EXHIBIT 1
CII TECHNOLOGIES INC.
3,500,000 Shares/*/
Common Stock
UNDERWRITING AGREEMENT
November ___, 1996
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXX LLC
As Representatives of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory. CII Technologies Inc. (the "Company"), a
Delaware corporation, proposes to issue and sell 3,500,000 shares of its
authorized but unissued Common Stock $0.01 par value per share ("Common Stock")
to the several underwriters named in Schedule A as it may be amended by the
Pricing Agreement hereinafter defined ("Underwriters"), who are acting severally
and not jointly. Such total of 3,500,000 shares of Common Stock proposed to be
sold by the Company is hereinafter referred to as the "Firm Shares." In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to 525,000 additional shares of Common Stock ("Option Shares") as
provided in Section 4 hereof. The Firm Shares and, to the extent such option is
exercised, the Option Shares, are hereinafter collectively referred to as the
"Shares."
You have advised the Company that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and Xxxxxxx Xxxxx & Company, L.L.C. and Xxxxxx Xxxx
LLC (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 and the
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by 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 hereby confirms its agreements with the Underwriters as
follows:
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/*/Plus an option to acquire from the Company up to 525,000 additional shares to
cover overallotments.
Section 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-08397) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" all references herein
to specific rules are rules promulgated under the 1933 Act); the Company
has so prepared and has filed such amendments thereto, if any, and such
amended preliminary prospectuses as may have been required to the date
hereof and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. There have been or will
promptly be delivered to you three signed copies of such registration
statement and amendments, three copies of each exhibit filed therewith, and
conformed copies of such registration statement and amendments (but without
exhibits) and of the related preliminary prospectus or prospectuses and
final forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it
becomes effective and the prospectus constituting a part thereof (including
the information, if any, deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A(b) and/or Rule 434(d)), as
from time to time amended or supplemented, 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 for use in connection with the offering of the Shares which differs
from the Prospectus on file at the Commission at the time the Registration
Statement became or becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b)),
the term "Prospectus" shall refer to such revised prospectus from and after
the time it was provided to the Underwriters for such use. If the Company
elects to rely on Rule 434 of the 1933 Act, all references to "Prospectus"
shall be deemed to include, without limitation, the form of prospectus and
the term sheet, taken together, provided to the Underwriters by the Company
in accordance with Rule 434 of the 1933 Act (the "Rule 434 Prospectus").
Any registration statement (including any amendment or supplement thereto
or information which is deemed to be a part thereof) filed by the Company
under Rule 462(b) (the "Rule 462(b) Registration Statement") shall be
deemed to be part of the "Registration Statement" as defined herein, and
any prospectus (including any amendment or supplement thereto or
information which is deemed a part thereof) included in such registration
statement shall be deemed to be a part of the "Prospectus" as defined
herein, as appropriate. The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the "Exchange Act."
(b) The Commission has not issued any order preventing or suspending
the use of the preliminary prospectus dated October 9, 1996, and such
preliminary prospectus conformed in all material respects with the
requirements of the 1933 Act and, as of its date, did not include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading; and when the
Registration Statement became or becomes effective, and at all times
subsequent thereto, up to the First Closing Date or the Second Closing Date
hereinafter defined, as the case may be, the Registration Statement,
including the information deemed to be part of the Registration Statement
at the time of effectiveness pursuant to Rule 430A(b) or Rule 434(d), if
applicable, and the Prospectus and any amendments or supplements thereto,
contained or will contain all statements that are required to be stated
therein in accordance with the 1933 Act and in all material
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respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus contained in the Registration Statement as of its effective
date, nor any amendment or supplement thereto, included or will include any
untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company
makes no representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in the preparation thereof.
(c) Communications Instruments, Inc., a North Carolina corporation
("CII"), and Kilovac Corporation, a California corporation ("Kilovac,"
together with CII, the "Subsidiaries"), constitute the Company's only
"significant subsidiaries" (as such term is defined in Rule 405 of
Regulation C under the 1933 Act).
