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Exhibit 1.1
MAZEL STORES, INC.
2,145,000 Shares Common Stock(1)
UNDERWRITING AGREEMENT
_____________, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Salomon Brothers Inc
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. Mazel Stores, Inc., an Ohio corporation
("Company"), has an authorized capital stock consisting of 2,000,000 shares of
Preferred Stock, no par value per share, of which no shares will be outstanding
as of the First Closing Date hereinafter defined, and 14,000,000 shares of
Common Stock, no par value per share ("Common Stock"), of which ________ shares
will be outstanding as of such date. The Company proposes to issue and sell
2,145,000 shares of its authorized but unissued Common Stock ("Firm Shares") 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. In addition, the Company proposes to grant to the Underwriters an
option to purchase up to 321,750 additional shares of Common Stock ("Option
Shares") as provided in Section 5 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 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
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1 Plus an option to acquire up to 321,750 additional shares to cover
over-allotments.
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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:
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. 333-11739)
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;" unless
indicated to the contrary, all references herein to specific rules are
rules promulgated under the 0000 Xxx); and 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 the Representatives three signed copies of
such registration statement and amendments, three copies of each
exhibit filed therewith, and, for each of the Underwriters, conformed
copies of such registration statement and amendments (but without
exhibits) and of the related preliminary prospectus or prospectuses and
final forms of prospectus.
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
thereof pursuant to Rule 430A(b) and/or Rule 434), 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 ("Rule 434 Prospectus"). Any
registration statement (including any amendment or supplement thereto
or information which is a deemed part thereof) filed by the Company
under Rule 462(b) ("Rule 462(b) Registration Statement") shall be
deemed to be part of the
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"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 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 any preliminary prospectus, and each preliminary
prospectus has conformed in all material respects with the requirements
of the 1933 Act and, as of its date, has not included any untrue
statement of a material fact or omitted 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), 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 respects conformed or will in all material respects
conform to the requirements of the 1933 Act, and neither the
Registration Statement nor the Prospectus, 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) The Company and its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective places of incorporation, with the
corporate power and authority to own their properties and conduct their
business as described in the Prospectus; the Company and each of its
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 they own or lease properties, have an office, or
in which business is conducted and 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 condition
(financial or otherwise), business, assets, results of operations or
prospects of the Company and its subsidiaries taken as a whole; or upon
the Company's ability to perform its obligations under this Agreement
or the transactions contemplated hereby (a "Material Adverse Effect");
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
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power and authority or qualification. All references herein to a
subsidiary of the Company shall mean each corporation, partnership,
limited liability company or other entity in which the Company
beneficially owns, directly or indirectly, capital stock or other
equity interests representing in the aggregate ten percent or more of
the total combined voting power of such entity, specifically including
the entities listed on Exhibit 21 to the Registration Statement.
(d) Except as disclosed in the Registration Statement, the
Company owns, directly or indirectly, 100 percent of the issued and
outstanding capital stock of each of its subsidiaries, free and clear
of any claims, liens, encumbrances or security interests and all of
such capital stock has been duly authorized and validly issued and is
fully paid and nonassessable.
(e) As of the date of this Agreement, the Company has an
authorized and outstanding capitalization as described under the
caption "Capitalization" in the Prospectus. The issued and outstanding
shares of capital stock of the Company as set forth in the Prospectus
have been duly authorized and validly issued, are fully paid and
nonassessable, and conform to the description thereof contained in the
Prospectus; and except as described in the Prospectus, there is no
commitment, plan or arrangement to issue, and no outstanding option,
warrant or other right calling for the issuance of, any share of
capital stock of the Company or any of its subsidiaries; and except as
described in the Prospectus, there is outstanding no security or other
instrument that by its terms is convertible into or exchangeable for
capital stock of the Company or any of its subsidiaries, and there is
no commitment, plan or arrangement to issue such a security or
instrument.
(f) 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.
(g) 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 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
(as hereinafter defined), indenture, mortgage, deed of trust, or other
instrument to which the Company or any subsidiary is a party or by
which the Company, any subsidiary or the property of any of them may be
bound or affected, or any order, rule or regulation applicable to the
Company or any subsidiary of any court (foreign, federal, state, local
or otherwise), arbitration or other alternative dispute forum, foreign,
federal, state, local or other government or governmental department,
agency, board, commission, bureau or instrumentality or other
regulatory authority (collectively, "Governmental Authority") having
jurisdiction over the Company or any subsidiary or any of their
respective
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properties, or any order of any Governmental Authority entered in any
proceeding to which the Company or any subsidiary was or is now a party
or by which it is bound. No consent, approval, authorization or other
order of any Governmental Authority 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 state or province securities 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.
