1
EXHIBIT 1.1
MBP Draft 11/3/97
$100,000,000
SCOTSMAN GROUP INC.
__% SENIOR SUBORDINATED NOTES DUE 2007
UNCONDITIONALLY GUARANTEED BY
SCOTSMAN INDUSTRIES, INC.
FORM OF
UNDERWRITING AGREEMENT
________, 1997
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______, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
First Chicago Capital Markets, Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Scotsman Industries, Inc., a Delaware corporation (the "GUARANTOR"), and
Scotsman Group Inc., a Delaware corporation (the "ISSUER"), propose to issue
and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") $100,000,000 aggregate principal amount of the Issuer's __%
Senior Subordinated Notes Due 2007 (the "NOTES") unconditionally guaranteed by
the Guarantor (the "GUARANTY") to be issued pursuant to the provisions of an
Indenture dated as of _____, 1997 (the "INDENTURE") among the Issuer, the
Guarantor and Xxxxxx Trust and Savings Bank, as Trustee (the "TRUSTEE"). The
Notes and the Guaranty are collectively referred to as the "SECURITIES."
The Issuer and the Guarantor have filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement, including two
prospectuses (one of which relates to the Securities and the other of which
relates to shares of common stock, par value $.10 per share, of the Guarantor
(the "Common Stock") to be offered and sold by certain stockholders of the
Guarantor named therein). The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and any
documents incorporated by reference therein as of the date of this Agreement, is
hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus in the
form first used to confirm sales of Securities, and any documents incorporated
by reference therein as of the date of this Agreement, is hereinafter referred
to as the "PROSPECTUS." If the Issuer and the Guarantor have filed an
abbreviated registration statement to register additional Notes, including the
related Guaranty, pursuant to Rule 462(b) under the Securities Act (the "RULE
462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
1. Representations and Warranties. The Issuer and the Guarantor represent
and warrant to and agree with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
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(b) (i) Each document, if any filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
incorporated by reference in the Prospectus complied or will comply when
so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any 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, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply
to (A) statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished
to the Guarantor in writing by such Underwriter through you expressly for
use therein or (B) that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), of the
Trustee.
(c) The consolidated financial statements included in the
Registration Statement present fairly in all material respects the
financial position of the Guarantor and its subsidiaries as of the dates
indicated and the consolidated results of the operations and cash flows
of the Guarantor and its subsidiaries for the periods specified. Such
financial statements (except as disclosed in the notes thereto or
otherwise stated therein) have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the entire periods involved. The financial statement schedules, if any,
included in the Registration Statement present fairly in all material
respects the information stated therein. The selected financial data
included in the Prospectus present fairly in all material respects the
information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements included in
the Registration Statement. The pro forma financial statements and other
pro forma financial information, if any, included in the Registration
Statement present fairly in all material respects the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been
properly compiled on the pro forma bases described therein, and, in the
opinion of the Guarantor and the Issuer, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
(d) Each of the Guarantor and the Issuer has been duly
incorporated, 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 its property and to conduct
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its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on (i) the Guarantor and its subsidiaries (as defined in Rule
1-02(x) of the Commission's Regulation S-X), taken as a whole (a
"Material Adverse Effect").
(e) Each subsidiary of the Issuer has been duly incorporated, 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 its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued shares of
capital stock of each subsidiary of the Issuer have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Issuer (other than directors' qualifying shares and
shares held by other persons to the extent such shares are required by
applicable law to be held by a person other than the Issuer), free and
clear of all liens, encumbrances, equities or claims.
(f) This Agreement has been duly authorized, executed and delivered
by the Issuer and the Guarantor.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Issuer
and the Guarantor and is a valid and binding agreement of the Issuer and
the Guarantor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity.
(h) (i) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Issuer,
enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws affecting creditors' rights generally and
general principles of equity; and (ii) the Guaranties have been duly
authorized and, will be, when the Notes have been executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, valid and binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws affecting creditors' rights generally and
general principles of equity.
