XXXX X. XXXXXXXXXX & SON, INC.
2,300,000 Shares*
Common Stock
($0.01 par value per share)
------------------------------
Underwriting Agreement
March 23, 2004
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
x/x Xxxxx, Xxxxxxxx & Xxxx, Xxx.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs:
Xxxx X. Xxxxxxxxxx & Son, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the several Underwriters named in
Schedule I hereto (collectively, the "Underwriters") an aggregate of
1,000,000 shares and, at the election of the Underwriters, up to
150,000 additional shares of Common Stock, par value $.01 per share,
of the Company (the "Common Stock"), and the stockholders of the
Company named in Schedule II hereto (the "Selling Stockholders")
propose, subject to the terms and conditions stated herein, to sell to
the Underwriters an aggregate of 1,000,000 shares and, at the election
of the Underwriters, up to 150,000 additional shares of Common Stock
(as and to the extent indicated in Schedule II hereto). The aggregate
of 2,000,000 shares to be sold by the Company and the Selling
Stockholders is herein called the "Firm Shares" and the aggregate of
300,000 additional shares to be sold by the Company and certain
Selling Stockholders is herein called the "Optional Shares." The Firm
Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 3 hereof are herein collectively called the
"Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement on Form S-3 (File No.
333-112221) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement including any
pre-effective amendments thereto and any post-effective amendments
thereto, each in the form heretofore delivered to you and, excluding
exhibits thereto, but including all documents incorporated by
reference in the prospectus contained therein, delivered to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed
-----------------------
* Includes 300,000 shares subject to an option to purchase
additional shares to cover over-allotments.
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to
the Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"); the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits to the foregoing (including any exhibits
incorporated by reference), and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective or the Rule 462(b) Registration Statement, if any, at the
time it became effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective, each as amended at the time such part of such
Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus"; and any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxx, Xxxxxxxx & Xxxx, Inc.
expressly for use therein or by a Selling Stockholder expressly for
use in the preparation of the answers therein to Item 7 of Form S-3;
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(d) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date and the
applicable Time of Delivery (as hereinafter defined) as to the
Prospectus and any amendment or supplement thereto contain an untrue
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statement of a material fact or omit to state a material fact required
to be stated therein or, in the case of the Registration Statement or
any amendment thereto, necessary to make the statements therein not
misleading and, in the case of the Preliminary Prospectus, the
Prospectus or any supplement thereto, necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxx, Xxxxxxxx & Xxxx, Inc.
expressly for use therein or by a Selling Stockholder expressly for
use in the preparation of the answers therein to Item 7 of Form S-3;
(e) There are no contracts or other documents required to
be described in the Registration Statement or to be filed as exhibits
to the Registration Statement by the Act or by the rules and
regulations thereunder which have not been described in, filed as
exhibits to, or incorporated by reference in the Registration
Statement, as required; the contracts so described in the Prospectus
to which the Company or any of its subsidiaries is a party have been
duly authorized, executed and delivered by the Company or its
subsidiaries, constitute valid and binding agreements of the Company
or its subsidiaries and are enforceable against the Company or its
subsidiaries in accordance with their respective terms, except as such
enforceability may be limited by (i) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or
similar laws in effect which affect the enforcement of creditors'
rights generally, (ii) general principles of equity, whether
considered in a proceeding at law or in equity and (iii) state or
federal securities laws or policies relating to the non-enforceability
of the indemnification provisions contained therein, and, to the
Company's knowledge, such contracts are enforceable in accordance with
their respective terms by the Company against the other parties
thereto, except as such enforceability may be limited by (x)
applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws in effect which affect the
enforcement of creditors' rights generally, (y) general principles of
equity, whether considered in a proceeding at law or in equity and (z)
state or federal securities laws or policies relating to the non-
enforceability of the indemnification provisions contained therein,
and such contracts are in full force and effect on the date hereof;
and neither the Company nor any of its subsidiaries, nor, to the best
of the Company's knowledge, any other party thereto, is in breach of
or default under any of such contracts, except for such breaches or
defaults that will not result in a material adverse change in the
business, assets, management, financial position or results of
operations of the Company and its subsidiaries taken as a whole
(hereinafter, a "Material Adverse Change");
(f) 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 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, that is in
each case material to the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has not been
any change in the capital stock (other than issuances of Common Stock
pursuant to Company stock option plans described in the Registration
Statement and Prospectus or issuances of Common Stock upon the
conversion of Class A Common Stock, par value $.01 per share, of the
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Company (the "Class A Common Stock")) or long-term debt of the Company
or any of its subsidiaries or any Material Adverse Change, and (ii)
the Company or its subsidiaries have not entered into material
transaction or incurred any material obligation outside of the
ordinary course of business, otherwise than as set forth in the
Prospectus;
(g) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all other tangible properties and assets described
in the Prospectus as owned by it, in each case free and clear of all
liens, charges, claims, encumbrances or restrictions, except such as
(i) are described in the Prospectus or (ii) do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; any 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; the
Company and its subsidiaries own or lease all such properties as are
necessary to its operations as now conducted or as proposed to be
conducted, except where the failure to so own or lease would not
result in a Material Adverse Change;
(h) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of organization, each
with full power and authority (corporate and otherwise) to own its
properties and conduct its business as described in the Prospectus,
and each has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where the
failure to be so qualified or in good standing would not result in a
Material Adverse Change;
(i) The Company has an authorized capitalization as set
forth in the Prospectus, and all the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the descriptions thereof
contained or incorporated by reference in the Prospectus; all of the
issued shares of capital stock of each subsidiary of the Company (i)
have been duly and validly authorized and issued, are fully paid and
non-assessable and (ii) except as disclosed in the Prospectus, are
owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims; except as disclosed in or
contemplated by the Prospectus and the consolidated financial
statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any subsidiary has outstanding
any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations; and the description of the Company's stock option and
stock purchase plans and the options or other rights granted and
exercised thereunder set forth in the Prospectus accurately and fairly
presents in all material respects the information required by the Act
and the published rules and regulations of the Commission thereunder