(h) Each of KPMG Peat Marwick LLP and Deloitte & Touche LLP,
who have expressed their respective opinions with respect to certain of
the financial statements and schedules included in the Registration
Statement, are independent accountants as required by the 1933 Act.
(i) The consolidated and combined financial statements of the
Company included in the Registration Statement, including the notes
thereto, present fairly the consolidated or combined financial position
of the Company as of the respective dates of such financial statements,
and the consolidated or combined results of operations and cash flows
of the Company 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 the
captions "Summary Combined Financial and Operating Data" and "Selected
Financial and Operating Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein; and the pro forma
financial statements and other pro forma information included under the
caption "Pro Forma Financial Data" and elsewhere in the Prospectus
present fairly the information shown therein, have been prepared in
accordance with generally accepted accounting principles and 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 basis 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 under the
circumstances.
(j) Neither the Company nor any subsidiary is in violation of
its charter or bylaws or in default under any consent decree, order,
writ, judgment, award or injunction of any Governmental Authority, or
in default with respect to any material provision of any lease, loan
agreement, note, franchise, License (as hereinafter defined), permit,
provider agreement, employer group agreement, third-party payor
agreement, or other contract obligation to which it is a party, except
where violation would not have a Material Adverse Effect; 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
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or both, would constitute such an event of default, in each case,
except for defaults which neither singly nor in the aggregate would
have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole.
(k) There are no material legal or governmental proceedings
pending, or to the Company's knowledge, threatened to which the Company
or any subsidiary is or may be a party or of which material property
owned or leased by the Company or any subsidiary is or may be the
subject, or which are related to environmental or discrimination
matters of a character required to be disclosed in the Prospectus which
are not so disclosed, or which question the validity of this Agreement
or the Pricing Agreement or any action taken or to be taken pursuant
hereto or thereto.
(l) Except as described in the Prospectus, there are no
holders of securities of the Company having rights to registration
thereof, preemptive rights or rights of first refusal to purchase
Common Stock from the Company.
(m) The Company and each of its 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 elsewhere in the Prospectus) or which are not
material to the Company and its subsidiaries taken as a whole. The
Company and each of its subsidiaries hold their respective leased
properties which are material to the Company and its subsidiaries taken
as a whole under valid and binding leases.
(n) 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.
(o) 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 its 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), business,
assets, results of operations or prospects, taken as a whole, nor any
material change in their capital stock, short-term debt or long-term
debt, taken as a whole. Neither the Company nor any of its subsidiaries
has received notice (either formally or informally) of the non-renewal
or anticipated non-renewal of one or more agreements or contracts
currently maintained by the Company or any of its subsidiaries with any
of its customers, which non-renewal(s) would or could be expected to
have a Material Adverse Effect.
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(p) 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.
(q) The Company together with its subsidiaries own and possess
all right, title and interest in and to, or has duly licensed from
third parties a valid, enforceable right to use, all patents, patent
rights, trade secrets, inventions, know-how, trademarks, trade names,
copyrights, service marks and other proprietary rights ("Trade Rights")
material to the business of the Company and each of its subsidiaries
taken as a whole. Neither the Company nor any of its 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 any of its
subsidiaries, to the best knowledge of the Company, has infringed,
misappropriated or otherwise conflicted with material Trade Rights of
any third parties, which infringement, misappropriation or conflict
would have a Material Adverse Effect.
(r) The conduct of the business of Mazel Company, L.P. (the
"Partnership"), the Company and each of the Company's subsidiaries is
and has been at all times in compliance in all respects with applicable
foreign, federal, state, local and other laws and regulations, except
where the failure to be in compliance would not have a Material Adverse
Effect. The Company has no knowledge of, nor has the Company received
notice of, any violation or alleged violation by the Partnership, the
Company or any of the Company's subsidiaries of any such laws or
regulations.
(s) All offers and sales of the Partnership's, the Company's
and each of the Company's subsidiaries' partnership interests, capital
stock or other securities prior to the date hereof were at all relevant
times exempt from the registration requirements of the 1933 Act and
were duly registered with or the subject of an available exemption from
the registration requirements of the applicable state or province
securities laws.
(t) The Company and each of its subsidiaries have filed all
necessary foreign, federal and state income, franchise, value-added,
sales and use tax returns and have paid all taxes shown as due thereon,
and there is no tax deficiency that has been, or to the knowledge of
the Company might be, asserted against the Company, or any of its
subsidiaries, or any of their respective properties or assets that
would or could be expected to have a Material Adverse Effect.
(u) 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.
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(v) The Company and each of its subsidiaries are not, and do
not intend to conduct their respective businesses in a manner in which
any of them would become, an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended ("Investment
Company Act").
