EXHIBIT 1.02
500,000 SHARES
PARK ELECTROCHEMICAL CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
______________ __, 1996
Xxxxxx Brothers Inc.
Xxxxxxx & Company, Inc.
Xxxxxxxxx, Xxxxxxxx & Company LLC,
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Xxxxx (the "Selling Shareholder") proposes to sell an aggregate of
500,000 shares (the "Stock") of the common stock, par value $.10 per share (the
"Common Stock"), of Park Electrochemical Corp., a New York corporation (the
"Company"). This is to confirm the agreement concerning the purchase of the
Stock from the Selling Shareholder by the Underwriters named in Schedule 1
hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the Underwriters and the
Selling Shareholder that:
(a) A registration statement on Form S-3, and amendments
thereto, with respect to the Stock have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act; and a second registration statement on Form S-3
with respect to the Stock (i) may also be prepared by the Company in
conformity with the requirements of the Securities Act and the Rule
and Regulations and (ii) if to be so prepared, will be filed with the
Commission under the Securities Act on the date hereof pursuant to
Rule 462(b) of the Rules and Regulations. Copies of the first such
registration statement and the amendments to such registration
statement, together with the form of any such second registration
statement, have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used
in this Agreement, "Effective Time" means (i) with respect to the
first such registration statement, the date and the time as of which
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such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission
and (ii) with respect to any second registration statement, the date
and time as of which such second registration statement is filed with
the Commission, and "Effective Times" is the collective reference to
both Effective Times; "Effective Date" means (i) with respect to the
first such registration statement, the date of the Effective Time of
such registration statement and (ii) with respect to any second
registration statement, the date of the Effective Time of such second
registration statement, and "Effective Dates" is the collective
reference to both Effective Dates; "Preliminary Prospectus" means each
prospectus included in any such registration statement, or amendments
thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent
of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as amended at
its Effective Time, "Rule 462(b) Registration Statement" means the
second registration statement, if any, referred to in this Section
1(a), as filed with the Commission, and "Registration Statements"
means both the Primary Registration Statement and any Rule 462(b)
Registration Statement, including in each case any documents
incorporated by reference therein at such time and all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section
6(a) hereof and deemed to be a part of the Registration Statements as
of the Effective Time of the Primary Registration Statement pursuant
to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to either of the Registration Statements
shall be deemed to include any annual report of the Company filed with
the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statements. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform) in all material respects
to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the applicable effective
date (as to the
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Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made by the Company (i) as to
information contained in or omitted from the Registration Statements
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein or
(ii) as to information contained in or omitted from the Registration
Statements or the Prospectus with respect to the Selling Shareholder
in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Selling Shareholder specifically
for inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents, when they became effective or
were filed with the Commission, as the case may be, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents
become effective or are filed with Commission, as the case may be,
will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification except
where the failure to be so qualified is not reasonably likely to have
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the Company
and its subsidiaries, and have all power and authority necessary to
own or hold their respective properties and to conduct the businesses
in which they are engaged; and none of the subsidiaries of the Company
(other than New England Laminates Co., Inc., Nelco Products, Inc.,
Nelco Technology, Inc., Neltec, Inc., Nelco Products Pte, Ltd. and
Nelco International Corporation (collectively, the "Significant
Subsidiaries")) is a "significant subsidiary", as such term is defined
in Rule 405 of the Rules and Regulations.
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(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable, subject to Section 630 of the New York
Business Corporation Law (the "BCL"), and conform to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable
and (except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The Stock has been duly and validly authorized and is duly
and validly issued, fully paid and non-assessable, subject to Section
630 of the BCL; and the Stock conforms to the descriptions thereof
contained in the Prospectus.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions on
the part of the Company contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries
or any of their properties or assets; and except for the registration
of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions on the part of the Company contemplated hereby.
(h) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company
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to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, stock options
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statements or
included or incorporated by reference in the Prospectus present fairly
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus or
are incorporated by reference therein and who have delivered the
initial letter referred to in Section 9(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations; and Deloitte & Touche LLP and Xxxxxx Xxxxxxxx LLP, whose
respective reports appear in the Prospectus and are incorporated by
reference therein and who have each delivered the initial letter
referred to in Section 9(g) hereof, were independent accountants as
required by the Securities Act and the Rules and Regulations during
the periods covered by the respective financial statements on which
they reported as set forth in their respective reports
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contained and incorporated in the Prospectus and as of the date of
such reports.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.