(d) The Company and the Subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective places of incorporation, with corporate power and
authority to own their properties and conduct their business as described
in the Prospectus; the Company and the Subsidiaries are duly qualified to
do business as foreign corporations under the corporation law of, and are
in good standing as such in, each jurisdiction in which such qualification
is required except in any such case where the failure to so qualify or be
in good standing would not have a material adverse effect upon the Company
and the Subsidiaries taken as a whole; and no proceeding of which the
Company has knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
(e) Upon consummation of the Kilovac Share Exchange (as described in
the Registration Statement), the Company will own directly or indirectly
100 percent of the issued and outstanding capital stock of the Subsidiaries
and all of such capital stock has been duly authorized and validly issued
and is fully paid and nonassessable. Except for the pledge of such shares
to secure the Company's senior credit facility as disclosed in the
Registration Statement, upon consummation of the Kilovac Share Exchange the
Company will own all of the issued and outstanding capital stock of the
Subsidiaries free and clear of any claims, liens, encumbrances or security
interests.
(f) As of the date hereof, the Company's authorized capital stock
consists of 25,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, of which 1,020,000 shares of Common Stock, and 80,000
shares of Preferred Stock are issued and outstanding. As of the First
Closing Date (as defined in Section 4), the issued and outstanding shares
of capital stock of the Company as set forth in the Prospectus will have
been duly authorized and validly issued, will be fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus.
(g) The Shares to be sold by the Company have been duly authorized and
when issued, delivered and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and will conform to the
description thereof contained in the Prospectus.
(h) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any
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provision of the Company's charter or bylaws and will not result in the
breach, or be in contravention, of any provision of any agreement,
franchise, license, indenture, mortgage, deed of trust, or other instrument
to which the Company or either of the Subsidiaries are a party or by which
the Company, either of the Subsidiaries or the property of any of them may
be bound or affected, or any order, rule or regulation applicable to the
Company or either of the Subsidiaries of any court or regulatory body,
administrative agency or other governmental body applicable to the Company
or either of the Subsidiaries or any of their respective properties, or any
order of any court or governmental agency or authority entered in any
proceeding to which the Company or either of the Subsidiaries were or are
now a party or by which any of them are bound, except, in any such case,
for such breaches or contraventions which would not have a material adverse
effect on the Company and the Subsidiaries taken as a whole. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the Pricing Agreement or the
consummation of the transactions contemplated herein or therein, except for
compliance with the 1933 Act and blue sky laws applicable to the public
offering of the Shares by the several Underwriters and clearance of such
offering with the National Association of Securities Dealers, Inc.
("NASD"). This Agreement has been duly executed and delivered by the
Company.
(i) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the
Registration Statement are independent accountants with respect to the
Company and Kilovac as required by the 1933 Act.
(j) The consolidated financial statements and schedules of the
Company, Kilovac and their respective subsidiaries included in the
Registration Statement present fairly the consolidated financial position
of the Company, Kilovac and their respective subsidiaries as of the
respective dates of such financial statements, and the consolidated results
of operations and cash flows of the Company, Kilovac and their respective
subsidiaries for the respective periods covered thereby, all in conformity
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed in the Prospectus, and
the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. The financial
information set forth in the Prospectus under "Selected Consolidated
Financial Information" presents fairly, on the basis stated in the
Prospectus, the information set forth therein.
The financial statements of the Xxxxxxx Electrical Manufacturing
Division of Figgie International, Inc. ("Xxxxxxx") included in the
Registration Statement present fairly the consolidated financial position
of Xxxxxxx as of the respective dates of such financial statements, and the
results of operations and cash flows of Xxxxxxx for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed in the Prospectus.
The pro forma financial statements and other pro forma financial
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and other pro
forma information, have been properly compiled on the pro forma bases
described therein, and in the opinion of the Company, 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.
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(k) Neither the Company nor either of the Subsidiaries is in violation
of its charter or in default under any consent decree, or in default with
respect to any material provision of any lease, loan agreement, franchise,
license, permit or other contract obligation to which it is a party, in
each case, except for defaults which neither singly nor in the aggregate
are material to the Company and the Subsidiaries taken as a whole; and
there does not exist any state of facts which constitutes an event of
default as defined in such documents or which, with notice or lapse of time
or both, would constitute such an event of default, in each case, except
for defaults which neither singly nor in the aggregate are material to the
Company and the Subsidiaries taken as a whole.
(l) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company or either of
the Subsidiaries is or may be a party or of which material property owned
or leased by the Company or either of the Subsidiaries is or may be the
subject, or related to environmental or discrimination matters which are
not disclosed in the Prospectus, or which question the validity of this
Agreement or the Pricing Agreement or any action taken or to be taken
pursuant hereto or thereto.
