.
[More selling stockholders
to come, if any]
By: _______________________________
Name:
Title:
For themselves and as Representatives of
the other Underwriters in Schedule I to
the Underwriting Agreement.
A-2
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Annex I
Form of Opinion of
Squire, Xxxxxxx & Xxxxxxx L.L.P.
(i) The Company is duly incorporated, validly existing, and in
good standing under the laws of the state of Delaware, and has the corporate
power and authority to own or lease its properties and to conduct its business
as described in the Prospectus, and to execute, deliver and perform its
obligations under the Underwriting Agreement. Each of the Selling Stockholders
has the requisite power and authority to execute, deliver and perform its
obligations under the Underwriting Agreement.
(ii) The Company is duly qualified as a foreign corporation to
do business and is in good standing each jurisdiction where it is required to be
so qualified, except where the failure to be so qualified would not,
individually or in the aggregate, result in a Material Adverse Effect.
(iii) The authorized capital stock of the Company consists of:
(a) __________ shares of common stock, par value $.01 per share ("Common
Stock"), of which upon completion of this Offering __________ shares are issued
and outstanding; and (b) __________ shares of preferred stock, par value $.01
per share, of which __________ shares are issued and outstanding. Except as
otherwise stated in the Prospectus, all of the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable; and, to our knowledge, none of the outstanding
shares of capital stock of the Company was issued in violation of preemptive or
other similar rights. The Securities to be sold by the Company pursuant to the
Underwriting Agreement have been duly authorized for issuance and sale to the
Underwriters pursuant to the Underwriting Agreement and, when issued and
delivered by the Company in the manner contemplated by the Underwriting
Agreement, will be validly issued and fully paid and nonassessable. The issuance
and sale of the Securities by the Company and the Selling Stockholders is not
subject to preemptive or other similar rights.
(iv) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, except
where the failure so to qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights. There are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exchangeable
29
for, or agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity interest in any Subsidiary.
(v) Based on telephonic information from the Commission on
__________ , 1998, the Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rue 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus, and each amendment or supplement to the
Registration Statement and Prospectus, as of their respective effective or issue
dates (other than the financial statements and notes thereto and the schedules
and other financial and statistical data included therein or omitted therefrom,
as to which we express no opinion) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(vii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the Certificate of
Incorporation and by-laws of the Company and the applicable statutory
requirements of the Delaware General Corporation Law.
(viii) To our knowledge and other than as described in the
Prospectus, there is not pending or threatened any action, suit, proceeding,
inquiry or investigation, to which the Company or any Subsidiary is a party, or
to which the property of the Company or any Subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in the
Underwriting Agreement or the performance by the Company of its obligations
thereunder.
(ix) The information in the Prospectus under
"_________________", "______________________", "________________________" and
"____________________", and in the Registration Statement under Item 15, to the
extent that it constitutes matters of law, summaries of legal matters, the
Company's Certificate of Incorporation and by-laws or legal proceedings, or
legal conclusions, has been reviewed by us and is correct in all material
respects.
(x) To our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(xi) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its Subsidiaries are a
party are accurate in all material respects; to our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
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30
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material respects.
(xii) To our knowledge, neither the Company nor any Subsidiary
is in violation of its charter or by-laws and, to our knowledge, no default by
the Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other material
agreement or instrument that is described or referred to in the Registration
Statement or the Prospectus or filed as an exhibit to the Registration
Statement.
(xiii) There are no holders of securities of the Company who,
by reason of the filing of the Registration Statement under the 1933 Act, have
the right to request the Company to register under the 1933 Act securities held
by them.
(xiv) Except for the order of the Commission under the 1933
Act, which has been obtained, and permits and similar authorizations required
under the securities or Blue Sky laws of certain jurisdictions, no consent,
approval, authorization or other order from, and no filing with or notice to,
any State or Federal regulatory body, administrative agency, or other
governmental authority, and no filing with or notice to, to our knowledge, any
other person or entity, is required for the due authorization, execution,
delivery and performance by the Company and each of the Selling Stockholders of
the Underwriting Agreement or for the offering, issuance, sale or delivery of
the Securities.
(xv) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company, and each of the Selling Stockholders, and
is a valid and binding obligation of the Company and each of the Selling
Stockholders, enforceable against the Company and each of the Selling
Stockholders in accordance with its terms except as rights to indemnity and
contribution thereunder may be limited under applicable securities laws.
(xvi) The Company is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(xvii) The execution and delivery by the Company and each of
the Selling Stockholders of the Underwriting Agreement and the performance of
its obligations thereunder will not (A) result in the violation of any statute
or regulation, or any order or decree known to us of any court or governmental
authority binding upon the Company or an Subsidiary, the property of the Company
or any Subsidiary or any of the Selling Stockholders, (B) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or in creation of a lien under any of the provisions of the
Company's Certificates of Incorporation or Bylaws or any indenture, mortgage,
deed of trust, loan agreement or other agreement to which the Company or any
Subsidiary is a party or by which it or any of them is bound, or (C) result in
the creation of any lien upon any of the properties or assets of the Company or
any Subsidiary.
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We have participated in the preparation of the Registration
Statement, the 462(b) Registration Statement and Prospectus. From time to time
we have had discussions with officers, directors and employees of the Company,
the Selling Stockholders, BDO Xxxxxxx, LLP, the independent accountants who
examined certain of the consolidated financial statements of the Company
included in the Registration Statement, the 462(b) Registration Statement and
Prospectus, and your representatives concerning the information contained in the
Registration Statement and Prospectus and the proposed responses to various
items in Form S-1. Based thereupon we are of the opinion that the Registration
Statement, the 462(b) Registration Statement, the Prospectus and each amendment
or supplement thereto and the documents incorporated by reference therein comply
as to form in all material respects with the requirements of the Securities Act
of 1933 or the Securities Exchange Act of 1934, as applicable, and the
applicable rules and regulations thereunder (except for the operating
statistics, financial statements and the notes thereto, financial schedules,
other financial, statistical and accounting data included therein as having been
included in the Registration Statement, the 462(b) Registration Statement and
Prospectus on the authority of BDO Xxxxxxx, LLP as experts).
We have not independently verified and are not passing upon,
and do not assume any responsibility for, the accuracy, completeness or fairness
(except as set forth in the third preceding paragraph above) of the information
contained in the Registration Statement and Prospectus. Based upon the
participation and discussions described above, however, no facts have come to
our attention that cause us to believe that the Registration Statement (except
for the operating statistics, financial statements and the notes thereto,
financial schedules, other financial, statistical and accounting data included
therein and except for the information referred to under the caption "Experts"
as having been included in the Registration Statement and Prospectus on the
authority of BDO Xxxxxxx, LLP, as experts, as to all of which we express no
view), at the time it became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus (with the foregoing exceptions), at such time or on the date hereof
included or includes any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4