(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(o) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses described in the
Prospectus as being owned or used by it or which are necessary for the
conduct of its business and has no reason to believe that the conduct
of its business will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others which claims,
singularly or in the aggregate, if subject to an unfavorable decision,
ruling or finding, are reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations or business of the Company and its subsidiaries.
(p) Except for environmental proceedings referred to under the
caption "Business--Environmental Matters" in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or asset
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, are
reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries;
and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
(q) The conditions for use of Form S-3, as set forth in General
Instruction I thereto, have been satisfied.
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(r) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to either of
the Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed
as exhibits to either of the Registration Statements or incorporated
therein by reference as permitted by the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(t) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
(u) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(v) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof
and has paid all taxes shown by such returns to be due, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or
any of its subsidiaries, might have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries.
(w) The Company (i) maintains and keeps accurate books and
records and (ii) maintains a system of internal accounting controls
sufficient to provide
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reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements in accordance with generally accepted accounting principles
and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's general or
specific authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its properties or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its properties or assets or to the
conduct of its business, other than such defaults, violations or
failures described in clauses (ii) or (iii) above which, singularly or
in the aggregate, are not reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders' equity,
results of operations or business of the Company and its subsidiaries.
(y) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous substances
by the Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the properties now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; there has been no
material spill, discharge, leak, emission, injection, escape, dumping
or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by
the Company or any of its subsidiaries or with respect to which the
Company or any of its subsidiaries have knowledge, except for any such
spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to
have, singularly or in the aggregate with
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all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(z) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
2. Representations, Warranties and Agreements of the Selling
Shareholder. The Selling Shareholder represents and warrants to, and agrees
with, the Underwriters and the Company that:
(a) The Selling Shareholder has, and immediately prior to the
Delivery Date (as defined in Section 5 hereof) the Selling
Shareholder will have, good and valid title to the Stock, free and
clear of all liens, encumbrances, equities or claims; and upon
delivery of the Stock and payment therefor pursuant hereto, good and
valid title to the Stock, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Shareholder has full right, power and authority
to enter into this Agreement; the execution, delivery and performance
of this Agreement by the Selling Shareholder and the consummation by
the Selling Shareholder of the transactions on his part contemplated
hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Selling Shareholder is a party or by which
the Selling Shareholder is bound or to which any of the property or
assets of the Selling Shareholder is subject, nor will such actions
result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Selling Shareholder or the property or assets of
the Selling Shareholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Selling Shareholder and the consummation by the Selling
Shareholder of the transactions contemplated hereby.
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(c) To the extent that any statements or omissions made in the
Registration Statements, the Prospectus or any amendment or supplement
thereto are made in reliance upon and in conformity with written
information furnished to the Company by the Selling Shareholder
specifically for use therein, the Primary Registration Statement did
not, and the Rule 462(b) Registration Statement, if any, the
Prospectus and any amendments or supplements to the Registration
Statements or the Prospectus will not, when they become effective or
are filed with the Commission, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the shares of the
Stock in violation of Rule 10b-6 under the Exchange Act.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Selling Shareholder hereby agrees to sell
500,000 shares of Stock to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Stock set opposite that Underwriter's name in Schedule 1 hereto. The
price to be paid by the Underwriters for the Stock shall be $_____ per share.