(w) The Company confirms as of the date hereof that it and
each of its subsidiaries 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 Company further agrees
that if it or any of its subsidiaries 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.
(x) The Company and each of its subsidiaries has obtained all
licenses, permits, certificates, authorizations, accreditations,
approvals or consents which, to best knowledge of the Company, are
required by any Governmental Authority and which if not obtained would
have a Material Adverse Effect (collectively, the "Licenses"). Each
License has been duly obtained, is valid and in full force and effect,
is renewable by its terms or in the ordinary course of business without
the need to comply with any special qualifications or procedures or to
pay any amount other than routine filing fees. Neither the Company nor
any of its subsidiaries (i) is subject to any pending, or to the best
knowledge of the Company, threatened administrative or judicial
proceeding to revoke, cancel or declare any License granted to it
invalid in any respect, (ii) is acting outside the scope and authority
granted to it pursuant to any such License, or otherwise is in default
or in violation with respect to any such License, and no event has
occurred which constitutes, or with due notice or lapse of time or both
may constitute, a default by it or a violation of, any License and
(iii) has permitted any License granted to it to lapse since its
original effective date, except where such lapse did not have a
Material Adverse Effect. The Company and its subsidiaries have
completed and submitted, on a timely basis, all reports and filings
associated with their businesses as are required by any Governmental
Authority and which if not timely filed would have a Material Adverse
Effect.
(y) The Company is the successor in interest to all of the
assets, liabilities and business of the Partnership pursuant to that
certain Capital Contribution Agreement by and between the Company and
the Partnership dated as of _____________________ (the "Contribution
Agreement"). The Contribution Agreement and the performance of the
Company's obligations thereunder have been duly authorized by all
necessary corporate action and the Contribution Agreement has been duly
executed and delivered by and on
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behalf of the Company, and is the legal, valid and binding agreement of
the Company, and no approval, authorization or consent of any
Governmental Authority is necessary in connection with the consummation
by the Company of any of the transactions contemplated thereby.
Pursuant to the Contribution Agreement, the Company acquired all of the
assets and liabilities of the Partnership, including, but not limited
to, acquisition of all of the issued and outstanding capital stock of
Odd Job Holdings, Inc., a Delaware corporation, and assumption of
liabilities of $___________ pursuant to promissory notes issued to the
partners of the Partnership representing each Partner's pro rata share
of undistributed cumulative taxable income of the Partnership through
[DATE]. Pursuant to the Contribution Agreement, the Company issued
additional shares of Common Stock to the Partnership.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE
PRINCIPAL STOCKHOLDERS. The Partnership and each of the persons named on
SCHEDULE B attached hereto (each, a "Principal Stockholder"), severally and not
jointly, represents and warrants to, and agrees with, the Company and the
Underwriters as follows:
(a) The making and performance by the Partnership of this
Agreement and the Contribution Agreement, and the making and
performance by such Principal Stockholder of this Agreement will not
result in the breach, or be in contravention, of any provision of any
trust agreement, franchise, license, indenture, mortgage, deed of
trust, or other instrument to which the Partnership or such Principal
Stockholder is a party or by which the Partnership or such Principal
Stockholder or the property of the Partnership or such Principal
Stockholder may be bound or affected, or any order, rule or regulation
applicable to the Partnership or such Principal Stockholder of any
court or regulatory body, administrative agency or other governmental
body having jurisdiction over the Partnership or such Principal
Stockholder or any of the Partnership's or such Principal Stockholder's
properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Partnership or such
Principal Stockholder was or is now a party or by which it is bound,
and which would have a material adverse effect on the Partnership's or
such Principal Stockholder's ability to perform its obligations under
this Agreement (or, with respect to the Partnership, under the
Contribution Agreement). 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 by the Partnership or such Principal Stockholder (or, with
respect to the Partnership, the execution and delivery of the
Contribution Agreement) or the consummation of the transactions
contemplated herein (or, with respect to the Partnership, the
Contribution Agreement). This Agreement (and, with respect to the
Partnership, the Contribution Agreement) has been duly executed and
delivered by or on behalf of the Partnership and such Principal
Stockholder.
(b) The Partnership and such Principal Stockholder has not
taken and will not take, directly or indirectly, any action designed
to or which might be reasonably expected
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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.