to be shown with respect to such plans, options and rights;
(j) The unissued Shares to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
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provided herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Common Stock
contained or incorporated by reference in the Prospectus; no
preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of the Shares by the Company
pursuant to this Agreement; no stockholder of the Company has any
right, which has not been waived, to require the Company to register
the sale of any shares of capital stock owned by such stockholder
under the Act in the public offering contemplated by this Agreement;
and no further approval or authority of the stockholders or the Board
of Directors of the Company will be required for the issuance and sale
of the Shares to be sold by the Company as contemplated herein;
(k) The Company has full corporate power and authority to
enter into this Agreement; and this Agreement has been duly
authorized, executed and delivered by the Company, constitutes a valid
and binding obligation of the Company and is enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or similar laws in effect which
affect the enforcement of creditors' rights generally, (ii) general
principles of equity, whether considered in a proceeding at law or in
equity and (iii) state or federal securities laws or policies relating
to the non-enforceability of the indemnification provisions contained
herein;
(l) The issue and sale of the Shares by the Company and
the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
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 material
agreement or material 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 property or assets of the
Company or any of its subsidiaries is subject, except for any
conflict, breach, violation or default that would not result in a
Material Adverse Change, nor will any such actions result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company as currently in effect 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; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act
of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. ("NASD") in connection with
the purchase and distribution of the Shares by the Underwriters;
(m) Except as disclosed in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending or, to the
best of the Company's knowledge, threatened to which the Company or
any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be
the subject, or related to environmental or discrimination matters,
which actions, suits or proceedings, would reasonably be expected,
individually or in the aggregate, to prevent or adversely affect the
5
transactions contemplated by this Agreement or result in a Material
Adverse Change; no labor disturbance by the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent that would reasonably be expected to result in a Material
Adverse Change; and neither the Company nor any of its subsidiaries is
a party or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body, that would
reasonably be expected to result in a Material Adverse Change;
(n) The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities that are necessary
to enable them to own, lease and operate their respective properties
and to carry on their respective businesses as presently conducted,
except where the failure to possess such licenses, certificates,
authorization or permits would not reasonably be expected to result in
a Material Adverse Change; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority
or permit which, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Change;
(o) The Company and its subsidiaries (i) are in compliance
in all material respects with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, including, without limitation, those relating
to occupational safety and health, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, including,
without limitation, those relating to the storage, handling or
transportation of hazardous or toxic materials (collectively,
"Environmental Laws") and (ii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The Company, in its reasonable judgment, has
concluded that any costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Change;
(p) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder, and have been appointed by an Audit
Committee of the Board of Directors comprised entirely of independent
directors;
(q) The consolidated financial statements and schedules of
the Company, and the related notes thereto, included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly in all material respects the financial position of the Company
as of the respective dates of such financial statements and schedules,
and the results of operations and cash flows of the Company for the
respective periods covered thereby; such statements, schedules and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis as certified by
6
the independent public accountants named in paragraph (p) above; no
other financial statements or schedules are required to be included or
incorporated by reference in the Registration Statement; and the
selected financial data set forth in the Prospectus under the captions
"Capitalization," "Selected Consolidated Financial Data" and
"Prospectus Summary--Summary Consolidated Financial Data" fairly
present in all material respects the information set forth therein on
the basis stated in the Registration Statement;
(r) The Company owns, or possesses and/or has been granted
valid and enforceable licenses for, all registered patents, patent
applications, trademarks, trademark applications, tradenames,
servicemarks and copyrights necessary to the conduct of its business
as such business is described in the Prospectus (collectively, the
"Registered Intellectual Property"). The expected expiration of any
of the Company's rights to the Registered Intellectual Property would
not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The Company has no knowledge of any
infringement or misappropriation by third parties of any of the
Registered Intellectual Property, or any material inventions,
manufacturing processes, formulae, trade secrets, know-how,
unregistered trademarks, and other intangible property and assets
necessary to the conduct of its business as such business is described
in the Prospectus (collectively, the "Other Intellectual Property,"
and together with the Registered Intellectual Property, the
"Intellectual Property"), nor is there any pending or, to the best
knowledge of the Company, threatened action, suit, proceeding or claim
by others challenging the Company's rights of title or other interest
in or to any Intellectual Property, and except for such claims as
would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Change, the Company does not know of any
facts which would form a reasonable basis for any such claim. There
is no pending or, to the best knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the validity
and scope of any Intellectual Property, and except for such claims as
would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Change, the Company does not know of any
facts which would form a reasonable basis for any such claim. There
is no pending or, to the best knowledge of the Company, threatened
action, suit, proceeding or claim by others that the Company or any of
its products or processes or the Intellectual Property infringe or
otherwise violate any patent, trademark, servicemark, copyright, trade
secret or other proprietary right of others, and except for such
claims as would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Change, the Company is
unaware of any facts which would form a reasonable basis for any such
claim. The Company is not aware of (i) any grounds for an
interference proceeding before the United States Patent and Trademark
Office in relation to any of the patents or patent applications
currently owned by the Company, or (ii) any facts which would bar the
grant of a patent from each of the patent applications described in
the Prospectus. There is no pending or, to the best knowledge of the
Company, threatened action, suit proceeding or claim by any current or
former employee, consultant or agent of the Company seeking either
ownership rights to any invention or other intellectual property right
or compensation from the Company for any invention or other
intellectual property right made by such employee, consultant or agent
in the course of his/her employment with the Company or otherwise.
There is no act or omission by the Company or its agents or
representatives of which the Company has knowledge that may render any
patent or patent application within the Intellectual Property
unpatentable, unenforceable or invalid.