The Selling Shareholder shall not be obligated to deliver any of the
Stock to be delivered on the Delivery Date except upon payment for all the Stock
to be purchased on the Delivery Date as provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Stock,
the several Underwriters propose to offer the Stock for sale upon the terms and
conditions set forth in the Prospectus; provided, however, that no Stock
registered pursuant to the Rule 462(b) Registration Statement, if any, shall be
offered prior to the Effective Time thereof.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the Stock shall be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time,
on the [third][fourth] full business day following the date of this Agreement or
at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "Delivery Date." On the Delivery Date, the Selling Shareholder shall
deliver or cause to be delivered certificates representing the Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Selling Shareholder of the
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purchase price by certified or official bank check or checks payable in New York
Clearing House (next-day) funds. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. Upon delivery, the Stock shall
be registered in such names and in such denominations as the Representatives
shall request in writing not less than two full business days prior to the
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Stock, the Company and the Selling Shareholder shall make
the certificates representing the Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City
time, the day following the execution and delivery of this Agreement;
to make no further amendment or any supplement to the Registration
Statements or to the Prospectus prior to the Delivery Date except as
permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to either
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering
or sale of the Stock; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statements or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
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(c) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings), (ii) each Preliminary Prospectus,
the Prospectus (not later than 10:00 A.M., New York City time, of the
day following the execution and delivery of this Agreement) and any
amended or supplemented Prospectus (not later than 10:00 A.M., New
York City time, on the day following the date of such amendment or
supplement) and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time of the
Primary Registration Statement in connection with the offering or sale
of the Stock (or any other securities relating thereto) and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, to
notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives
may from time to time request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such
compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to
either of the Registration Statements, any supplement to the
Prospectus or any document incorporated by reference in the Prospectus
or (ii) any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the
Representatives to the filing;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement, to make generally available to the
Company's security holders and to deliver to the Representatives an
earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section
13
11(a) of the Securities Act and the Rules and Regulations (including,
at the option of the Company, Rule 158);
(g) For a period of three years following the Effective Date of
the Primary Registration Statement, to furnish to the Representatives
copies of all materials furnished by the Company to its shareholders
and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange
upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction or
to subject itself to taxation in any jurisdiction in which it is not
currently subject to taxation; and
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, offer for sale, sell or otherwise dispose
of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition or purchase by any
person at any time in the future of) any shares of Common Stock (other
than the Stock and shares offered or issued pursuant to employee
benefit plans, stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights and other than in connection with the
offer for sale, or the conversion, of the Company's Convertible
Subordinated Notes (the "Notes") being offered contemporaneously with
the offering of the Stock), or sell or grant options, rights or
warrants with respect to any shares of Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof
and other than in connection with the offer, or conversion, of the
Notes), without the prior written consent of Xxxxxx Brothers Inc.; and
to cause each officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, offer for sale, sell or otherwise dispose of
(or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition or purchase by any
person at any time in the future of) any shares of Common Stock for a
period of 90 days from the date of the Prospectus, without the prior
written consent of the Representatives.
7. Further Agreements of the Selling Shareholder. The Selling
Shareholder agrees:
(a) For a period of one year from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition or purchase by
any person at any time in the future of) any shares of
14
Common Stock (other than the Stock), without the prior written consent
of Xxxxxx Brothers Inc.; provided, however, that nothing herein shall
prohibit or require any consent for (1) gifts by the Selling
Shareholder made more than 90 days after the date of the Prospectus of
up to an aggregate of _________ shares of Common Stock or (2) the
offer for sale, sale or other disposition of shares of Common Stock in
connection with a default or event of default under the terms of one
or more loans to the Selling Shareholder in an aggregate principal
amount not in excess of $1 million secured by shares of Common Stock
or the pledge of shares of Common Stock by the Selling Shareholder to
secure any such loans.
(b) That the Stock to be sold by the Selling Shareholder
hereunder is subject to the interest of the Underwriters and that the
obligations of the Selling Shareholder hereunder shall not be
terminated by any act of the Selling Shareholder, by operation of law,
by the death or incapacity of the Selling Shareholder or the
occurrence of any other event.
(c) To deliver to the Representatives prior to the Delivery Date
a properly completed and executed United States Treasury Department
Form W-9.