(c) Each preliminary prospectus, insofar as it relates to the
Partnership and such Principal Stockholder and, to the actual knowledge
of the Partnership and such Principal Stockholder, in all other
respects, at the time of filing thereof, conformed in all material
respects with the requirements of the 1933 Act and, as of its date, to
the actual knowledge of the Partnership and such Principal Stockholder
did not include 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;
and the Registration Statement at the time of effectiveness, and at all
times subsequent thereto, up to the First Closing Date or the Second
Closing Date as hereinafter as defined, as the case may be, (i) as to
such parts of the Registration Statement and the Prospectus and any
amendments or supplements thereto as relate to the Partnership and such
Principal Stockholder, and the Registration Statement and the
Prospectus and any amendments or supplements thereto, to the actual
knowledge of the Partnership and such Principal Stockholder, in all
other respects, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in
all material respects conformed or will in all material respects
conform to the requirements of the 1933 Act; and (ii) neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as it relates to the Partnership and such Principal
Stockholder, and, to the actual knowledge of the Partnership and such
Principal Stockholder, in all other respects, included or will include
any untrue statement of a material fact or omitted or will omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(d) The Partnership and such Principal Stockholder agrees with
the Company and the Underwriters not to sell, contract to sell or
otherwise dispose of any Common Stock for a period of 180 days after
this Agreement becomes effective without the prior written consent of
the Representatives.
(e) Each Principal Stockholder and the Partnership, severally
and not jointly, represents and warrants to, and agrees with the
Underwriters that, to the actual knowledge of the Partnership and such
Principal Stockholder, the representations and warranties of the
Company as set forth in Section 2 of this Agreement are true and
correct in all material respects.
SECTION 4. 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.
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SECTION 5. 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 the Firm Shares from the Company 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 2,145,000, 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 12) 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 and the Custodian 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 delivery of federal or other immediately available
funds, by wire transfer or otherwise, to the Company and the Custodian. 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 and the Custodian prior to 10:00 A.M., Chicago Time, on the second
business day preceding the First Closing Date, and will be made available at the
Company's expense for checking and packaging by the Representatives at 10:00
A.M., Chicago Time, on the 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 Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 0000
Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx.
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 321,750 Option
Shares, at the same purchase price per share to be paid for the Firm Shares, for
use solely in covering any over-allotments 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 written 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
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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 ten 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 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 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 6. 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
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or supplement or use any such prospectus to which you or counsel for
the Underwriters shall reasonably object.
(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 of 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 Underwriters 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 or supplement 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 (in
form and substance satisfactory to counsel for the Underwriters) 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 any of its subsidiaries will,
prior to the earlier of the Second Closing Date or termination or
expiration of the option relating to the Option Shares, incur any
liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business,
except as contemplated by the Prospectus.
(f) Neither the Company nor any of its subsidiaries will
acquire any capital stock of the Company prior to the earlier of the
Second Closing Date or termination or
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expiration of the option relating to the Option Shares 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 option relating to the Option Shares, except in either case as
contemplated by the Prospectus or as required pursuant to the Company's
Restricted Stock Plan upon termination of employment by an employee
holding restricted stock. Except as bona fide consideration in an arm's
length transaction, neither the Company nor any of its subsidiaries
will forgive or acquire any promissory note representing any loans made
by the Company to any person which are described under the caption "Use
of Proceeds" in the Prospectus.
(g) As soon as practicable, but in any event not later than 15
months after the effective date of the Registration Statement, 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.
(h) 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 (d) 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.
(i) The Company will cooperate with the Underwriters in
qualifying or registering the Shares for sale under the state or
province securities 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. In connection with such
qualification or registration 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.
(j) During the period of five years hereafter, the Company
will furnish each of the Representatives 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, (iii) as soon as available, of
each report of the Company mailed to stockholders and (iv) any
additional information of a public nature concerning the Company or its
business that you may reasonably request.
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(k) 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.
(l) 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 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, copies of an amended Prospectus, or,
if required by such Rule 430A and/or Rule 434, 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 Rule 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.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National
Market which may from time to time be applicable to the Company 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.
(n) 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 (i) currently
outstanding options, warrants or convertible securities or (ii) the
Company's Restricted Stock Plan) for a period of 180 days after this
Agreement becomes effective without the prior written consent of the
Representatives. The Company has obtained similar agreements from each
of the holders of Common Stock.
(o) The Company will promptly deliver to the Representatives
copies of all correspondence to and from, and all documents issued to
and by, the Commission in connection with the registration of the
Shares under the 1933 Act.
(p) Prior to the First Closing Date, the Company will issue no
press release or other communication to the public, directly or
indirectly, with respect to the Company or any of its subsidiaries or
with respect to the financial condition, results of operations,
business, properties, assets or liabilities of any of them, or the
offering of the Shares, without your prior consent, which consent shall
not be unreasonably withheld.
SECTION 7. 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 and the expenses incurred by the
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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 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 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 applicable
state or province securities laws, including the 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 8. 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, the Principal Stockholders and the Partnership 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 have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
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(b) The Shares shall have been qualified for or exempted from
sale under the state securities and insurance 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.