(m) There are no holders of securities of the Company having rights to
registration thereof or preemptive rights to purchase Common Stock except
as disclosed in the Prospectus. Holders of registration rights have waived
such rights with respect to the offering being made by the Prospectus.
(n) The Company and the Subsidiaries have good and marketable title to
all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements or in the notes to
such financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and the Subsidiaries taken as a whole, or liens for
taxes not yet due and payable. The Company and each of the Subsidiaries
hold their respective leased properties which are material to the Company
and the Subsidiaries taken as a whole under valid and binding leases.
(o) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and the Subsidiaries, taken as
a whole, have not incurred any material liabilities or obligations, direct
or contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material adverse
change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, short-term debt or long-
term debt.
(q) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options), for
a period of 365 days after this Agreement becomes effective without the
prior written consent of the Representatives, except that (i) the Company
may grant stock options and issue Common Stock pursuant to the Company's
existing stock option plan, provided that the shares of Common Stock issued
upon exercise of such
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options shall be subject to the restrictions of this subsection (q) until
the expiration of such 365 day period, and (ii) the Company may issue
Common Stock in connection with the acquisition of businesses, companies or
assets, so long as the recipients of such shares agree to adhere to the
restrictions of this subsection (q) until the expiration of such 365 day
period. The Company has obtained, or will obtain similar agreements from
each stockholder, director and executive officer of the Company as required
by Section 7(f)(v) of this Agreement.
(r) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(s) The Company together with the Subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all patents, trademarks, copyrights and other proprietary rights
("Trade Rights") material to the business of the Company and the
Subsidiaries taken as a whole. Neither the Company nor either of the
Subsidiaries has received any notice of infringement, misappropriation or
conflict from any third party as to such material Trade Rights which has
not been resolved or disposed of and neither the Company nor either of the
Subsidiaries has any knowledge of having infringed, misappropriated or
otherwise conflicted with material Trade Rights of any third parties, which
infringement, misappropriation or conflict would have a material adverse
effect upon the condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries taken as a whole.
(t) The conduct of the business of the Company and the Subsidiaries is
in compliance in all respects with applicable federal, state, local and
foreign laws and regulations, except where the failure to be in compliance
would not have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries
taken as a whole.
(u) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the registration
requirements of the 1933 Act and have been duly registered with or the
subject of an available exemption from the registration requirements of the
applicable state securities or blue sky laws.
(v) The Company has filed all necessary federal and state income and
material franchise tax returns (other than those filings being contested in
good faith) and has paid all taxes shown as due thereon, and, except as
disclosed in the Prospectus, there is no tax deficiency that has been, or
to the knowledge of the Company might be, asserted against the Company or
either of the Subsidiaries or any of their properties or assets that would
or could be expected to have a material adverse affect upon the condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole.
(w) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock thereunder, has
filed an application to list the Shares on the Nasdaq National Market, and
has received notification that the listing has been approved, subject to
notice of issuance or sale of the Shares, as the case may be.
(x) The Company is not, and does not intend to conduct its business in
a manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended ("Investment
Company Act").
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(y) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of Doing Business with Cuba, and the
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Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
Section 3. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
Section 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase from the Company 3,500,000 Firm Shares at the price
per share set forth in the Pricing Agreement. The obligation of each
Underwriter to the Company shall be to purchase from the Company that number of
full shares which (as nearly as practicable, as determined by you) bears to
3,500,000 the same proportion as the number of Shares set forth opposite the
name of such Underwriter in Schedule A hereto bears to the total number of Firm
Shares to be purchased by all Underwriters under this Agreement. The initial
public offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 11 hereof) following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
fourth business day, if permitted under Rule 15c6-1 under the Exchange Act (or
the third business day if required under Rule 15c6-1 under the Exchange Act)
after 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, the Company will deliver to you at the offices of counsel for the
Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by them, respectively, against payment of the purchase price therefor
by certified or bank cashier's checks, or wire transfer of immediately available
funds, payable to the order of the Company. Such time of delivery and payment
is herein referred to as the "First Closing Date." The certificates for the Firm
Shares so to be delivered will be in such denominations and registered in such
names as you request by notice to the Company prior to 10:00 A.M., Chicago Time,
on the third full business day preceding the First Closing Date, and will be
made available at the Company's expense for checking and packaging by Xxxxxxx
Xxxxx & Company, L.L.C. at 10:00 A.M., Chicago Time, on the first full business
day preceding the First Closing Date. Payment for the Firm Shares so to be
delivered shall be made at the time and in the manner described above at the
offices of counsel for the Underwriters.