8. Expenses. The Company agrees to pay (a) the costs incident to the
sale and delivery of the Stock and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statements and any amendments and exhibits thereto (other
than filing fees of the Commission relating to the Stock); (c) the costs of
distributing the Registration Statements as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
all as provided in this Agreement; (d) the costs of reproducing and distributing
this Agreement; (e) the costs of distributing the terms of agreement relating to
the organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) any applicable
listing or other fees; (g) the fees and expenses of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (h) all other costs and expenses incident to
the performance of the obligations of the Company and, except as otherwise
specifically provided in this Section 8, of the Selling Shareholder under this
Agreement. The Selling Shareholder agrees to pay (a) the filing fees relating to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Stock, (b) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 6(h) (including related fees and expenses of counsel to the
Underwriters), (c) any transfer taxes payable in connection with the sale of the
Stock to the Underwriters, (d) the filing fees of the Commission under the
Securities Act relating to the Stock and (e) legal fees of counsel to the
Selling Shareholder. Except as provided in this Section 8 and in Section 13,
the Underwriters shall pay their own costs and expenses, including the costs and
expenses of their
15
counsel, any transfer taxes on the Stock which they may sell and the expenses of
advertising any offering of the Stock made by the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the Company
and the Selling Shareholder contained herein, to the performance by the Company
and the Selling Shareholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the
effectiveness of either of the Registration Statements or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in
either of the Registration Statements or the Prospectus or otherwise
shall have been complied with or withdrawn.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or
supplement thereto contains any untrue statement of a fact which, in
the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Stock,
the Registration Statements and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all material respects to counsel for
the Underwriters, and the Company and the Selling Shareholder shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(d) Xxxxx X. Xxxxx, Esq. shall have furnished to the
Representatives his written opinion, as special counsel to the
Company, addressed to the Underwriters and dated the Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Company and each of its Significant Subsidiaries
have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business
and are in good standing
16
as foreign corporations in each jurisdiction specified in such
opinion, and have all power and authority necessary to own or
hold their respective properties and conduct the businesses in
which they are engaged;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the shares of Stock) have been
duly and validly authorized and issued, are fully paid and non-
assessable (subject to Section 630 of the BCL) and conform to the
description thereof contained in the Prospectus; and all of the
issued shares of capital stock of each Significant Subsidiary of
the Company have been duly and validly authorized and issued and
are fully paid, non-assessable (except as otherwise provided by
applicable law) and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Stock pursuant to the Company's
charter or by-laws or any agreement or other instrument known to
such counsel;
(iv) To the best of such counsel's knowledge and other
than as referred to under the caption "Business--Environmental
Matters" in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
are reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) The Primary Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b) Registration
Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and, to the knowledge of such counsel, no stop order
suspending the effectiveness of either of the Registration
Statements has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
17
(vi) The Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of its date, and any
further amendments or supplements thereto, as of their respective
dates, made by the Company prior to the Delivery Date (other than
the financial statements and other financial data contained
therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
and the documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules and
other financial data contained therein, as to which such counsel
need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder;
(vii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to
the Registration Statements or incorporated therein by reference
as permitted by the Rules and Regulations;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
(ix) The sale of the shares of Stock by the Selling
Shareholder and the compliance by the Company and the Selling
Shareholder with all of the provisions of this Agreement and the
consummation by the Company and the Selling Shareholder of the
transactions on their respective parts contemplated hereby will
not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which
any of the properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets;
and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection
with the purchase and distribution of the Stock by the
Underwriters (in the
18
case of such state securities laws, as to which such counsel need
express no opinion), no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions on the part of the Company
contemplated hereby; and
(x) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities
in the securities registered pursuant to the Registration
Statements or in any securities being registered pursuant to any
other registration statement filed by the Company under the
Securities Act.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States
of America and the laws of the State of New York. Such counsel shall
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated the Delivery Date, in form and
substance satisfactory to the Representatives, to the effect that (x)
such counsel has acted as counsel to the Company on a regular basis
with respect to corporate and securities law matters (although the
Company is also represented by its General Counsel and, with respect
to certain other matters, by other outside counsel) and has acted as
counsel to the Company in connection with the preparation of the
Registration Statements, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead him to believe that
(I) the Registration Statements (other than the financial statements
and other financial data contained therein, as to which such counsel
need make no such written statement), as of their respective Effective
Dates, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the
Prospectus (other than the financial statements and other financial
data contained therein, as to which such counsel need make no such
written statement) contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (II) any
document incorporated by reference in the Prospectus or any further
amendment or supplement to any such incorporated document made by the
Company prior to the Delivery Date (other than the financial
statements and other financial data contained therein, as to which
such counsel need make no such written statement), when they became
effective or were filed with the Commission, as the case may be,
contained any untrue statement of a material fact
19
or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that, except as stated in
paragraph (ii) above, such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statements or the Prospectus.