(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 particularly the
business or properties of the Company or its subsidiaries, whether or
not arising in the ordinary course of business, which, in the
reasonable judgment of the Representatives, makes 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 Kahn, Kleinman, Xxxxxxxx and Xxxxxx,
L.P.A., counsel for the Company, the Partnership and the
Principal Stockholders, 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 as a corporation in good standing
under the laws of the State of Ohio with corporate
power and authority to own its properties and conduct
its business as described in the Prospectus; and the
Company has been duly qualified to do business as a
foreign corporation under the corporation law of, and
is in good standing as such in, every jurisdiction
where it owns or leases property;
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(2) an opinion to the same general effect as
clause (1) of this subparagraph (i) in respect of each
direct and indirect subsidiary of the Company;
(3) the authorized capital stock of the Company,
of which there is outstanding the amount set forth in
the Registration Statement and Prospectus (except for
subsequent issuances, if any, pursuant to stock
options or other rights referred to in the
Prospectus), conforms as to legal matters in all
material respects to the description thereof in the
Registration Statement and Prospectus; the issued and
outstanding capital stock of the Company has been duly
authorized and validly issued and is fully paid and
nonassessable and free of statutory preemptive rights;
(4) the issued and outstanding capital stock of
each subsidiary of the Company has been duly
authorized, validly issued and is fully paid and
nonassessable and free of statutory preemptive rights,
and the Company owns directly or indirectly 100
percent of the outstanding capital stock of each
subsidiary, and to the best knowledge of such counsel,
such stock is owned free and clear of any claims,
liens, encumbrances or security interests.
(5) the certificates for the Shares to be
delivered hereunder are in due and proper form,
and when 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 and will
be free of any pledge, lien, encumbrance, claim or
preemptive rights of, or rights of first refusal in
favor of, stockholders with respect to any of the
Shares or the issuance or sale thereof which are
created by or arise under the certificate of
incorporation or bylaws of the Company; to the best
knowledge of such counsel, there are no contractual
preemptive rights, rights of first refusal, rights of
co-sale or other similar rights which exist with
respect to any of the Shares or the issuance and sale
thereof; and the Shares have been duly and validly
authorized and Market, subject to official notice of
issuance;
(6) the Registration Statement has become
effective under the 1933 Act, and, to the best
knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under
the 1933 Act, and the Registration
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Statement (including the information deemed to
be part of the Registration Statement at the
time of effectiveness pursuant to Rule 430A(b)
and/or Rule 434, if applicable), the Prospectus
and each amendment or supplement thereto (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;
such counsel have no reason to believe that
either the Registration Statement (including the
information deemed to be part of the
Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or
Rule 434, if applicable) or the Prospectus, or
the Registration Statement or the Prospectus as
amended or supplemented (except for the
financial statements and other statistical or
financial data included therein as to which such
counsel need express no opinion), as of their
respective effective or issue dates, 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 as amended or supplemented, if
applicable, as of the First Closing Date or the
Second Closing Date, as the case may be,
contained any untrue statement of a material
fact or omitted to state any material fact
necessary to make the statements therein not
misleading in light of the circumstances under
which they were made; the statements in the
Registration Statement and the Prospectus
summarizing statutes, rules and regulations are
accurate and fairly and correctly present the
information required to be presented by the 1933
Act or the rules and regulations thereunder, in
all material respects and such counsel does not
know of any statutes, rules and regulations
required to be described or referred to in the
Registration Statement or the Prospectus that
are not described or referred to therein as
required; and such counsel does not know of any
legal or governmental proceedings pending or
threatened 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;
(7) the statements under the captions
"Certain Corporate Transactions,""Management,"
"Certain Transactions," "Description of Capital
Stock" and "Shares Eligible for Future Sale" in
the Prospectus, insofar as such statements
constitute a summary of transactions or
documents referred to therein or matters of law,
are to the best knowledge of such counsel
accurate summaries of such transactions or
documents and are accurate summaries of matters
of law and fairly and
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correctly present, in all material respects, the
information required to be disclosed with
respect to such transactions, documents and
matters by the 1933 Act and the rules and
regulations thereunder;
(8) this Agreement and the Pricing
Agreement and the performance of the Company's
obligations hereunder have been duly authorized
by all necessary corporate action and this
Agreement and the Pricing Agreement have been
duly executed and delivered by and on behalf of
the Company, and are legal, valid and binding
agreements of the Company, except as
enforceability of the same may be limited by
bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting