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(s) The Company and each of its subsidiaries have filed
all necessary federal, state and foreign income and franchise tax
returns, each of which has been true and correct in all material
respects, and have paid all taxes shown as due thereon; and the
Company has no knowledge of any tax deficiency which has been or might
be asserted or threatened against the Company or any of its
subsidiaries which could reasonably be expected to result in a
Material Adverse Change;
(t) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(u) Each of the Company and its subsidiaries maintains
insurance of the types and in the amounts which it deems adequate for
its business, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is
in full force and effect;
(v) Neither the Company nor any of its subsidiaries has at
any time during the last five years (i) made any unlawful contribution
to any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
foreign, federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof;
(w) Other than exempted activity under Regulation M, the
Company has not taken and will not take, directly or indirectly
through any of its directors, officers or controlling persons, any
action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares;
(x) The Common Stock of the Company has been registered
pursuant to Section 12(g) of the Exchange Act and the Company is not
required to take any further action for the inclusion of the Shares on
the Nasdaq National Market (other than filing the Notification Form:
Change in the Number of Shares Outstanding with Nasdaq no later than
10 days after the issuance of the Shares); and
(y) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect thereto.
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2. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(a) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder
of this Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares
to be sold by such Selling Stockholder hereunder, have been obtained;
and such Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder;
(b) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney
and the Custody Agreement and the consummation of the transactions
herein and therein contemplated 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, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of
such Selling Stockholder if such Selling Stockholder is a corporation,
the Partnership Agreement of such Selling Stockholder if such Selling
Stockholder is a partnership, the Trust Agreement or Declaration of
Trust of such Selling Stockholder if such Selling Stockholder is a
trust, the Certificate of Formation or Limited Liability Company
Agreement of such Selling Stockholder if such Selling Stockholder is a
limited liability company, or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(c) Such Selling Stockholder has, and immediately prior to
each Time of Delivery such Selling Stockholder will have, good and
valid title to the Shares to be sold by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or
claims; and, upon delivery of such Shares and payment therefor
pursuant hereto, such Selling Stockholder will transfer to the several
Underwriters, good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims;
(d) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares;
(e) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by
such Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did not, and the Prospectus
and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are filed
9
with the Commission, as the case may be, 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;
(f) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(g) Certificates in negotiable form representing all of
the Shares to be sold by such Selling Stockholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and
delivered by such Selling Stockholder to Xxxx X. Xxxxxxxxxx & Son,
Inc., as custodian (the "Custodian"), and such Selling Stockholder has
duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II hereto, and each of them, as such
Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement on behalf of such
Selling Stockholder, to determine the purchase price to be paid by the
Underwriters to the Selling Stockholders as provided in Section 3
hereof, to authorize the delivery of the Shares to be sold by such
Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated
by this Agreement and the Custody Agreement; and
(h) The Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody, and
the appointment by such Selling Stockholder of the Attorneys-in-Fact
by the Power of Attorney, are irrevocable to the extent provided
thereunder, subject to the terms and conditions of this Agreement; the
obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death or incapacity of
any individual Selling Stockholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership
or corporation, by the dissolution of such partnership or corporation,
or by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by
or on behalf of the Selling Stockholders, subject to and in accordance
with, the terms and conditions of this Agreement and of the Custody
Agreements; and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of
them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
10
3. Shares Subject to Sale. On the basis of the
representations, warranties and agreements contained herein, and
subject to the terms and conditions of this Agreement:
(a) The Company and each of the Selling Stockholders
agree, severally and not jointly (in accordance with the allocation
set forth in Schedule II hereto), to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company and each of the Selling Stockholders, at the
First Time of Delivery, at a purchase price per share of $33.9982, the
number of Firm Shares (to be adjusted by Xxxxx, Xxxxxxxx & Xxxx, Inc.
so as to eliminate fractional shares) determined in each case by
multiplying the aggregate number of Shares to be sold by the Company
and each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of
which is the aggregate number of Firm Shares to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the aggregate number
of Firm Shares to be purchased by all of the Underwriters from the
Company and all of the Selling Stockholders hereunder; and
(b) In the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided
below, the Company and certain of the Selling Stockholders (as and to
the extent indicated in Schedule II hereto) agree, severally and not
jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company and such Selling Stockholders, at the Second Time of Delivery,
at the purchase price per share set forth in clause (a) of this
Section 3, that number of Optional Shares determined by multiplying
the number of Optional Shares as to which such election shall have
been exercised (to be adjusted by Xxxxx, Xxxxxxxx & Xxxx, Inc. so as
to eliminate fractional shares) by a fraction, the numerator of which
is the maximum number of Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are
entitled to purchase hereunder.
The Company and certain Selling Stockholders, as and to the
extent indicated in Schedule II hereto, hereby grant, severally and
not jointly, to the Underwriters the right to purchase at their
election up to 300,000 Optional Shares, at the purchase price per
share set forth in clause (a) of this Section 3, for the sole purpose
of covering sales of shares in excess of the number of Firm Shares.
Any such election to purchase Optional Shares shall be made in
proportion to the maximum number of Optional Shares to be sold by the
Company and each Selling Stockholder as set forth in Schedule II
hereto. Any such election to purchase Optional Shares may be
exercised only by written notice (the "Election Notice") from Xxxxx,
Xxxxxxxx & Xxxx, Inc. to the Company, given within a period of 30
calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by
Xxxxx, Xxxxxxxx & Xxxx, Inc. but in no event earlier than the First
Time of Delivery or, unless Xxxxx, Xxxxxxxx & Xxxx, Inc. and the
Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
4. Offering. Upon the authorization by you of the release of
the Firm Shares, the several Underwriters propose to offer the Firm
Shares for sale upon the terms and conditions set forth in the
Prospectus.
11
5. Closing. Certificates in definitive form for the Shares to
be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as Xxxxx, Xxxxxxxx & Xxxx, Inc. may
request upon at least forty-eight hours' prior notice to the Company
and the Selling Stockholders, shall be delivered by or on behalf of
the Company and the Selling Stockholders to Xxxxx, Xxxxxxxx & Xxxx,
Inc. for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire
transfer of same day funds to the account specified by the Company and
the Custodian, as their interests may appear, all at the office of
Xxxxx, Xxxxxxxx & Xxxx, Inc., 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., Boston time, on March 29, 2004
or such other time and date as Xxxxx, Xxxxxxxx & Xxxx, Inc. and the
Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., Boston time, on the date specified by Xxxxx,
Xxxxxxxx & Xxxx, Inc. in the Election Notice, or at such other time
and date as Xxxxx, Xxxxxxxx & Xxxx, Inc. and the Company may agree
upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for
delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery," and each such time and
date for delivery is herein called a "Time of Delivery." Such
certificates will be made available for checking and packaging at
least twenty-four hours prior to each Time of Delivery at such
location as Xxxxx, Xxxxxxxx & Xxxx, Inc. may specify. If the
Underwriters so elect, delivery of the Shares may be made by credit
through full fast transfer to the accounts at the Depository Trust
Company designated by Xxxxx, Xxxxxxxx & Xxxx, Inc.
