X. X. XXXXX CORPORATION
3,500,000 SHARES*
COMMON STOCK
UNDERWRITING AGREEMENT
, 2002
--------- --
Xxxxxx X. Xxxxx & Co. Incorporated
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
As Representatives of the Several Underwriters
Identified in Annex A Annexed Hereto
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
SECTION 1. INTRODUCTORY. X. X. Xxxxx Corporation, a Delaware
corporation (the "Company"), proposes to sell 3,500,000 shares (the "Firm
Shares") of its authorized common stock, $1.00 par value per share (the "Common
Stock"), held as treasury shares by the Company, to the several underwriters
identified in Annex A annexed hereto (the "Underwriters"), who are acting
severally and not jointly. In addition, the Company has agreed to grant to the
Underwriters an option to purchase up to 525,000 additional shares of Common
Stock (the "Optional Shares") held as treasury shares by the Company as provided
in Section 5 hereof. The Firm Shares and, to the extent such option is
exercised, the Optional Shares are hereinafter collectively referred to as the
"Shares."
You, as representatives of the several Underwriters (the
"Representatives"), have advised the Company that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon
hereafter as in your judgment is advisable and that the public offering price of
the Shares initially will be $_________ per share.
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents and warrants to, and agrees with, the several
Underwriters, and shall be deemed to represent and warrant to, and agree with,
the several Underwriters on each Closing Date (as hereinafter defined), that:
----------
* Plus an option to acquire up to 525,000 additional shares of Common Stock
from the Company to cover over-allotments.
(a) Each of the Company and its subsidiaries (individually, a
"Subsidiary" and collectively, the "Subsidiaries") is validly existing as a
corporation or limited liability company in active status or good standing under
the laws of its jurisdiction of organization, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus (as hereinafter
defined) and the Registration Statement (as hereinafter defined); each of the
Company and the Subsidiaries is duly registered and qualified to do business as
a foreign corporation under the laws of, and is in good standing as such in,
each jurisdiction in which such registration or qualification is required,
except where the failure to so register or qualify would not have a material
adverse effect on the financial condition, business, property, net worth or
results of operations of the Company and the Subsidiaries, taken as a whole
("Material Adverse Effect"). Annexed hereto as Annex B is a complete and correct
list of all of the Subsidiaries, including their jurisdiction of organization
and direct equity owners. Annex B also identifies the Subsidiary that is a
"significant subsidiary" (a "Significant Subsidiary") as defined in Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission (the "Commission").
Complete and correct copies of the certificate or articles of incorporation and
bylaws (or their equivalent), as amended or restated ("Articles of
Incorporation" and "Bylaws," respectively), of the Company and the Significant
Subsidiary as in effect on the date hereof have been made available to counsel
for the Representatives, and no changes thereto will be made on or subsequent to
the date hereof and prior to each Closing Date.
(b) The shares of Common Stock issued and outstanding
immediately prior to the sale of the Shares hereunder as set forth in the
Prospectus have been duly authorized and validly issued, are fully paid and
nonassessable (except, to the extent applicable, as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted), and conform to the description thereof contained in the Prospectus
and the Registration Statement. There are no preemptive, preferential or, except
as described in the Prospectus, other rights to subscribe for or purchase any
shares of Common Stock (including the Shares), and no shares of Common Stock
have been issued in violation of such rights. The Shares to be sold by the
Company to the Underwriters have been duly authorized and, when delivered and
paid for pursuant to this Agreement, will be validly issued, fully paid and
nonassessable (except, to the extent applicable, as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted), and will conform to the description thereof contained in the
Prospectus and the Registration Statement. The delivery of certificates for the
sale of the Shares hereunder and payment therefor pursuant to the terms of this
Agreement will pass valid title to such Shares to the Underwriters, free and
clear of any lien, claim, encumbrance or defect in title, other than any of the
foregoing created by any of the Underwriters. Except as described in the
Prospectus, there are no outstanding options, warrants or other rights of any
description, contractual or otherwise, entitling any person to be issued any
class of security by the Company, and there are no holders of Common Stock or
other securities of the Company, or of securities that are convertible or
exchangeable into Common Stock or other securities of the Company, that have
rights to the registration of such Common Stock or securities under the
Securities Act of 1933, as amended, and the regulations thereunder (together,
the "Act"), or the securities laws or regulations of any of the states of the
United States (the "Blue Sky Laws").
2
(c) Except for the Subsidiaries, and as otherwise set forth in
the Prospectus or on Annex B, the Company has no subsidiaries and does not own
any equity interest of 5% or more in or control, directly or indirectly, any
other corporation, limited liability company, partnership, joint venture,
association, trust or other business organization that is material to the
Company and its Subsidiaries on a consolidated basis. Except as set forth in the
Prospectus or on Annex B and except for director qualifying shares (if any), the
Company owns directly or indirectly through a Subsidiary all of the issued and
outstanding capital stock of each Subsidiary, free and clear of any and all
liens, claims, encumbrances or security interests, and all such capital stock
has been duly authorized and validly issued and is fully paid and nonassessable
(except, to the extent applicable, as otherwise provided in Section
180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted). There are no outstanding options, warrants or other rights of any
description, contractual or otherwise, entitling any person other than the
Company or a Subsidiary to subscribe for or purchase any shares of capital stock
of any Subsidiary.