creditors' rights and by the exercise of
judicial discretion in accordance with general
principles applicable to equitable and similar
remedies and except as to those provisions
relating to indemnities for liabilities arising
under the 1933 Act, or contribution obligations
with respect thereto, as to which no opinion
need be expressed; and no approval,
authorization or consent of any Governmental
Authority is necessary in connection with the
issue or sale of the Shares by the Company
pursuant to this Agreement (other than under the
1933 Act, applicable state or province
securities and the rules of the NASD) or the
consummation by the Company of any other
transactions contemplated hereby;
(9) to the best of such counsel's
knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or
is in breach of, or in default under (nor has
any event occurred which, with notice, lapse
of time or both would constitute a breach of,
or default under) any indenture, lease, credit
agreement or other agreement or instrument to
which the Company or any of its subsidiaries
is a party and which are filed as exhibits to
the Registration Statement or which are leases
of real property, where such violation or
breach or default could have a Material Adverse
Effect;
(10) the execution, delivery and
performance of this Agreement, the issuance and
sale of the Shares, and the consummation of the
transactions herein contemplated by the Company,
will not contravene any of the provisions of, or
result in a default under, any agreement,
franchise, License, indenture, mortgage, deed of
trust, or other instrument to which the Company
or any of its subsidiaries is a party or by
which the property of any of them is based and
which are filed as exhibits to the Registration
Statement or which are leases of real property
where such contravention or default could have a
Material Adverse Effect; or violate any of the
provisions of the charter or bylaws
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of the Company or any of its subsidiaries or, so
far as is known to such counsel, violate any
statute, order, rule or regulation of any
Governmental Authority having jurisdiction over
the Company or any of its subsidiaries;
(11) to the best of such counsel's
knowledge, except as disclosed in the Prospectus
no person has the right, contractual or
otherwise, to cause the Company or any of its
subsidiaries to issue, or register pursuant to
the 1933 Act, any shares of capital stock of the
Company or any of its subsidiaries, upon the
issue and sale of the Shares to be sold by the
Company to the Underwriters pursuant to this
Agreement;
(12) to the best of such counsel's
knowledge, all offers and sales of the Company's
[AND THE PARTNERSHIP'S] capital stock or other
equity interests prior to the date hereof were
at all relevant times exempt from the
registration requirements of the 1933 Act and
were duly registered or the subject of an
available exemption from the registration
requirements of applicable state or province
securities laws;
(13) with respect to the Partnership and
to each Principal Stockholder, this Agreement
(and, with respect to the Partnership, the
Contribution Agreement), has been duly
authorized, executed and delivered by or on
behalf of each of the Partnership and such
Principal Stockholder; and the performance of
this Agreement (and, with respect to the
Partnership, the Contribution Agreement), and
the consummation of the transactions herein (or,
with respect to the Contribution Agreement,
therein) contemplated by the Partnership and
such Principal Stockholders will not result in a
breach or violation of any of the terms and
provisions of, or constitute a default under,
any statute, agreement, franchise, indenture,
mortgage, deed of trust, note agreement or other
agreement or instrument known to such counsel to
which the Partnership or any of such Principal
Stockholders is a party or by which any of them
are bound or to which any of the property of the
Partnership and such Principal Stockholders is
subject, or any order, rule or regulation known
to such counsel of any Governmental Authority
having jurisdiction over the Partnership and
such Principal Stockholders or any of their
properties;
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(14) The Partnership and each Principal Stockholder has
full right, power and authority to enter into this Agreement
(and, with respect to the Partnership, the Contribution
Agreement); and this Agreement (and, with respect to the
Partnership, the Contribution Agreement) is the legal, valid
and binding agreement of the Partnership and each Principal
Stockholder except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
and by the exercise of judicial discretion in accordance
with general principles applicable to equitable and similar
remedies and except with respect to those provisions
relating to indemnities for liabilities arising under the
1933 Act, as to which no opinion need be expressed; and
(15) Neither the Company nor any of its subsidiaries is
an "investment company" or a person "controlled by" an
"investment company" within the meaning of the Investment
Company Act;
In rendering such opinion, such counsel may state that they
are relying upon the certificate of ___________, 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
their opinion under clause (6) above relates 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 competent local counsel
satisfactory to counsel to the Underwriters as to legal matters
in jurisdictions other than those in which they are domiciled
and, as to factual matters, on certificates of officers of the
Company and of state or province officials, in which case their
opinion is to state that they are so doing and copies of such
opinions or certificates are to be attached to the opinion
unless such opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to
the Representatives in other form.
(ii) Such opinion or opinions of Xxxxxxxxxxxx Xxxx &
Xxxxxxxxx, 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.