6. Covenants of the Company. The Company agrees with each of
the Underwriters:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act, to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the last Time of
Delivery which shall be reasonably disapproved by you promptly giving
reasonable notice thereof; to advise you, promptly after it receives
notice thereof, of the time when the Registration Statement, or any
amendment thereto, has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you copies thereof; to advise you, 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 Prospectus, of the suspension of the
qualification of the Shares 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 Statement or 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 Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly, from time to time, to take such action as
you may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
12
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;
(c) To furnish the Underwriters with copies of the
Prospectus in such quantities as you may from time to time reasonably
request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issuance of
the Prospectus in connection with the offering or sale of the Shares
and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in 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 during such same period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon
your request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as you may from time to
time reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or effect
such compliance, and in case any Underwriter is required by law to
deliver a prospectus in connection with sales of any of the Shares at
any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than the forty-fifth
(45th) day following the end of the full fiscal quarter first
occurring after the first anniversary of the effective date of the
Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of any securities of the Company which are substantially similar to
the Shares, without the prior written consent of Xxxxx, Xxxxxxxx &
Xxxx, Inc., other than (i) the sale of the Shares to be sold by the
Company hereunder, (ii) the issuance of shares and the award of
options under the Company's stock plans in amounts not in excess of
the amount described in the Prospectus as available for grant under
such plans and (iii) the issuance of Shares upon the conversion of
Series A Common Stock pursuant to the terms of the Company's
Certificate of Incorporation;
(f) Not to grant options to purchase shares of Common
Stock which would become exercisable during a period beginning from
the date hereof and continuing to and including the date 90 days after
the date of the Prospectus;
(g) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash
flow of the Company and its consolidated subsidiaries certified by
independent public accountants) and to make available (within the
meaning of Rule 158(b) under the Act) as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning
13
with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable
detail;
(h) During a period of five years from the effective date
of the Registration Statement, to furnish to you upon your request
copies of all reports or other communications (financial or other)
furnished to stockholders generally, and deliver to you as soon as
they are available, copies of any publicly available reports and
financial statements furnished to or filed with the Commission, the
Nasdaq National Market or any national securities exchange on which
any class of securities of the Company is listed (such financial
statements to be on a combined or consolidated basis to the extent the
accounts of the Company and its subsidiaries are combined or
consolidated in reports furnished to its stockholders generally or to
the Commission);
(i) To use the net proceeds acquired by it from the sale
of the Shares in the manner specified in the Prospectus under the
caption "Use of Proceeds" and in a manner such that the Company will
not become an "investment company" as that term is defined in the
Investment Company Act; and
(j) Not to accelerate the vesting of any option issued
under any stock option plan such that any such option may be exercised
within 90 days from the date of the Prospectus.
7. Expenses. The Company and each of the Selling Stockholders
covenant and agree with one another and the several Underwriters that
(a) the Company and each of the Selling Stockholders (each in
proportion to the number of Shares to be sold by such party) will pay
or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with
the registration of the Shares under the Act and all other expenses in
connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) all expenses
and filing fees in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section
6(b) hereof and securing any required review by the NASD of the terms
of the sale of the Shares, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and
review and in connection with the Blue Sky survey (up to a maximum of
$5,000); (iii) the cost of preparing stock certificates; (iv) the cost
and charges of any transfer agent or registrar; and (v) all other
costs and expenses incident to the performance of the Company's
obligations hereunder which are not otherwise specifically provided
for in this Section; and (b) such Selling Stockholder will pay or
cause to be paid all costs and expenses incident to the performance of
such Selling Stockholder's obligations hereunder which are not
otherwise specifically provided for in this Section, including (i) any
fees and expenses of counsel for such Selling Stockholder, (ii) such
Selling Stockholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian, and (iii) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such
Selling Stockholder to the Underwriters hereunder. In connection with
clause (b)(iii) of the preceding sentence, Xxxxx, Xxxxxxxx & Xxxx,
Inc. agrees to pay New York State stock transfer tax, and the Selling
Stockholder agrees to reimburse Xxxxx, Xxxxxxxx & Xxxx, Inc. for
associated carrying costs if such tax payment is not rebated on the
day of payment and for any portion of such tax payment not rebated.
It is understood, however, that except as provided in clause 7(a)(ii)
14
of this Section, and Sections 9 and 12 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Shares by them,
and any advertising expenses connected with any offers they may make.