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In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 525,000 Option Shares, at the
same purchase price per share to be paid for the Firm Shares, for use solely in
covering any overallotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be
purchased by each Underwriter shall be determined by multiplying the number of
Option Shares to be sold by the Company pursuant to such notice of exercise by a
fraction, the numerator of which is the number of Firm Shares to be purchased by
such Underwriter as set forth opposite its name in Schedule A and the
denominator of which is the total number of Firm Shares (subject to such
adjustments to eliminate any fractional share purchases as you in your absolute
discretion may make). Certificates for the Option Shares will be made available
at the Company's expense for checking and packaging at 10:00 A.M., Chicago Time,
on the first full business day preceding the Second Closing Date. The manner of
payment for and delivery of the Option Shares shall be the same as for the Firm
Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
Section 5. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any post-
effective amendment) or any Rule 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 Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434) and
will furnish you 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 you or counsel for the Underwriters shall reasonably
object.
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(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements or
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriter with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) Neither the Company nor either of the Subsidiaries will acquire
any capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option, nor will the
Company declare or pay any dividend or make any other distribution upon the
Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(f) The Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of at
least 12 months beginning after the effective date of the Registration
Statement, which will satisfy the provisions of the last paragraph of
Section 11(a) of the 1933 Act and Rule 158 thereunder.
(g) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (b) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the
purposes contemplated by the 1933 Act.
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(h) The Company will cooperate with the Underwriters to qualify or
register the Shares for sale under the blue sky laws of such jurisdictions
as you designate, and will continue such qualifications in effect so long
as reasonably required for the distribution of the Shares. The Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is
not currently qualified or where it would be subject to taxation as a
foreign corporation.
(i) During the period of five years hereafter, provided that the
Common Stock remains registered pursuant to the Exchange Act, the Company
will furnish you and, if so requested by any other Underwriter, each such
requesting Underwriter with a copy (i) as soon as practicable after the
filing thereof, of each report filed by the Company with the Commission,
any securities exchange or the NASD; (ii) as soon as practicable after the
release thereof, of each material press release in respect of the Company;
and (iii) as soon as available, of each report of the Company mailed to
stockholders.
(j) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(k) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution and delivery
of the Pricing Agreement, the Company will prepare, and file or transmit
for filing with the Commission in accordance with such Rule 430A, Rule
424(b) and/or Rule 434, as the case may be, copies of an amended prospectus
or term sheet, as the case may be, or, if required by such Rule 430A or
Rule 434, as the case may be, a post-effective amendment to the
Registration Statement (including an amended prospectus), containing all
information so omitted. If required, the Company will prepare and file, or
transmit for filing, a Rule 462(b) Registration Statement not later than
the date of the execution of the Pricing Agreement. If a 462(b)
Registration Statement is filed, the Company shall make payment of, or
arrange for payment of, the additional registration fee owing to the
Commission required by Rule 111.
(l) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market
and will file with the Commission in a timely manner all reports on Form SR
required by Rule 463 and will furnish you copies of any such reports as
soon as practicable after the filing thereof.
Section 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters, the costs and expenses of the Underwriters, any transfer taxes on
the Shares which they may sell and the expenses of advertising any offering of
the Shares made by the Underwriters) incurred in connection with the performance
of the Company's obligations hereunder, including without limiting the
generality of the foregoing, all fees and expenses of legal counsel for the
Company and of the Company's independent accountants, all costs and expenses
incurred in connection with the preparation, printing, filing and distribution
of the Registration Statement, each preliminary prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, this Agreement, the Pricing Agreement and the
Blue Sky Memorandum, (ii) all costs, fees and expenses (including legal fees not
to exceed $15,000 and disbursements of counsel for the Underwriters) incurred by
the Underwriters in connection with qualifying or registering all or any part of
the Shares for offer and sale under blue sky laws, including the
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preparation of a blue sky memorandum relating to the Shares, and clearance of
such offering with the NASD; and (iii) all fees and expenses of the Company's
transfer agent, printing of the certificates for the Shares and all transfer
taxes, if any, with respect to the sale and delivery of the Shares to the
several Underwriters.