(e) Xxxxx X. Xxxxx, Esq., as counsel for the Selling
Shareholder, shall have furnished to the Representatives his written
opinion, addressed to the Underwriters and dated the Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Selling Shareholder has full right, power and
authority to enter into this Agreement; the execution, delivery
and performance of this Agreement by the Selling Shareholder and
the consummation by the Selling Shareholder of the transactions
on the part of the Selling Shareholder contemplated hereby will
not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
statute, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which
the Selling Shareholder is a party or by which the Selling
Shareholder is bound or to which any of the property or assets of
the Selling Shareholder is subject, nor will such actions result
in any violation of any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Selling Shareholder or the property
or assets of the Selling Shareholder; and, except for the
registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase
and distribution of the Stock by the Underwriters (as to which
such counsel need express no opinion), no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the
Selling Shareholder and the consummation by the Selling
Shareholder of the transactions on the part of the Selling
Shareholder contemplated hereby;
(ii) This Agreement has been duly executed and delivered
by or on behalf of the Selling Shareholder; and
(iii) Upon payment for, and delivery of, the shares of
Stock to be sold by the Selling Shareholder under this Agreement
in accordance with the terms hereof, the Underwriters will
acquire all of the rights of the Selling Shareholder in such
shares and will also acquire the interest of the
20
Selling Shareholder in such shares free of any adverse claim
(within the meaning of the Uniform Commercial Code).
In rendering such opinion, such counsel may (i) state that his opinion
is limited to matters governed by the Federal laws of the United
States of America and the laws of the State of New York and (ii) in
rendering the opinion in Section 9 above, rely upon a certificate of
the Selling Shareholder in respect of matters of fact as to ownership
of, and the absence of adverse claims regarding, the shares of Stock
sold by the Selling Shareholder, provided that such counsel shall
furnish copies thereof to the Representatives and state that he
believes that both the Underwriters and he are justified in relying
upon such certificate. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated the Delivery Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that (x) such counsel has acted
as counsel to the Selling Shareholder in connection with the
preparation of the Registration Statements, and (y) based on the
foregoing, no facts have come to the attention of such counsel which
lead him to believe that the Registration Statements (other than the
financial statements and other financial data contained therein, as to
which such counsel need make no such written statement), as of their
respective Effective Dates, contained any untrue statement of a
material fact relating to the Selling Shareholder or omitted to state
such a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the
Prospectus (other than the financial statements and other financial
data contained therein, as to which such counsel need make no such
written statement) contains any untrue statement of a material fact
relating to the Selling Shareholder or omits to state such a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel, as counsel
to the Selling Shareholder, does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statements or the Prospectus.
(f) With respect to the letter of Ernst & Young LLP delivered to
the Representatives concurrently with the execution of this Agreement
(as used in this paragraph, the "initial letter"), the Company shall
have furnished to the Representatives a letter (as used in this
paragraph, the "bring-down letter") of such accountants, addressed to
the Underwriters and dated the Delivery Date (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
21
more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(g) With respect to the letter of each of Deloitte & Touche LLP
and Xxxxxx Xxxxxxxx LLP delivered to the Representatives concurrently
with the execution of this Agreement (each, as used in this paragraph,
the "initial letter"), the Company shall have furnished to the
Representatives a letter (as used in this paragraph, the "bring-down
letter") of each such accountants, addressed to the Underwriters and
dated the Delivery Date (i) confirming that such accountants were
independent public accountants within the meaning of the Securities
Act and were in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission during the periods covered by the respective
financial statements on which they reported as set forth in their
respective reports contained and incorporated in the Prospectus and as
of the date of such reports and (ii) confirming in all material
respects the conclusions and findings set forth in such accountants'
initial letter.