8. Conditions of Underwriters' Obligations. The obligations
of the Underwriters hereunder, as to the Shares to be delivered at
each Time of Delivery, shall be subject, in their discretion, to the
condition that all representations and warranties and other statements
of the Company and of the Selling Stockholders herein are, at and as
of such Time of Delivery, true and correct, the condition that the
Company and the Selling Stockholders shall have performed all of their
respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof, no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Xxxxxxx Procter LLP, counsel to the Underwriters,
shall have furnished to you such opinion or opinions, dated such Time
of Delivery, with respect to this Agreement, the Registration
Statement, the Prospectus, and other related matters as you may
reasonably request;
(c) Jenner & Block, LLP, counsel to the Company, shall
have furnished to you their written opinion, dated such Time of
Delivery, in form and substance reasonably satisfactory to you, with
respect to the matters set forth in Annex I hereto;
(d) Xxxxx Xxxxx Xxxxxxx LLC, counsel to each of the
Selling Stockholders, as indicated in Schedule II hereto, shall have
furnished to you their written opinion with respect to each of the
Selling Stockholders for whom they are acting as counsel, dated such
Time of Delivery, in form and substance reasonably satisfactory to
you, with respect to the matters set forth in Annex II hereto:
(e) On the date hereof and also at each Time of Delivery,
PricewaterhouseCoopers LLP, shall have furnished to you and the
Company a letter or letters, dated the respective date of delivery
thereof, in form and substance reasonably satisfactory to you, to the
effect set forth in Annex III hereto;
(f) (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, which,
singly or in the aggregate, would reasonably be expected to result or
has resulted in a Material Adverse Change, otherwise than as set forth
or contemplated in the Prospectus, and (ii) since the respective dates
as of which information is given in the Prospectus, there shall not
have been any change in the capital stock (other than issuances of
15
Common Stock pursuant to Company stock option plans described in the
Registration Statement and Prospectus or issuances of Common Stock
upon the conversion of Class A Common Stock or otherwise in connection
with the transactions contemplated by this Agreement) or long-term
debt of the Company or any Material Adverse Change, otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof there shall not have
occurred any of the following: (i) additional material governmental
restrictions, not in force and effect on the date hereof, shall have
been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the over the
counter market by the NASD, or trading in securities generally shall
have been suspended on either such Exchange or in the over the counter
market by the NASD, or a general banking moratorium shall have been
established by federal or New York authorities, (ii) a suspension or
material limitation in trading in securities generally on the Nasdaq
National Market, (iii) a suspension or material limitation in trading
in the Company's securities on the Nasdaq National Market, (iv) an
outbreak of major hostilities or other national or international
calamity or any substantial change in political, financial or economic
conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect
materially and adversely the marketability of the Shares, or (v) there
shall be any action, suit or proceeding pending or threatened, or
there shall have been any development or prospective development
involving particularly the business or properties or securities of the
Company or any of its subsidiaries or the transactions contemplated by
this Agreement, which, in the judgment of the Underwriters, has
materially and adversely affected the Company's business or earnings
and makes it impracticable or inadvisable to offer or sell the Shares;
(h) The Shares to be sold by the Company at such Time of
Delivery shall have been accepted for quotation, subject to notice of
issuance, on the Nasdaq National Market System;
(i) Each director and executive officer of the Company, in
their capacities as such, and each of the Selling Stockholders, shall
have executed and delivered to you agreements in which such holder
undertakes, for 90 days after the date of the Prospectus, subject to
certain exceptions stated therein, not to offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any shares of Common Stock, or any securities
convertible into or exchangeable for, or any rights to purchase or
acquire, shares of Common Stock, without the prior written consent of
Xxxxx, Xxxxxxxx & Xxxx, Inc.; and
(j) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling
Stockholders, respectively, reasonably satisfactory to you as to the
accuracy of the representations and warranties of the Company and the
Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance in all material respects by the
Company and the Selling Stockholders of all of their respective
obligations hereunder to be performed at or prior to such Time of
16
Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (f) of
this Section.
9. Indemnification and Contribution.
(a) The Company and each of the Selling Stockholders
(other than the Xxxxxxxxxx Family Education Trust, the Valentine
Children Stock Partnership, Xxxx Xxxxxxxxx, and Xxxx Xxxxxxxxx and
Xxxxxx Xxxxxxx) (such Selling Stockholders, hereinafter, the
"Indemnification Stockholders"), jointly and severally, will indemnify
and hold harmless each Underwriter and each person, if any, who
controls such Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto furnished by the Company, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or, in the
case of the Registration Statement or any amendment thereto, necessary
to make the statements therein not misleading and, in the case of the
Preliminary Prospectus, the Prospectus or any supplement thereto,
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that the Company and the Indemnification
Stockholders shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through Xxxxx, Xxxxxxxx & Xxxx, Inc.
expressly for use therein; provided, further, that the aggregate
liability of any such Indemnification Stockholder shall not exceed the
product of (i) the number of Shares sold by such Indemnification
Stockholder, including any Optional Shares, and (ii) the public
offering price of the Shares (net of underwriting discounts) as set
forth in the Prospectus. Notwithstanding anything to the contrary in
this Section 9(a), with respect to any untrue statement or alleged
untrue statement of a material fact contained in or omission or
alleged omission of a material fact from any Preliminary Prospectus,
the indemnity contained in this Section 9(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased the Shares concerned,
to the extent that a prospectus relating to such Shares was required
to be delivered by such Underwriter under the Act in connection with
such purchase and any such loss, claim, damage or liability of such
Underwriter results from the fact that there was not sent or given to
such person, at or prior to the written confirmation of the sale of
such Shares to such person, a copy of the Prospectus (exclusive of
material incorporated by reference) if the Company had previously
furnished copies thereof to such Underwriter.
(b) Each of the Xxxxxxxxxx Family Education Trust, the
Valentine Children Stock Partnership, Xxxx Xxxxxxxxx, and Xxxx
Xxxxxxxxx and Xxxxxx Xxxxxxx (hereinafter, the "Limited
Indemnification Stockholders"), will severally and not jointly
indemnify and hold harmless each Underwriter against any losses,
17
claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto furnished by the Company, or arise out
of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Limited
Indemnification Stockholder expressly for use therein; and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that the aggregate liability of any such Limited
Indemnification Stockholder shall not exceed the product of (i) the
number of Shares sold by such Limited Indemnification Stockholder,
including any Optional Shares, and (ii) the public offering price of
the Shares (net of underwriting discounts) as set forth in the
Prospectus. Notwithstanding anything to the contrary in this Section
9(b), with respect to any untrue statement or alleged untrue statement
of a material fact contained in or omission or alleged omission of a
material fact from any Preliminary Prospectus, the indemnity contained
in this Section 9(b) shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or
liabilities purchased the Shares concerned, to the extent that a
prospectus relating to such Shares was required to be delivered by
such Underwriter under the Act in connection with such purchase and
any such loss, claim, damage or liability of such Underwriter results
from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Shares to such
person, a copy of the Prospectus (exclusive of material incorporated
by reference) if the Company had previously furnished copies thereof
to such Underwriter.