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(i) The execution and delivery by the Issuer and the Guarantor of,
and the performance by the Issuer and the Guarantor of their respective
obligations under, this Agreement, the Indenture, the Notes and the
Guaranties will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Issuer or the Guarantor or
any agreement or other instrument binding upon the Issuer or the
Guarantor or any of their respective subsidiaries that is material to the
Issuer or the Guarantor and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Issuer or the Guarantor or any of their
respective subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required
for the performance by the Issuer or the Guarantor of their respective
obligations under this Agreement, the Indenture, the Notes or the
Guaranties, except such as may be required by any securities or Blue Sky
laws other than the federal securities laws in connection with the offer
and sale of the Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to
the knowledge of the Issuer and the Guarantor, threatened to which the
Guarantor or any of its subsidiaries is a party or to which any of the
properties of the Guarantor or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus related to the Securities 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 Securities
Act, complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.
(m) Neither the Issuer nor the Guarantor is and, after giving
effect to the offering and sale of the Securities and the application of
the net proceeds thereof as described in the Prospectus, will be an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(n) The Guarantor and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection
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of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a Material Adverse Effect.
(o) The Issuer and the Guarantor have complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Agreements to Sell and Purchase. The Issuer hereby agrees to sell to
the several Underwriters, the Guarantor agrees to guarantee, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Issuer the respective principal amounts
of the Notes set forth in Schedule I hereto opposite its name at ___% of their
principal amount plus accrued interest, if any, from ___, 199_ to the date of
payment and delivery.
3. Terms of Public Offering. The Issuer and the Guarantor are advised
by you that the Underwriters propose to make a public offering of their
respective portions of the Securities as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Issuer and the Guarantor are further advised by you that the Securities are to
be offered to the public initially at ___% of their principal amount (the
"PUBLIC OFFERING PRICE") plus accrued interest, if any, from _____, 1997 to the
date of payment and delivery and to certain dealers selected by you at a price
that represents a concession not in excess of ___% of their principal amount
and that any Underwriter may allow, and such dealers may reallow, a concession,
not in excess of ___% of their principal amount, to any Underwriter or to
certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be made to the
Issuer in Federal or other funds immediately available in Chicago, Illinois at
9:00 a.m., Chicago, Illinois time, on _____, 199_, or at such other time on the
same or such other date, not later than _____, 199_, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "CLOSING DATE."
Payment for the Securities shall be made against delivery to you on the
Closing Date for the respective accounts of the several Underwriters of the
Securities registered in such names and in such denominations as you shall
request in writing not less than one full business day prior to the Closing
Date with any transfer taxes payable in connection with the transfer of the
Securities to the Underwriters duly paid.
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5. Conditions to the Underwriters' Obligations. The obligations of the
Issuer and the Guarantor to sell the Securities to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Securities
are subject to the condition that the Registration Statement shall have become
effective not later than [____] (Chicago, Illinois time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) All the representations and warranties of the Issuer and the
Guarantor contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing, and the Issuer and the Guarantor each shall have complied in all
material respects with all of the agreements and satisfied all of the
conditions on its respective part to be performed or satisfied hereunder
on or before the Closing Date.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the
Guarantor or the Issuer or any of the Guarantor's or the Issuer's
securities or in the rating outlook for the Guarantor or the Issuer
by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Guarantor and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date
certificates, dated the Closing Date and signed respectively by an
executive officer of the Issuer and the Guarantor, to the effect set
forth in Section 5(b)(i) above and to the effect that the representations
and warranties of the Issuer and the Guarantor contained in this
Agreement are true and correct as of the Closing Date and that the Issuer
and the Guarantor have complied with all of the agreements and satisfied
all of the conditions on the part of the Issuer and the Guarantor to be
performed or satisfied hereunder on or before the Closing Date.