Section 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A and/or Rule
434, the information concerning the initial public offering price of the
Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representatives
of such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall provide evidence of such filing and effectiveness in accordance with
Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting
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particularly the business or properties of the Company or either of the
Subsidiaries, otherwise than as described in the Prospectus, the effect of
which is, in the judgment of the Representatives, so material and adverse
as to make it impractical or inadvisable to proceed with the public
offering or purchase of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Company
(or XxXxxxx, Wood and Xxxxxxxx P.A. regarding the matters referenced
in paragraphs (2) and (3) below), addressed to the Underwriters and
dated the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of
the State of Delaware and has full corporate power and authority
to conduct its business as described in the Prospectus;
(2) CII has been duly incorporated and is validly existing and
in good standing under the laws of the State of North Carolina,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and CII has
been duly qualified to do business as a foreign corporation under
the corporation laws of, and is in good standing as such in, the
states of Ohio and Texas; all actions and documents necessary to
consummate the merger of Kilovac with and into CII in accordance
with all requirements of North Carolina law have been duly taken
and appropriately filed with the North Carolina Secretary of
State, and upon issuance of the proper certificate or other
document by such North Carolina Secretary of State, such merger
will have been consummated in accordance with North Carolina law;
(3) all of the issued and outstanding capital stock of CII has
been duly authorized, validly issued and is fully paid and
nonassessable, and, except for the pledge of such shares to secure
the Company's senior credit facility as disclosed in the
Registration Statement, to the knowledge of such counsel, the
Company owns directly or indirectly 100 percent of the outstanding
capital stock of CII and such stock is owned free and clear of any
claims, liens, encumbrances or security interests;
(4) the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable;
(5) the form of the certificate for the Shares to be delivered
hereunder is in due and proper form, and when the certificates for
the Shares are duly countersigned by the Company's transfer agent
and delivered to you or upon your order against payment of the
agreed consideration therefor in accordance with the provisions of
this Agreement and the Pricing Agreement, the Shares represented
thereby will be duly authorized and validly issued, fully paid and
nonassessable;
-12-
(6) the Registration Statement has become effective under the
1933 Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been
instituted or threatened by the Commission, and the Registration
Statement as of its effective date, and the Prospectus, as of
November ___, 1996 (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion), comply as to form in all
material respects with the requirements of the 1933 Act;
(7) such counsel does not know of any legal or governmental
proceedings pending or threatened which are required to be
described in the Prospectus which are not described as required,
nor of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described or filed, as required;
(8) the statements under the captions "Description of Capital
Stock" and "Shares Eligible for Future Sale" in the Prospectus,
insofar as such statements purport to constitute a summary of
documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material
respects, the information called for with respect to such
documents and matters;
(9) this Agreement and the Pricing Agreement (and the
performance of the Company's obligations hereunder) have been duly
authorized by the Company, and this Agreement and the Pricing
Agreement have been duly executed and delivered by the Company,
and assuming due authorization, execution and delivery by the
Representatives on behalf of the Underwriters, constitute a valid
and legally binding obligation of the Company and no consent,
approval, authorization, order, registration or qualification of
or with any federal or New York governmental agency or body or any
Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to such counsel's knowledge,
any federal or New York court or any Delaware court acting
pursuant to the Delaware General Corporation Law, is necessary in
connection with the issue and sale of the Shares by the Company
pursuant to this Agreement (except for the registration under the
1933 Act of the Shares, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters) or
the performance by the Company of its obligations hereunder;
(10) the execution and performance by the Company of this
Agreement will not result in a breach or default under, any
agreement, franchise, license, indenture, mortgage, deed of trust,
or other instrument filed as an exhibit to the Registration
Statement, or violate any of the provisions of the charter or
bylaws of the Company, or violate the Delaware General Corporate
Law, or any federal or New York statute, rule or regulation, or,
so far as is known to such counsel, any order issued by a court or
governmental agency or body having jurisdiction over the Company
or either of the Subsidiaries pursuant to the Delaware General
Corporate law, or any federal or New York statute, rule or
regulation;
-13-
(11) the Company is not an "investment company" within the
meaning of, and subject to regulation under, the Investment
Company Act; and
(12) to such counsel's knowledge, all offers and sales of the
capital stock of the Company since April 29, 1993 were exempt from
the registration requirements of the 1933 Act.