(c) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company and each Selling Stockholder
against any losses, claims, damages or liabilities to which the
Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or, in the case of the
Registration Statement or any amendment thereto, necessary to make the
statements therein not misleading and, in the case of the Preliminary
Prospectus, the Prospectus or any supplement thereto, necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter
through Xxxxx, Xxxxxxxx & Xxxx, Inc. expressly for use therein; and
will reimburse the Company and each Selling Stockholder for any legal
or other expenses reasonably incurred by the Company or such Selling
18
Stockholder in connection with investigating or defending any such
action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof.
No indemnification provided for in subsection (a), (b) or (c) above
shall be available hereunder to any party who shall fail to give
notice as provided in the preceding sentence if, but only to the
extent that, the party to whom such notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the
notice would have related and was prejudiced by the failure to give
such notice; provided, however, that the omission so to notify the
indemnifying party shall not relieve it from any liability which it
may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the
defense thereof of the indemnified party, with nationally-recognized
counsel selected by the indemnified party, which counsel shall be
reasonably acceptable to such indemnifying party (and who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party in such action), and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense
thereof. In the event the indemnifying party does not assume the
defense of any action brought against an indemnified party, the
indemnifying party shall not, in connection with any one such action
or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable for
the fees and expenses of more than one separate firm of attorneys at
any time for all indemnified persons, except to the extent that local
counsel, in addition to regular counsel, is required in order to
effectively defend against such action or proceeding, unless (i) the
indemnifying party has agreed in writing to pay such fees and expenses
or (ii) an indemnified party reasonably determines that there may be
conflicting interests between such indemnified party and other
indemnified parties in conducting the defense of such action. No
indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party. No indemnifying party shall be liable for
any settlement of any action or claim effected without its written
consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the foregoing in this Section 9(d), the
Limited Indemnification Stockholders shall not be liable to any
indemnified party or other indemnifying party under this Section 9(d)
for any legal expenses or any other expenses incurred pursuant to this
Section 9(d).
19
(e) If the indemnification provided for in this Section 9
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a), (b) or (c) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company and such Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the
Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection
(d) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders, bear
to the total underwriting discounts and commissions received by the
Underwriters, 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, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company, each of the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to
this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include
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 subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission and (ii) no Selling Stockholder shall
be required to contribute any amount in excess of an amount equal to
the product of the number of Shares sold by the Selling Stockholder,
including any Optional Shares, and the public offering price of the
Shares (net of underwriting discounts) set forth in the Prospectus.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this subsection (e) to contribute are
several in proportion to their respective underwriting obligations and
not joint. Notwithstanding anything to the foregoing in this Section
9(e), the Limited Indemnification Stockholders shall only be required
to contribute insofar as such losses, claims, damages or liabilities
20
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto furnished by
the Company, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by
such Limited Indemnification Stockholder expressly for use therein;
and no Limited Indemnification Stockholder shall be required to
contribute any amount in excess of an amount equal to the product of
(i) the number of Shares sold by such Limited Indemnification
Stockholder, including any Optional Shares, and (ii) the public
offering price of the Shares (net of underwriting discounts) as set
forth in the Prospectus, .
(f) The obligations of the Company and the Selling
Stockholders under this Section 9 shall be in addition to any
liability which the Company and the respective Selling Stockholders
may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriter
under this Section 9 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within the
meaning of the Act.
10. Termination.
(a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a
Time of Delivery, you may in your discretion arrange for you or
another party or other parties to purchase such Shares on the terms
contained herein. If within thirty-six (36) hours after such default
by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a
further period of thirty-six (36) hours within which to procure
another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Selling
Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that
they have so arranged for the purchase of such Shares, you or the
Company and the Selling Stockholders shall have the right to postpone
such Time of Delivery for a period of not more than seven (7) days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments
to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and/or the Company and the Selling Stockholders as provided in
21
subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-tenth of the aggregate number
of all the Shares to be purchased at such Time of Delivery, then the
Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery
and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company and the Selling Stockholders as provided in
subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-tenth of the aggregate number of all
the Shares to be purchased at such Time of Delivery, or if the Company
and the Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company and
certain Selling Stockholders to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders,
except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 7 hereof and
the indemnity and contribution agreements in Section 9 hereof, but
nothing herein shall relieve a defaulting Underwriter from liability
for its default.
11. Survival. The respective indemnities, agreements,
representations, warranties and other statements of the Company, the
Selling Stockholders and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made
by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or
any officer or director or controlling person of the Company, or any
controlling person of any Selling Stockholder, and shall survive
delivery of and payment for the Shares.
12. Expenses of Termination. If this Agreement shall be
terminated pursuant to Section 10 hereof, the Company and the Selling
Stockholders shall then have no liability to any Underwriter except as
provided in Section 7 and Section 9 hereof; but, if for any other
reason this Agreement is terminated, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in
writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the
Company and the Selling Stockholders shall have no further liability
to any Underwriter in respect of the Shares not so delivered except as
provided in Section 7 and Section 9 hereof.
13. Notice. In all dealings hereunder, you shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on
behalf of any Underwriter made or given by you jointly or by Xxxxx,
22
Xxxxxxxx & Xxxx, Inc. on behalf of you as the Underwriters; and in all
dealings with any Selling Stockholder hereunder, you and the Company
shall be entitled to act and rely upon any statement, request, notice
or agreement on behalf of such Selling Stockholder made or given by
any or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent
by mail, telex or facsimile transmission to you as the Underwriters in
care of Xxxxx, Xxxxxxxx & Xxxx, Inc., 00 Xxxxx Xxxxxx, Xxxxxx, XX
00000, Attention: Xxxx Xxxxxx; if to any Selling Stockholder shall be
delivered or sent by mail, telex or facsimile transmission to counsel
for such Selling Stockholder at its address set forth in Schedule II
hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Chief Financial
Officer; provided, however, that any notice to an Underwriter pursuant
to Section 9(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in
its Underwriter's Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by you on
request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. Information Provided by the Underwriters. The Company and
the Underwriters acknowledge that, for purposes of this Agreement, the
statements set forth in the third and ninth paragraphs under the
heading "Plan of Distribution" in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the
Company by any Underwriter specifically for inclusion in the
Registration Statement or the Prospectus;
15. Miscellaneous.
(a) This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and the Selling
Stockholders and, to the extent provided in Sections 9 and 11 hereof,
the officers and directors of the Company and each person who controls
the Company, any Selling Stockholder or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
(b) Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
23
If the foregoing is in accordance with your understanding, please
sign and return to us six counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each
of the Underwriters, the Company and each of the Selling Stockholders.