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Any officer signing and delivering such certificates may rely upon
the best of his or her knowledge as to proceedings threatened.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxxxx, special counsel to the Issuer and the
Guarantor, dated the Closing Date, to the effect that:
(i) each of the Issuer and the Guarantor 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
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect (in rendering
the foregoing opinion, Xxxxxx & Xxxxxx may rely upon certificates of
the Issuer and the Guarantor as to what jursidictions the Issuer and
the Guarantor are required to be qualified in to the extent Sidley &
Xxxxxx believes the reliance upon such certificate is reasonable);
(ii) each significant subsidiary (as defined in Rule 1-02(w)
of the Commission's Regulation S-X) (hereafter a "Subsidiary") of
the Guarantor (other than the Issuer) 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 its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a Material Adverse Effect (in rendering the
foregoing opinion, Xxxxxx & Xxxxxx may rely upon a certificate of
the Guarantor as to what jursidictions the Subsidiaries are required
to be qualified in to the extent Sidley & Xxxxxx believes the
reliance upon such certificate is reasonable);
(iii) this Agreement has been duly authorized, executed and
delivered by each of the Issuer and the Guarantor;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered
by each of the Issuer and the Guarantor and, assuming it has been
duly executed and delivered by the Trustee and is the valid and
binding agreement of the Trustee, is a valid and binding agreement
of each of the Issuer and the Guarantor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent
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transfer or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
(v) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Issuer,
enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
(vi) the Guaranties have been duly authorized and, will be,
when the Notes have been executed and authenticated in
accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriters in accordance with the terms of this
Agreement, valid and binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
(vii) the execution and delivery by each of the Issuer and the
Guarantor of, and the performance by each of the Issuer and the
Guarantor of their respective obligations under, this Agreement, the
Indenture, the Notes and the Guaranties will not contravene any
provision of applicable law or the certificate of incorporation or
by-laws of the Issuer or the Guarantor or, to such counsel's
knowledge after reasonable inquiry, any agreement or other
instrument binding upon the Guarantor or any of its subsidiaries
that is material to the Guarantor and its subsidiaries, taken as a
whole, or, to such counsel's knowledge after reasonable inquiry, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Guarantor or any of its subsidiaries,
and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Issuer or the Guarantor of their respective
obligations under this Agreement, the Indenture, the Notes and the
Guaranties, except such as may be required by any securities or Blue
Sky laws other than the federal securities laws in connection with
the offer and sale of the Securities;
(viii) the statements (A) in the Prospectus under the caption
"Description of Credit Facility" and (B) in the Registration
Statement in Items 14
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and 15, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to therein,
fairly present in all material respects the information called for
with respect to such legal matters, documents and proceedings by
the Securities Act;
(ix) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Issuer, the Guarantor
or any Subsidiary is a party or to which any of the properties of
the Issuer, the Guarantor or any Subsidiary is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus (or required to be
filed under the Exchange Act) if upon such filing they would be
incorporated, in whole or in part, by reference therein) or to be
filed as exhibits to the Registration Statement that are not
described or filed as required;
(x) In addition, such counsel shall state that in the course
of the preparation of the Registration Statement and the Prospectus,
such counsel has considered the information set forth therein in
light of the matters required to be set forth therein and
participated in conferences with representatives of the Underwriters
and officers and representatives of the Issuer and the Guarantor,
including their counsel and independent public accountants, during
the course of which the contents of the Registration Statement and
the Prospectus and related matters were discussed, and, although
such counsel has not independently checked the accuracy or
completeness of, or otherwise verified, and accordingly is not
passing upon, and does not assume responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except as set forth in
paragraph (viii) above, and such counsel has relied as to factual
aspects of materiality, to the extent such counsel may reasonably do
so in the discharge of such counsel's professional responsibility,
upon the judgment of officers and representatives of the Issuer and
the Guarantor, as a result of such consideration and participation,
nothing has come to such counsel's attention which causes it to
believe that the Registration Statement (other than the financial
statements, financial data, statistical data and supporting
schedules, as to which such counsel need not express a belief), at
the time it became effective (but after giving effect to Rule 430A
under the Securities Act, if applicable) 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 (other than the
financial statements, financial data, statistical data and
supporting schedules, as to which such counsel need not express a
belief), as of its date or the Closing Date, included any untrue
statement of a material fact or omitted 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.