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(iii) A certificate of the chief executive officer or
President 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 in all material respects as of the
date of this Agreement and as of the First Closing
Date or the Second Closing Date, as the case may be,
and the Company has complied with all the agreements
and satisfied all the conditions on its part to be
performed or satisfied 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; 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 such 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
KPMG Peat Marwick 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 C. There shall not
have been any material 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 addressed to you, as
Representatives of the Underwriters, from Deloitte & Touche
L.L.P., independent accountants, to be dated the date of the
Pricing Agreement confirming that as of January 31, 1995, and
during the period covered by the financial statements on which
they reported, they were independent accountants with respect
to Odd Job Trading Corp., POW Trading Corp., HIA Trading
Associates and Central Processing
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Associates within the meaning of the Act and the applicable
published rules and regulations thereunder, and that the
financial statements audited by them and included in the
Registration Statement comply as to form in all material
respect with the applicable accounting requirements of the Act
and the published rules and regulations thereunder with
respect to Registration Statements on Form S-1.
(vi) At or before the time the Pricing Agreement is
executed, there shall be delivered to you a letter
substantially in the form of EXHIBIT B hereto from each person
who holds shares of Common Stock or options which may be
exercised to acquire shares of Common Stock within 180 days of
such date, in which each such person agrees not to (1) sell,
contract to sell or otherwise dispose of any Common Stock for
a period of 180 days after the date of such letter without the
prior written consent of the Representatives, or (2) announce
an intent to sell any shares of the Company's Common Stock, or
execute any registration rights with respect to any shares of
the Company's Common Stock, for a period of 180 days after the
date of such letter without the prior written consent of the
Representatives.
(vii) 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 Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 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.
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 written notification to the
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 7
and 9 hereof and except to the extent provided in Section 11 hereof.
SECTION 9. 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
-24-
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and 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 7
and Section 11 shall at all times be effective and shall apply.
SECTION 10. 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 11. INDEMNIFICATION. (a) The Company and each Principal
Stockholder, severally and not jointly, agree 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 foreign, 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, 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 neither the Company
nor any Principal Stockholder will 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, including the information deemed to be part
of the Registration Statement at the time of effectiveness pursuant to Rule 430A
and/or Rule 434, if applicable, 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 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; and further provided, that
no Principal Stockholder will be liable in any such case in respect of any such
losses, claims, damages, liabilities or expenses unless the Underwriter or
controlling person seeking
-25-
26
indemnification from such Principal Stockholder hereunder shall
contemporaneously seek indemnification from the Company in respect thereof
(except that the foregoing condition preceding requiring an Underwriter or a
controlling person to seek indemnification from the Company shall not be
applicable if the Underwriter or controlling person has previously sought
indemnification from the Company with respect to such matters or if such
Underwriter or controlling person is prohibited from being indemnified by the
Company (or from seeking such indemnification) by the effect of any order,
decree, stay, injunction, statute, legal process or other matter of law). In
addition to their other obligations under this Section 11(a), the Company and
each Principal Stockholder 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 11(a), they will reimburse the Underwriters 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 Company's and the Principal
Stockholders' 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; provided, however, that all amounts paid to the
Underwriters in advance of final disposition of any claim for which
indemnification is sought from the Company and the Principal Stockholders
pursuant to this Section 11(a) shall be repaid if there is final judicial
determination that the Underwriters are not entitled to indemnification as
provided herein. This indemnity agreement will be in addition to any liability
which the Company and the Principal Stockholders may otherwise have.
Without limiting the full extent of the Company's agreement to
indemnify each Underwriter, as herein provided, each Principal Stockholder shall
be liable under the indemnity agreements contained in this Section 11(a) only
for an amount not exceeding the amount set forth opposite such Principal
Stockholder's name on SCHEDULE B, and the several liability of each Principal
Stockholder shall be determined in the same ratio that the amount set forth
opposite such Principal Stockholder's name on SCHEDULE B bears to the total
price paid to the Company for the Shares by the Underwriters (net of
underwriting discount but before deducting expenses).
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, 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 foreign,
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, including the
-26-
27
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A and/or Rule 434, 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, 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 4 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 11(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 11(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; provided, however, that all amounts paid to the
Company in advance of final disposition of any claim for which indemnification
is sought from the Underwriters pursuant to this Section 11(b) shall be repaid
if there is final judicial determination that the Company is not entitled to
indemnification as provided herein. 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
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel 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
-27-
28
counsel to represent both of them, the indemnified party 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 next 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, 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 or contribution
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
or insufficient to hold harmless 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, the Principal Stockholders 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, the Principal Stockholders 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
Principal Stockholders and the Underwriters shall be deemed to be in the same
proportion in the case of the Company and the Principal Stockholders, 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, the Principal Stockholders and the Underwriters
shall be determined by reference to, among
-28-
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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 the Principal Stockholders 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, the Principal Stockholders 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 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 12. 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 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, 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 non-defaulting
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 are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter
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or the Company, except for the expenses to be paid by the Company pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof.