It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted
to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the
signors thereof.
Any person executing and delivering this Agreement as
Attorney-in-Fact for a Selling Stockholder represents by so doing that
he has been duly appointed as Attorney-in-Fact by such Selling
Stockholder pursuant to a validly existing and binding Power-of-
Attorney which authorizes such Attorney-in-Fact to take such action.
Very truly yours,
XXXX X. XXXXXXXXXX & SON, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President Finance,
Chief Financial Officer
and Secretary
XXXXXXXXXX FAMILY EDUCATION TRUST
XXXXXXX X. XXXXXXXXX
XXXX XXXXXXXXXX IRREVOCABLE TRUST
XXXX X. XXXXXXXXXX TRUST
XXXXXXX X. XXXXXXXXXX TRUST
XXXXX X. XXXXXXXXXX TRUST
XXXXXX X. XXXXXXXXXX, XX. TRUST
TRUST FOR XXXXXXX X. XXXXXXXXX
TRUST FOR XXXXX X. XXXXXXXXX
TRUST FOR XXXX XX XXXXXXX
XXXXXXX X. XXXXXXXXX
VALENTINE CHILDREN STOCK PARTNERSHIP
XXXXXXX X. XXXXXXXXXX
XXXXXX X. XXXXXXXXXX, XX.
XXXXX X. XXXXXXXXX
XXXX XXXXXXXXX
XXXX XXXXXXXXX AND XXXXXX XXXXXXX
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Custodian for the Selling
Stockholders
24
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule II to this Agreement.
Accepted as of the date hereof
in Boston, Massachusetts
XXXXX, XXXXXXXX & XXXX, INC.,
XXXXXXX XXXXX & COMPANY, L.L.C.
By: /s/ XXXXX, XXXXXXXX & XXXX, INC.
--------------------------------
(Xxxxx, Xxxxxxxx & Xxxx, Inc. on
behalf of each of the Underwriters)
25
SCHEDULE I
Number of
Optional Shares
Total Number to be Purchased
of Firm Shares if Maximum
to be Purchased Option Exercised
--------------- ----------------
Xxxxx, Xxxxxxxx & Xxxx, Inc. 1,250,000 187,500
Xxxxxxx Xxxxx & Company, L.L.C. 750,000 112,500
--------- -------
TOTAL 2,000,000 300,000
========= ========
26
SCHEDULE II
Number of
Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
--------------- --------------
The Company. 1,000,000 150,000
The Selling Stockholder(s):
Xxxxxxxxxx Family Education Trust (1) 30,768 --
Xxxxxxx X. Xxxxxxxxx (1) 214,000 36,000
Xxxx Xxxxxxxxxx Irrevocable Trust (1) 111,200 22,800
Xxxx X. Xxxxxxxxxx Trust (1) 111,200 22,800
Xxxxxxx X. Xxxxxxxxxx Trust (1) 111,200 22,800
Xxxxx X. Xxxxxxxxxx Trust (1) 111,200 22,800
Xxxxxx X. Xxxxxxxxxx, Xx. Trust (1) 111,200 22,800
Trust For Xxxxxxx X. Xxxxxxxxx (1) 50,000 --
Trust For Xxxxx X. Xxxxxxxxx (1) 50,000 --
Trust For Xxxx Xx Xxxxxxx (1) 50,000 --
Xxxxxxx X. Xxxxxxxxx (1) 8,152 --
Valentine Children Stock Partnership (1) 3,000 --
Xxxxxxx X. Xxxxxxxxxx (1) 18,152 --
Xxxxxx X. Xxxxxxxxxx, Xx. (1) 10,152 --
Xxxxx X. Xxxxxxxxx (1) 8,152 --
Xxxx Xxxxxxxxx (1) 24 --
Xxxx Xxxxxxxxx and Xxxxxx Xxxxxxx (1) 1,600 --
--------- -------
Total 2,000,000 300,000
========= =======
(1) This Selling Stockholder is represented by Xxxxx Xxxxx
Xxxxxxx LLC and has appointed Xxxxxxx X. Xxxxxxxxx and Xxxxxx
X. Xxxxxxxxxx, Xx., as the Attorneys-in-Fact for such Selling
Stockholder.
27
ANNEX I
Form of Jenner & Block, LLC Opinion
1. The Company is a corporation duly incorporated, validly
existing and in good standing with the Secretary of State of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus. The Company is duly qualified to do business and is in
good standing in each jurisdiction within the United States in which
it maintains a manufacturing facility.
2. The authorized capitalization of the Company as of December
25, 2003 is as set forth under the caption "Capitalization" in the
Prospectus. The Shares have been duly authorized and, when issued and
delivered in accordance with the Underwriting Agreement, will be
validly issued, fully paid and nonassessable and will conform in all
material respects to the description of the capital stock contained in
the Prospectus.
3. Each domestic subsidiary of the Company is a corporation
duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its organization. All of the issued and
outstanding shares of capital stock of each such subsidiary are owned
of record by the Company or another subsidiary of the Company. Each
domestic subsidiary of the Company is duly qualified to do business
and is in good standing in each jurisdiction within the United States
in which it maintains a manufacturing facility.