In rendering such opinion, such counsel may state that they
are relying upon the certificate of First Union National Bank of North
Carolina, the transfer agent for the Common Stock, as to the number of
shares of Common Stock at any time or times outstanding, and that
insofar as the statements made pursuant to the next paragraph relate
to the accuracy and completeness of the Prospectus and Registration
Statement, it is based upon a general review with the Company's
representatives and independent accountants of the information
contained therein, without independent verification by such counsel of
the accuracy or completeness of such information. Such counsel may
also rely upon the opinions of other competent counsel and, as to
factual matters, on certificates and of officers of the Company and of
state officials, in which case their opinion is to state that they are
so doing and copies of said opinions or certificates are to be
attached to the opinion unless said opinions or certificates (or, in
the case of certificates, the information therein) have been furnished
to the Representatives in other form.
(i) Such counsel shall also have furnished to you, as
Representatives of the Underwriters, a written statement, addressed to
the Underwriters and dated the First Closing Date or Second Closing
Date, as the case may be, to the effect that such counsel has no
reason to believe that the Registration Statement at its effective
date contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in
order to make the statements contained therein not misleading, or that
the Prospectus as of its issue date or the date of such opinion
includes or included any untrue statement of a material fact or omits
or omitted to state a material fact necessary to make the statements
therein not misleading in light of the circumstances under which they
were made (it being understood that such counsel need not express any
belief with respect to the financial statements, schedules and other
financial and statistical data included in the Registration Statement
or the Prospectus);
(ii) Such opinion or opinions of Xxxxxxx, Carton & Xxxxxxx,
counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the Shares to be sold by
the Company, the Registration Statement and the Prospectus and other
related matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have exhibited
to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or the
Second Closing Date, as the case may be,
-14-
and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued, which order remains in
effect; and to the best knowledge of the respective signers, no
proceedings for that purpose have been instituted or are pending
or contemplated under the 1933 Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(iv) At the time the Pricing Agreement is executed and also on the
First Closing Date or the Second Closing Date, as the case may be,
there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Deloitte & Touche LLP,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule B. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(v) At the time the Pricing Agreement is executed, there shall be
delivered to you a letter from each individual, entity, stockholder,
director and executive officer of the Company identified in Schedule C
hereto, in which each such person agrees not to sell, contract to sell
or otherwise dispose of any Common Stock or securities convertible
into Common Stock (including Common Stock issued pursuant to currently
outstanding options) for a period of 365 days after the date of such
letter without the prior written consent of the Representatives.
(vi) Such further certificates and documents as you may reasonably
request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to
you and to Xxxxxxx, Carton & Xxxxxxx, counsel for the Underwriters,
which approval shall not be unreasonably withheld. The Company shall
furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request.
(g) Prior to, or simultaneous with, the First Closing Date, the
"Kilovac Share Exchange" (as described in the Prospectus) shall have been
consummated by the Company and each shareholder of Kilovac.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the
-15-
Company without liability on the part of any Underwriter or the Company, except
for the expenses to be paid or reimbursed by the Company pursuant to Sections 6
and 8 hereof and except to the extent provided in Section 10 hereof.
Section 8. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you and the other Underwriters upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by you and them in connection with the proposed purchase and
the sale of the Shares. Any such termination shall be without liability of any
party to any other party except that the provisions of this Section, Section 6
and Section 10 shall at all times be effective and shall apply.
Section 9. Effectiveness of Registration Statement. You and the Company
will use your and its best efforts to cause the Registration Statement to become
effective, if it has not yet become effective, and to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting thereof.
Section 10. 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 the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, including the information deemed
to be part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and/or Rule 434(d), if applicable, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus, as then
amended or supplemented, to such person at or prior to the confirmation of the
sale of such Shares in any case where such delivery is required by the 1933 Act.