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In rendering such opinion, such counsel may (i) state that (A)
its opinion is limited to the laws of the United States of America,
the laws of the States of Illinois and New York and the General
Corporation Law of the State of Delaware and (B) any opinion or
statement that is expressed to be "to its knowledge" or is
otherwise qualified by words of like import means that the lawyers
currently practicing law with such counsel who have had an active
involvement in the transactions contemplated hereby have no current
conscious awareness of any facts or information contrary to such
opinion or statement and (ii) rely as to matters of fact upon the
representations contained in this Agreement and certificates of
officers of the Issuer and the Guarantor and of public officials,
provided that such counsel believes such reliance is reasonable.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 5(d)(iii),
5(d)(iv), 5(d)(v), 5(d)(vi) and 5(d)(x). In addition the opinion will
provide that the statements in the Prospectus under the captions
"Description of the Notes" and "Underwriters", in each case insofar as
such statements constitute summaries of the legal matters, documents and
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
With respect to Section 5(d)(x) above, Xxxxxx & Xxxxxx may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is
without independent check or verification except as specified. With
respect to section 5(d)(x) above, Xxxxx, Xxxxx & Xxxxx may state that
their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (other than the documents incorporated
by reference) and review and discussion of the contents thereof
(including documents incorporated therein by reference), but are without
independent check or verification except as specified.
The opinion of Xxxxxx & Xxxxxx described in Section 5(d) above shall
be rendered to the Underwriters at the request of the Issuer and the
Guarantor and shall so state therein.
(f) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Xxxxxx Xxxxxxxx LLP and Coopers & Xxxxxxx LLP,
each independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information
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contained in or incorporated by reference into the Registration Statement
and the Prospectus; provided that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
6. Covenants of the Issuer and the Guarantor. In further consideration
of the agreements of the Underwriters herein contained, the Issuer and the
Guarantor covenant with each Underwriter as follows:
(a) To furnish you, without charge, 3 signed copies of the
Registration Statement (including exhibits thereto and, upon your
request, documents incorporated therein by reference) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto but including, upon your request, documents
incorporated therein by reference) and to furnish you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period
mentioned in Section 6(c) below, as many copies of the Prospectus, any
documents incorporated therein by reference and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement
to which you reasonably object, and to file with the Commission within
the applicable period specified in Rule 424(b) under the Securities Act
any prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Guarantor)
to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus, as amended or supplemented, will comply with law.
(d) To cooperate with you to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request; provided that in connection therewith neither
the Issuer nor the Guarantor shall be required to qualify as a foreign
corporation or to file a general consent to service of
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process in any jurisdiction or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise
subject.
(e) To make generally available to the Guarantor's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 1998 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and continuing
to and including the Closing Date, not to offer, sell, contract to sell
or otherwise dispose of any debt securities of the Issuer or warrants to
purchase or otherwise acquire debt securities of the Issuer substantially
similar to the Securities (other than (i) the Securities and (ii)
commercial paper issued in the ordinary course of business), without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx").
(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of
the Issuer's and the Guarantor's counsel and the Issuer's and the
Guarantor's accountants in connection with the registration and delivery
of the Securities under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus related to the Securities, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to
the authentication and delivery of the Securities to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky memorandum in connection with the
offer and sale of the Securities under state securities laws and all
expenses in connection with the qualification of the Securities for offer
and sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with any Blue Sky memorandum, (iv) all filing fees and
disbursements of counsel to the Underwriters incurred in connection with
the review and qualification of the offering of the Securities by the
National Association of Securities Dealers, Inc., including without
limitation any counsel fees incurred on behalf of or disbursements by
Xxxxxx Xxxxxxx in its capacity as "qualified independent underwriter",
(v) any fees charged by the rating agencies for the rating of the
Securities, (vi) any costs and expenses incident to listing the
Securities on national securities exchanges and foreign stock exchanges,
(vii) the cost of printing certificates representing the Notes, (viii)
the costs and charges of any trustee, transfer agent, registrar or
depositary, (ix) the costs and expenses of the Guarantor relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Securities including, without
limitation, expenses associated with the production of road show slides
and
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14
graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Guarantor,
travel and lodging expenses of the representatives and officers of the
Guarantor and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (x) all other costs and
expenses incident to the performance of the obligations of the Issuer and
the Guarantor hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
transfer taxes payable on resale of any of the Securities by them and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) The Issuer and the Guarantor
jointly and severally agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
any amendment thereof, any preliminary prospectus related to the
Securities or the Prospectus (as amended or supplemented), or caused by
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
any Underwriter furnished to the Guarantor in writing by such Underwriter
through you expressly for use therein; provided that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Notes, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Issuer or the Guarantor shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale
of the Notes to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Issuer and the Guarantor with Section 6(a) hereof.