4. The Company has the corporate power and authority to enter
into the Underwriting Agreement and perform its obligations thereunder
and the Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
5. The issuance and sale by the Company of the Shares and the
performance by the Company of its obligations under the Underwriting
Agreement does not and will not (i) violate the certificate of
incorporation or by-laws of the Company, (ii) breach or result in a
default under any agreement, indenture or other instrument filed as an
exhibit to the Registration Statement (except that counsel need not
express an opinion as to any financial tests or cross defaults
contained therein), or (iii) violate any existing Delaware, Illinois
or federal law, rule or administrative regulation or any decree known
to such counsel of any court or any governmental agency or body having
jurisdiction over the Company or any of its properties, except that
such counsel need express no opinion as to state securities or "Blue
Sky" laws or as to compliance with the anti-fraud provisions of
federal and state securities laws.
6. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States, the State of Delaware or the State of Illinois is
required for the issuance and sale of the Shares by the Company or the
consummation by the Company of the transactions contemplated by the
Underwriting Agreement, except the registration under the Act of the
Shares and the effectiveness of the Registration Statement under the
Act.
7. The Company is not subject to regulation as an "investment
company" under the Investment Company Act of 1940, as amended.
I-1
8. The Shares have been authorized for inclusion on the Nasdaq
National Market System, subject to notice of issuance.
9. The documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they were filed
with the Commission, appeared on their face to be responsive in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder.
Such counsel shall also state that in the course of the
preparation by the Company of the Registration Statement and the
Prospectus, they have participated in discussions with your
representatives and those of the Company and its independent
accountants in which the business and affairs of the Company and the
contents of the Registration Statement and Prospectus were discussed.
Such counsel shall state that on the basis of information that such
counsel has gained in the course of such counsel's representation of
the Company in connection with its preparation of the Registration
Statement and Prospectus and such counsel's participation in the
discussions referred to above, such counsel believes that the
Registration Statement, as of its effective date, and the Prospectus,
as of its date, complied as to form in all material respects with the
requirements of the Act and the published rules and regulations of the
Commission thereunder and such counsel does not know of any legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject that are required by
Item 103 of Regulation S-K under the Act to be described in the
Registration Statement or Prospectus that are not so described or of
any contracts or any other documents of a character required to be
filed as an exhibit to the Registration Statement or Prospectus that
are not filed as required. Further, such counsel shall state that
based on such information and participation, nothing came to the
attention of such counsel that caused such counsel to believe that (i)
the Registration Statement as of its effective date contained an
untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (ii) the Prospectus as of its date contained
or as of such Time of Delivery contains any untrue statement of a
material fact or omitted or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel need express
no opinion, however, as to the financial statements, including the
notes and schedules thereto, or any other financial or accounting
information set forth or referred to in the Registration Statement and
Prospectus.
Such counsel may state that the limitations inherent in the
independent verification of factual matters and the character of the
determinations involved in such counsel's review are such that such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements made or the information
contained in the Registration Statement and Prospectus except for
those made under the caption "Underwriting," which accurately
summarize in all material respects the provisions of the laws and
documents referred to therein.
Such counsel shall also include a statement in such opinion as to
the matters set forth in this paragraph. The Registration Statement
has become effective under the Act. To the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued by the Commission nor has any
proceeding been instituted or contemplated for that purpose under the
Act. The Prospectus has been filed with the Commission pursuant to
I-2
Rule 424(b) of the rules and regulations under the Act within the time
period required thereby.
I-3
ANNEX II
Form of Opinion of Counsel to the Selling Stockholders
1. A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Stockholder and constitute
valid and binding agreements of such Selling Stockholder in accordance
with their terms;
2. This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder; and the sale of the Shares to
be sold by such Selling Stockholder hereunder and the compliance by
such Selling Stockholder with all of the provisions of this Agreement,
the Power-of-Attorney and the Custody Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any terms or provisions of,
or constitute a default under, any statute, indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such Selling
Stockholder is a corporation, the Partnership Agreement of such
Selling Stockholder if such Selling Stockholder is a partnership, the
Trust Agreement or Declaration of Trust of such Selling Stockholder if
such Selling Stockholder is a trust, the Certificate of Formation or
Limited Liability Company Agreement of such Selling Stockholder if
such Selling Stockholder is a limited liability company, or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Stockholder or
the property of such Selling Stockholder;
3. No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
Shares to be sold by such Selling Stockholder hereunder, except such
has been duly obtained and is in full force and effect, and such as
have been obtained under the Act and the Exchange Act and such as may
be required under state securities or Blue Sky laws in connection with
the purchase and distribution of such Shares by the Underwriters;
4. Immediately prior to such Time of Delivery, such Selling
Stockholder had good and valid title to the Shares to be sold at such
Time of Delivery by such Selling Stockholder under this Agreement,
free and clear of all liens, encumbrances, equities or claims, and
full right, power and authority to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder; and
5. Good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims, has been transferred to each
of the several Underwriters who have purchased such Shares in good
faith and without notice of any such lien, encumbrance, equity or
claim or any other adverse claim within the meaning of the Uniform
Commercial Code.
II-1
ANNEX III
Pursuant to Section 8(e) of the Underwriting Agreement,
PricewaterhouseCoopers LLP shall furnish letters to the Underwriters
to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, if
applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
separately furnished to the Underwriters;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon, copies of which have been
separately furnished to the Underwriters; and on the basis of
specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (v)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year,
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Report on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
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interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations, or (ii) any
material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus, for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with
the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included in the
Prospectus or incorporated by reference to the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in
clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred
to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the
Prospectus or incorporated by reference to the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference
in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or
the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in
the consolidated capital stock (other than issuances of
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capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares
and upon conversions of convertible securities, in each
case which were outstanding on the date of the latest
financial statements included or incorporated by reference
in the Prospectus) or any increase in the combined
long-term debt of the Company and its subsidiaries, or any
decreases in combined net current assets or net assets or
other items specified by the Underwriters, or any increases
in any items specified by the Underwriters, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Underwriters, except in each case for increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vi) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (v) above, they
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Underwriters which are derived from the general
accounting records of the Company and its subsidiaries, which appear
in the Prospectus, or in Part II of, or in exhibits and schedules to,
the Registration Statement specified by the Underwriters, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
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