In the event that Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date 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 13. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
10:00 A.M., Chicago time, on the day following the date 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); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 14. 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 Section 7 hereof and except to the extent provided in
Section 11 hereof) or of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the
First Closing Date, and the option referred to in Section 5, if
exercised, may be cancelled at any time prior to the Second Closing
Date, if (i) trading in securities on the New York Stock Exchange or
the Nasdaq National Market 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 opinion of the Representatives, either renders it
impracticable or inadvisable to proceed with the
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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 Section 6 hereof and
except to the extent provided in Section 10 hereof).
SECTION 15. 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, principals, members, 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 16. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered, telecopied or
telegraphed and confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxxx X. Xxxxxxx, Fax (312)
000-0000, with a copy to Xxxxx X. Xxxxxxxx, Xxxxxxxxxxxx Xxxx & Xxxxxxxxx,
Twentieth Century Tower II, 0000 Xxxx Xx., Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx
00000, Fax (000) 000-0000, if sent to the Company will be mailed, delivered or
telegraphed and confirmed to the Company at its corporate headquarters with a
copy to Xxxx X. Xxxxxxxxxxx, Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., L.P.A., Xxx
Xxxxx xx Xxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000, Fax (000) 000-0000.
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.
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.
-31-
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SECTION 19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
SECTION 20. APPLICABLE LAW. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois.
[This space intentionally left blank.]
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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,
MAZEL STORES, INC.
By:
----------------------------
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
SALOMON BROTHERS INC
Acting as Representatives of the
several Underwriters named in
SCHEDULE A.
XXXXXXX XXXXX & COMPANY, L.L.C.
By:
--------------------------
A Principal
-33-
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SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
Xxxxxxx Xxxxx & Company, L.L.C. ....................
Salomon Brothers Inc................................
---------
TOTAL ..............................................
=========
35
SCHEDULE B
Maximum Liability
Name of Principal Stockholder Under Section 11
-------------------------------- ----------------
36
SCHEDULE C
Comfort Letter for Mazel Stores, Inc.
To Be Delivered by KPMG Peat Marwick LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and its subsidiaries included in the Registration
Statement and the consolidated financial statements of the Company from which
the information presented under the captions "Summary Financial Data" and
"Selected Financial Data" 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) 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 its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to January 31,
1996, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since January 31, 1996, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its 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 unaudited consolidated financial statements of the
Company and its subsidiaries 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, (ii) the amounts in "Summary
Financial Data" and "Selected Financial Data" included in the Prospectus do not
agree with or are not derivable from the corresponding amounts in the audited
consolidated financial statements or unaudited consolidated financial statements
(as applicable) from which such amounts were derived, (iii) the pro forma
information included in the Prospectus does not comply in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation S-X and
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such information and (iv) 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 its
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
37
balance sheet of the Company included 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 its subsidiaries.
38
EXHIBIT A
MAZEL STORES, INC.
2,145,000 Shares Common Stock(1)
PRICING AGREEMENT
-----------------
Xxxxxxx Xxxxx & Company, L.L.C.
Salomon Brothers Inc
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated September __,
1996 (the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the several Underwriters for whom Xxxxxxx Xxxxx & Company and
Salomon Brothers Inc 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.
--------
1 Plus an option to acquire up to 321,750 additional shares to cover over-
allotments.
39
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. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall be considered one and the same
agreement.
Very truly yours,
MAZEL STORES, INC.
By:
------------------------------------
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
SALOMON BROTHERS INC
Acting as Representatives of the
several Underwriters named in
SCHEDULE A.
XXXXXXX XXXXX & COMPANY, L.L.C.
By:
------------------------------
A Principal
40
EXHIBIT B
[Letterhead of stockholders
and optionholders of the Company]
September __, 1996
Xxxxxxx Xxxxx & Company, L.L.C.
Salomon Brothers Inc
As Representatives of the Several
Underwriters
c/o Xxxxxxx Xxxxx & Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among Mazel Stores, Inc.,
an Ohio corporation (the "Company"), and each of you as representatives of a
group of Underwriters named therein, relating to an underwritten public offering
of Common Stock, no par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to (1) sell, contract to sell
or otherwise dispose of any Common Stock or securities convertible into Common
Stock for a period of 180 days after the date hereof without the prior written
consent of the Representatives, or (2) announce an intent to sell any shares of
the Company's Common Stock or exercise any registration rights with respect to
any shares of the Company's Common Stock for a period of 180 days after the date
hereof without the prior written consent of the Representatives.
If for any reason the Underwriting Agreement shall be terminated prior to
the First Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Very truly yours,
[Signature of stockholder or optionholder of the
Company]
[Name and address of stockholder or optionholder
of the Company]