(d) The Company has full corporate power and authority to
enter into and perform this Agreement, and the execution and delivery by the
Company of this Agreement and the performance by the Company of its obligations
hereunder and the consummation of the transactions described herein, have been
duly authorized with respect to the Company by all necessary corporate action
and will not: (i) violate any provision of the Articles of Incorporation or
Bylaws of the Company or the Significant Subsidiary; (ii) violate any provisions
of, or result in the breach, modification or termination of, or constitute a
default under, any provision of any material agreement, lease, franchise,
license, indenture, permit, mortgage, deed of trust, evidence of indebtedness or
other instrument to which the Company or the Significant Subsidiary is a party
or by which the Company or the Significant Subsidiary, or any property owned or
leased by the Company or the Significant Subsidiary, may be bound or affected;
(iii) violate any statute, ordinance, rule or regulation applicable to the
Company or the Significant Subsidiary, or order or decree of any court,
regulatory or governmental body, arbitrator, administrative agency or
instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company or the Significant Subsidiary; or (iv) result in
the creation or imposition of any material lien, charge or encumbrance upon any
property or assets of the Company or the Significant Subsidiary; except, in the
case of subsections (ii), (iii) and (iv) above, for such violations or liens,
charges or encumbrances that would not result in a Material Adverse Effect. No
consent, approval, authorization or other order of any court, regulatory or
governmental body, arbitrator, administrative agency or instrumentality of the
United States or other country or jurisdiction is required for the execution and
delivery of this Agreement by the Company, the performance of its obligations
hereunder or the consummation of the transactions contemplated hereby, except
for compliance with the Act, the Securities Exchange Act of 1934, as amended,
and the regulations thereunder (together, the "Exchange Act"), the Blue Sky Laws
applicable to the public offering of the Shares by the several Underwriters and
the clearance of such offering and the underwriting arrangements evidenced
hereby with the National Association of Securities Dealers, Inc. (the "NASD").
This Agreement has been duly executed and delivered by and on behalf of the
Company and is a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms.
(e) A registration statement on Form S-3 (Reg. No. 333-86074)
with respect to the Shares, including the related preliminary form of
prospectus, has been prepared by the Company in conformity in all material
respects with the requirements of the Act and has been
3
filed with the Commission. The conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied. Such registration statement,
as finally amended and revised at the time such registration statement was or is
declared effective by the Commission (including the information contained in the
form of final prospectus, if any, filed with the Commission pursuant to Rule
424(b) and Rule 430A under the Act and deemed to be part of the registration
statement if the registration statement has been declared effective pursuant to
Rule 430A(b)) and as thereafter amended by post-effective amendment, if any,
together with any registration statement and amendment filed pursuant to Rule
462 under the Act, is herein referred to as the "Registration Statement." The
related final prospectus in the form first filed with the Commission pursuant to
Rule 424(b) or, if no such filing is required, as included in the Registration
Statement, or any supplement thereto, is herein referred to as the "Prospectus."
The prospectus subject to completion in the form included in the Registration
Statement at the time of the initial filing of the Registration Statement with
the Commission, and each such prospectus as amended from time to time until the
date of the Prospectus, is referred to herein as the "Preliminary Prospectus."
Reference made herein to each Preliminary Prospectus or the Prospectus, as
amended or supplemented, shall include all documents and information
incorporated by reference therein and shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or Prospectus,
as the case may be, and so incorporated by reference, under the Exchange Act.
The Company has prepared and filed such amendments to the Registration Statement
since its initial filing with the Commission, if any, as may have been required
by the Act to the date hereof, and will file such additional amendments thereto
as may hereafter be required by the Act.
(f) Neither the Commission nor any state securities commission
has issued any order preventing or suspending the use of any Preliminary
Prospectus, nor, to the knowledge of the Company, have any proceedings for that
purpose been initiated or threatened. As of the effective date of the
Registration Statement, and at all times subsequent thereto up to each Closing
Date, the Registration Statement and the Prospectus conformed or will conform in
all material respects to the requirements of the Act, and neither the
Registration Statement nor the Prospectus included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The representations and warranties of the Company in this subsection
shall not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished by
the Representatives to the Company pursuant to Section 4 hereof. Neither the
Company, nor any person that controls, is controlled by (including the
Subsidiaries) or is under common control with the Company, has distributed or
will distribute prior to each Closing Date any written offering material in
connection with the offering and sale of the Shares other than a Preliminary
Prospectus, the Prospectus, the Registration Statement or other materials
permitted by the Act and provided to the Representatives.