The Issuer and the Guarantor jointly and severally also agree to
indemnify and hold harmless Xxxxxx Xxxxxxx and each person, if any, who
controls Xxxxxx Xxxxxxx within the meaning of either Section 15 of the
Securities Act, or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments incurred as a
result of Xxxxxx Xxxxxxx'x participation as a "qualified independent
underwriter" within the meaning of Rule 2720 of the National Association
of Securities Dealers' Conduct Rules in connection with the offering of
the Securities, except for any losses, claims, damages,
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15
liabilities, and judgments resulting from Xxxxxx Xxxxxxx'x, or such
controlling person's willful misconduct.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Issuer, the Guarantor, their respective directors
and officers who sign the Registration Statement and each person, if any,
who controls the Issuer or the Guarantor within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Issuer and the Guarantor
to such Underwriter, but only with reference to information relating to
such Underwriter furnished to the Issuer or the Guarantor in writing by
such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus related to the Securities, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to Section 7(a) or 7(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx, in the case of parties indemnified pursuant to
Section 7(a), and by the Guarantor, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
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16
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 7(a) hereof in respect of such action
or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees
and expenses of not more than one separate firm (in addition to any local
counsel) for Xxxxxx Xxxxxxx in its capacity as a "qualified independent
underwriter" and all persons, if any, who control Xxxxxx Xxxxxxx within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuer and the Guarantor on
the one hand and the Underwriters on the other hand from the offering of
the Securities or (ii) if the allocation provided by clause 7(d)(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 7(d)(i)
above but also the relative fault of the Issuer and the Guarantor on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer and the Guarantor on the one
hand and the Underwriters on the other hand in connection with the
offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities
(before deducting expenses) received by the Issuer and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate Public Offering Price of the Notes. The relative fault
of the Issuer and the Guarantor on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Issuer or the Guarantor or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
principal amounts of Notes they have purchased hereunder, and not joint.
(e) The Issuer and the Guarantor and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 7(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
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17
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 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Issuer and the Guarantor contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf
of the Issuer or the Guarantor, its officers or directors or any person
controlling the Issuer or the Guarantor and (iii) acceptance of and
payment for any of the Notes.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Guarantor, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Issuer or
the Guarantor shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New
York State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and
(b) in the case of any of the events specified in clauses 8(a)(i) through
8(a)(iv), such event, singly or together with any other such event, makes
it, in your judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Notes that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Notes which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the
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aggregate principal amount of the Notes to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that
the principal amount of Notes set forth opposite their respective names
in Schedule I bears to the principal amount of Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Notes which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal
amount of Notes that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such principal amount of Notes without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be
purchased on such date, and arrangements satisfactory to you and the
Guarantor for the purchase of such Securities are not made within 36
hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Issuer or
the Guarantor. In any such case either you or the Guarantor shall have
the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Issuer or the
Guarantor to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Issuer or the Guarantor shall be
unable to perform their respective obligations under this Agreement, the
Issuer and the Guarantor will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees
and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering
contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
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12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
Scotsman Industries, Inc.
By: _________________________
Name:
Title:
Scotsman Group Inc.
By: _________________________
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
First Chicago Capital Markets, Inc.
Acting on behalf of itself and
the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: ______________________________________
Name:
Title:
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20
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES TO BE
UNDERWRITER PURCHASED
-------------------------------------- -------------------------
Xxxxxx Xxxxxxx & Co. Incorporated
First Chicago Capital Markets, Inc.
[NAMES OF OTHER UNDERWRITERS]...
-------------------
Total: ..................... $
===================
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