(h) The Company shall have furnished to the Representatives a
certificate, dated the Delivery Date, of its Chairman of the Board or
an Executive Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of the Delivery
Date; the Company has complied with all its agreements contained
herein; and the condition set forth in Section 9(a) has been
fulfilled;
(ii) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus and since such date there has
not been any material adverse change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a
prospective change, in or affecting the general affairs or
management of the Company or the consolidated financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus; and
22
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A) the
Registration Statements, as of their respective Effective Dates,
and the Prospectus, as of each of the Effective Dates, did not
include any untrue statement of a material fact and did not omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the Effective Date of the Primary Registration Statement no
event has occurred which should have been set forth in a
supplement or amendment to either of the Registration Statements
or the Prospectus which has not been set forth in such a
supplement or amendment.
(i) The Selling Shareholder shall have furnished to the
Representatives a certificate, dated the Delivery Date, signed by the
Selling Shareholder stating that:
(i) The representations, warranties and agreements of the
Selling Shareholder contained herein are true and correct as of
the Delivery Date and that the Selling Shareholder has complied
with all agreements contained herein to be performed by the
Selling Shareholder at or prior to the Delivery Date; and
(ii) The Selling Shareholder has carefully examined the
Registration Statements and the Prospectus and, in his opinion,
to the extent that any statements or omissions made in the
Registration Statements, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Shareholder specifically for use therein, (A) the Registration
Statements, as of their respective Effective Dates, and the
Prospectus, as of each of the Effective Dates, did not include
any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date of the Primary Registration Statement no event has
occurred which should have been set forth in a supplement or
amendment to either of the Registration Statements or the
Prospectus which has not been set forth in such a supplement or
amendment.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs or management of the Company or the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case
23
described in clause (i) or (ii), is, in the reasonable judgment of the
Representatives, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Stock on the terms and in the manner contemplated in the
Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock on the terms and in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company and Nelco International Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Company (the "Principal
Subsidiary"), jointly and severally, shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act and the Selling
Shareholder, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person or
Selling Stockholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto, or (B)
in any blue sky application or other document prepared or executed by the
Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Stock under the
securities laws of any
24
state or other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto, or in
any Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each Underwriter and each such officer, employee and controlling person and the
Selling Shareholder promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
or Selling Shareholder in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and the
Principal Subsidiary shall not be liable (x) to any Underwriter or any such
officer, employee or controlling person in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application in reliance upon and in conformity with the written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein as described in Section 10(f) or
(y) in any such case to the extent that any such loss, claim, damage, liability
or action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Company by or on behalf
of the Selling Shareholder specifically for inclusion therein as described in
Section 10(f). The foregoing indemnity agreement is in addition to any liability
which the Company or the Principal Subsidiary may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter or to the Selling Shareholder.
(b) The Selling Shareholder shall indemnify and hold harmless the
Company, its officers and employees, each of its directors and each person, if
any, who controls the Company within the meaning of the Securities Act, each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which the Company, or any
such director, officer, employee or controlling person of the Company or such
Underwriter, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in
25
conformity with written information furnished to the Company by or on behalf of
the Selling Shareholder specifically for inclusion therein as described in
Section 10(f), and shall reimburse the Company and any such director, officer,
employee or controlling person of the Company and each Underwriter, its officers
and employees and each such controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the Company or any such director,
officer, employee or controlling person of the Company or such Underwriter, its
officers, employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which the Selling Shareholder may otherwise have to
the Company or any such director, officer, employee or controlling person of the
Company or any Underwriter or any officer, employee or controlling person of
that Underwriter. In no event shall the Selling Shareholder be liable under this
Section 10 for an aggregate amount in excess of the aggregate initial public
offering price of the Stock as set forth on the cover page of the Prospectus.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
each person, if any, who controls the Company within the meaning of the
Securities Act, and the Selling Shareholder, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer or controlling person or the
Selling Shareholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto, or (B)
in any Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, either of the Registration Statements or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the written information
furnished to the Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein as described in Section 10(f),
and shall reimburse the Company, any such director, officer or controlling
person and the Selling Shareholder for any legal or other expenses reasonably