In addition to its other obligations under this Section 10(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 10(a), it will reimburse the Underwriters on a monthly
-16-
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, and each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, against any losses, claims,
damages or liabilities to which the Company, or any such director, officer or
controlling person may become subject under the 1933 Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through the Representatives specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by
the Company, or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 10(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 10(b), they will reimburse the Company on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying parties similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying parties
may have conflicting interests which would make it inappropriate for the same
counsel to represent both of them, the indemnified party
-17-
or parties shall have the right to select separate counsel to assume such legal
defense and otherwise to participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defense in accordance
with the proviso to the preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party (which consent shall
not be unreasonably withheld), 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 arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, 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 Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportion in the case of the
Company, as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or
-18-
omission or alleged omission. 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. The Underwriters' obligations to contribute pursuant to this
Section are several in proportion to their respective underwriting commitments
and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
Section 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Shares hereunder on the First Closing Date or the Second
Closing Date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10
percent of the total number of Shares which the Underwriters are obligated to
purchase on the First Closing Date or the Second Closing Date, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Shares by other persons, including any of the Underwriters, but
if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Shares which such defaulting Underwriters agreed but
failed to purchase on such date. If any Underwriter or Underwriters so default
and the aggregate number of Shares with respect to which such default or
defaults occur is more than the above percentage and arrangements satisfactory
to the Representatives and the Company for the purchase of such Shares by other
persons or by the nondefaulting Underwriters are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company, except for the expenses to be paid by
the Company pursuant to Section 6 hereof and except to the extent provided in
Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
Section 12. Effective Date. This Agreement shall become effective at
10:00 A.M. Chicago Time, on the day upon which the Pricing Agreement is executed
and delivered, unless such a day is a Saturday, Sunday or holiday (and in that
event this Agreement shall become effective at such hour on the business day
next succeeding such Saturday, Sunday or holiday).
Section 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Sections 6 or 8 hereof and except to the extent provided in Section 10
hereof) or of any Underwriter to the Company.
-19-
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions which,
in the reasonable opinion of the Representatives, either renders it
impracticable or inadvisable to proceed with the offering and sale of the
Shares on the terms set forth in the Prospectus or materially and adversely
affects the market for the Shares, or (iv) there shall have been an
outbreak of major armed hostilities between the United States and any
foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Shares. Any termination
pursuant to this paragraph (b) shall be without liability on the part of
any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed pursuant to
Sections 6 or 8 hereof and except to the extent provided in Section 10
hereof).
Section 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder.
Section 15. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, with a copy to Xxxxx X. Reed, Gardner, Carton & Xxxxxxx, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; if sent to the Company will be
mailed, delivered or telegraphed and confirmed to the Company at its corporate
headquarters with a copy to Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000.
Section 16. Successors. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section 10,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
Section 17. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters. Any action under or in respect of this
Agreement taken by Xxxxxxx Xxxxx & Company, L.L.C. will be binding upon the
other Representative.
Section 18. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
Section 19. Applicable Law. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
-20-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
CII TECHNOLOGIES INC.
By:
_________________________
Its:
_________________________
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXX LLC
Acting as Representatives of the
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
___________________________
Partner
-21-
SCHEDULE A
NUMBER OF FIRM
SHARES TO BE
PURCHASED
UNDERWRITER
Xxxxxxx Xxxxx & Company, L.L.C........................
Xxxxxx Xxxx LLC.......................................
---------
TOTAL 3,500,000
=========
-22-
SCHEDULE B
COMFORT LETTER OF DELOITTE & TOUCHE LLP
(1) They are independent public accountants with respect to the
Company, the Subsidiaries and Xxxxxxx within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and the Subsidiaries included in the Registration
Statement and the consolidated financial statements of the Company from which
the information presented under the caption "Selected Consolidated Financial
Information" has been derived which are stated therein to have been examined by
them comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act.
(3) In their opinion the financial statements of Xxxxxxx included in
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act.