incurred by the Company, any such director, officer or controlling person or the
Selling Shareholder in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company, any such
director, officer or controlling person or the Selling Shareholder.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability
26
which it may have under this Section 10 except to the extent it has been
materially prejudiced by such failure and, provided further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 10. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company, the Principal Subsidiary or the Selling Shareholder under
this Section 10 if, in the reasonable judgment of the Representatives, it is
advisable for the Representatives and those Underwriters, officers, employees
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company, the Principal Subsidiary and, if it is a claim in respect of which
indemnification may be sought by the Underwriters against the Selling
Shareholder, the Selling Shareholder. Each indemnified party, as a condition of
the indemnity agreements contained in Sections 10, 10(b) and 10(c), shall use
its best efforts to cooperate with the indemnifying party in the defense of any
such action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its prior written consent (which consent
shall not be unreasonably withheld), but if settled with its prior written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Shareholder on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
27
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholder on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Selling Shareholder, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder, or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Principal Subsidiary, the Selling Shareholder and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10(e) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10(e) shall be deemed to include, for
purposes of this Section 10(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm that the statements with
respect to the public offering of the Stock set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statements and the
Prospectus. The Selling Shareholder confirms that the statements set forth
under the caption "Selling Shareholder" in the Prospectus (other than statements
therein expressly made by the Company) are correct and constitute the only
information furnished in
28
writing to the Company by or on behalf of the Selling Shareholder specifically
for inclusion in the Registration Statements and the Prospectus.
11. Defaulting Underwriters.
If, on the Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on the Delivery Date in the respective
proportions which the number of shares of the Stock set opposite the name of
each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of shares of the Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on the Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
the Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on the Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on the Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on the
Delivery Date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Shareholder, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Shareholder for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination.
The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Company and the Selling
Shareholder prior to delivery of and payment for the Stock if, prior to that
time, any of the events described
29
in Sections 9(j) or 9(k) shall have occurred or if the Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Selling
Shareholder shall fail to tender the Stock for delivery to the Underwriters for
any reason permitted under this Agreement, or (b) the Underwriters shall decline
to purchase the Stock for any reason permitted under this Agreement (including
the termination of this Agreement pursuant to Section 12), the Company and the
Selling Shareholder shall reimburse the Underwriters for the reasonable fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Selling Shareholder
shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 11 by reason of the default of one or more
Underwriters, neither the Company nor the Selling Shareholder shall be obligated
to reimburse any defaulting Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000);
(b) if to the Company or the Selling Shareholder, shall be
delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Primary Registration
Statement, Attention: Chief Financial Officer (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Shareholder shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Shareholder and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the indemnities and agreements of
the Company contained in Section 10(a) of this Agreement shall also be deemed to
be for the benefit of the officers and employees of each Underwriter and the
person or persons, if any, who control each Underwriter within the meaning of
Section 15 of the Securities Act, (B) the indemnities and
30
agreements of the Selling Shareholder contained in Section 10(b) of this
Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act and the officers and employees of
each Underwriter and the person or persons, if any, who control each Underwriter
within the meaning of Section 15 of the Securities Act and (C) the indemnity
agreement of the Underwriters contained in Section 10(c) of this Agreement shall
be deemed to be for the benefit of directors, officers and employees of the
Company and any person controlling the Company within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
15, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Principal Subsidiary, the Selling
Shareholder and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Stock and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
31
If the foregoing correctly sets forth the agreement among the Company,
the Principal Subsidiary, the Selling Shareholder and the Underwriters, please
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
PARK ELECTROCHEMICAL CORP.
By ________________________________________
Title:
NELCO INTERNATIONAL CORPORATION
By ________________________________________
Title:
The Selling Shareholder:
___________________________________________
Xxxxx Xxxxx
Accepted:
Xxxxxx Brothers Inc.
Xxxxxxx & Company, Inc.
Xxxxxxxxx, Xxxxxxxx & Company LLC
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By _____________________________________
Authorized Representative
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
Xxxxxx Brothers Inc. . . . . . . . . . . . . . . . .
Xxxxxxx & Company, Inc. . . . . . . . . . . . . . . .
Xxxxxxxxx, Xxxxxxxx & Company LLC . . . . . . . . . .
-------
Total. . . . . . . . . . . . . . . . . . . . . . . 500,000
=======