(4) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and the Subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1995, a reading of minutes of meetings of the stockholders and directors of the
Company and the Subsidiaries since December 31, 1995, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
the Subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the historical amounts in "Selected Consolidated Financial
Information" and "Summary Consolidated Financial Data" as of, and for the fiscal
period ended March 31, 1992, the nine months ended December 31, 1992, the period
from January 1, 1993 to May 10, 1993, the period from May 11, 1993 to December
31, 1993, the fiscal period ended December 31, 1994 and the fiscal period ended
December 31, 1995 do not agree with or are not derivable from the corresponding
amounts in the audited consolidated financial statements from which such amounts
were derived, (ii) the historical amounts in "Selected Consolidated Financial
Information" and "Summary Consolidated Financial Data" as of, and for each of
the fiscal periods ended on July 2, 1995 and June 30, 1996 do not agree with or
are not derivable from the corresponding amounts in the unaudited consolidated
financial statements from which such amounts were derived; (iii) the unaudited
consolidated financial statements of the Company and the Subsidiaries and the
unaudited financial statements of Xxxxxxx included in the Registration Statement
do not comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or that such unaudited financial statements are not
fairly presented in accordance with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement; (iv) the unaudited pro forma
data included under the captions "Summary Consolidated Financial Data,"
"Selected Consolidated Financial Information" and "Pro Forma Condensed
Consolidated Financial Information" in the Registration Statement (such pro
forma data are herein referred to collectively as the "Unaudited Pro Forma
Data") do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such Unaudited Pro Forma Data; and (v) at a specified date not
more than five days prior to the date thereof in the case of the first letter
and not more than two business days prior to the date thereof in the case of the
second and third letters, there was any change in the capital stock or long-term
debt or short-term debt (other than normal payments) of the Company and the
Subsidiaries on a consolidated basis or any decrease in consolidated net current
assets or consolidated stockholders' equity as compared with amounts shown on
the latest unaudited balance sheet of the Company included
-23-
in the Registration Statement or for the period from the date of such balance
sheet to a date not more than five days prior to the date thereof in the case of
the first letter and not more than two business days prior to the date thereof
in the case of the second and third letters, there were any decreases, as
compared with the corresponding period of the prior year, in consolidated net
sales, consolidated income before income taxes or in the total or per share
amounts of consolidated net income except, in all instances, for changes or
decreases which the Prospectus discloses have occurred or may occur or which are
set forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and the Subsidiaries.
-24-
SCHEDULE C
LOCKUP AGREEMENTS
NUMBER OF
SHARES
SUBJECT TO
LOCK-UP
NAME OF STOCKHOLDER AGREEMENT
CII Associates, L.P. 2,150,000
Xxxxx X. Xxxxxxx 75,000
Xxxxxxx X. Xxxxxxxxx 75,000
G. Xxxxxx Xxxxxx 100,000
Xxxxx Xxxxxxx 25,000
Xxxx X. Xxxxxxxx 75,000
Xxxxxx X. Xxxxxxx ______
Xxxxxxxx Xxxxxxxx 12,500
Xxxx X. XxXxxx 4,165
Xxxxxxx X. Xxxxx 4,165
Xxxxxxx XxXxxxxxx 4,170
Xxxx Xxxxxx 25,000
Xxxx Xxxxxxxxxxx [180]
Xxxxxxx Xxxxxxxx [144,251]
Xxxxxxx Xxxxxxxx (trustee of Xxxxxxxx
Charitable Remainder Unitrust) [25,243]
Xxxx Xxxxxx [1,435]
Xxxx Xxxxxxx [7,212]
Xxxx Xxxxx (trustee of the Xxxx [2,715]
Xxxxxxxx Trust)
Xxxxx Xxxxxxxx [1,442]
Xxxxxx Xxxxxx [32,455]
Xxxxx Xxxxxxxxxxxxx [7,753]
Xxxxxx Xxxxxxxxxxxx (trustee of the
Xxxxxx X.
Xxxxxxxx Charitable Unitrust) [27,569]
Xxx XxXxxxxxxx [28,849]
Xxx XxXxxxxxx [46,880]
Xxxxx Xxxxx Xxxxxxxx Xxxx [2,621]
Xxxx Xxxxx [4,543]
Xxxx Xxxxxxx [5,247]
Xxxx Xxx [1,377]
TOTALS
===========
__________ shares
[Final share numbers for Kilovac stockholders to be recalculated to reflect
final offering price.]
-25-
EXHIBIT A
CII TECHNOLOGIES INC.
3,500,000 Shares
Common Stock*
PRICING AGREEMENT
_____________, 1996
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXX LLC
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated __________, 1996 (the
"Underwriting Agreement") relating to the sale by the Company and the purchase
by the several Underwriters for whom Xxxxxxx Xxxxx & Company, L.L.C. and Xxxxxx
Xxxx LLC are acting as representatives (the "Representatives"), of the above
Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees with
the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares 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.
Schedule A is amended as follows:
______________________________
*Plus an option to acquire up to 525,000 additional shares to cover
overallotments.
-26-
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters,
including you, all in accordance with its terms.
Very truly yours,
CII TECHNOLOGIES INC.
By:
_________________________
Its:
_________________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXX XXXX LLC
Acting as Representatives of the
several Underwriters
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
______________________
Partner
-27-