(g) The documents that are incorporated by reference in the
Prospectus or the Registration Statement or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and any document so
filed and incorporated by reference subsequent to the effective date of the
Registration
4
Statement shall, when it is filed with the Commission, comply in all material
respects with the requirements of the Act and the Exchange Act, as applicable,
and when read together with the other information included in the Prospectus, at
the time the Registration Statement became effective, at the time the Prospectus
was issued, and at each Closing Date, did not or will 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 light of the
circumstances under which they were made, not misleading.
(h) Ernst & Young LLP, which has expressed its opinion with
respect to the consolidated financial statements and schedules of the Company
filed with the Commission or incorporated by reference and included as a part of
the Prospectus or the Registration Statement, are independent accountants with
respect to the Company and the Subsidiaries as required by the Act. To the
knowledge of the Company, Xxxxxxxxx Black Xxxxxx & Xxxx, PC, which has expressed
its opinion with respect to the financial statements of State Industries, Inc.
filed with the Commission or incorporated by reference and included as a part of
the Prospectus or the Registration Statement, are independent accountants with
respect to State Industries, Inc. as required by the Act.
(i) The consolidated financial statements of the Company and
the related notes thereto included or incorporated by reference in the
Prospectus and the Registration Statement present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Company as of their respective dates or for the respective periods covered
thereby, all in conformity with the accounting principles generally accepted in
the United States of America consistently applied throughout the periods
involved (except as otherwise noted therein). The financial statement schedules,
if any, incorporated by reference into the Registration Statement present
fairly, in all material respects, the information required to be stated therein
on a basis consistent with the consolidated financial statements of the Company
contained therein. The Company had an outstanding capitalization as set forth in
the Prospectus in the column entitled "Actual" under the caption
"Capitalization" as of the date indicated therein, and there has been no change
therein since such date, except for changes in the amount of the Company's total
debt and subsequent sales, if any, pursuant to this Agreement, pursuant to the
exercise of stock options or defined contribution or benefit plans outstanding
on the date hereof or pursuant to the conversion of shares of Class A Common
Stock of the Company. The financial and statistical information and data
relating to the Company in the Prospectus and the Registration Statement are
accurately presented in all material respects and prepared on a basis consistent
with the audited consolidated financial statements and books and records of the
Company. The consolidated financial statements and schedules of the Company and
the related notes thereto included in the Prospectus or the Registration
Statement are the only such financial statements and schedules required under
the Act to be set forth therein.
(j) Neither the Company nor the Significant Subsidiary is, or
would be with the giving of notice or passage of time or both, in violation or
in breach of: (i) its respective Articles of Incorporation or Bylaws; (ii) any
statute, ordinance, order, rule or regulation applicable to the Company or the
Significant Subsidiary; (iii) any order or decree of any court, regulatory body,
arbitrator, administrative agency or other instrumentality of the United States
or other country or jurisdiction having jurisdiction over the Company or the
Significant Subsidiary;
5
or (iv) any provision of any agreement, lease, franchise, license, indenture,
permit, mortgage, deed of trust, evidence of indebtedness or other instrument to
which the Company or the Significant Subsidiary is a party or by which any
property owned or leased by the Company or the Significant Subsidiary is bound
or affected; except, in each case above, for such violations or breaches as do
not or would not have a Material Adverse Effect. Neither the Company nor the
Significant Subsidiary has received notice of any violation of any applicable
statute, ordinance, order, rule or regulation applicable to the Company or the
Significant Subsidiary, the consequence of which would have a Material Adverse
Effect. Except where it would not have a Material Adverse Effect, (A) each of
the Company and the Significant Subsidiary has obtained and holds, and is in
compliance with, all permits, certificates, licenses, approvals, registrations,
franchises, consents and authorizations of governmental or regulatory
authorities required under all laws, rules and regulations in connection with
their businesses (hereinafter "permit" or "permits"), (B) all of such permits
are in full force and effect and (C) each of the Company and the Significant
Subsidiary has fulfilled and performed its obligations with respect to each such
permit, and no event has occurred which would result in, or after notice or
lapse of time would result in, revocation or termination of any such permit or
result in any other impairment of the rights of the holder of such permit.
Neither the Company nor any Subsidiary is or has been (by virtue of any
occurrence) in violation of any applicable foreign, federal, state, municipal or
local statutes, laws, ordinances, rules, regulations or orders (including those
relating to environmental protection, occupational safety and health and equal
employment practices) heretofore or currently in effect, the consequence of
which would have a Material Adverse Effect.
(k) There are no legal or governmental proceedings or
investigations pending or, to the knowledge of the Company, threatened to which
the Company or any Subsidiary is or may be a party or of which any property
owned or leased by the Company or any Subsidiary is or may be the subject that
are required to be described in the Registration Statement or the Prospectus but
which are not so described, or which question the validity of this Agreement or
any action taken or to be taken pursuant hereto. Except as described in the
Registration Statement or the Prospectus, neither the Company nor any
Subsidiary: (i) is in violation of any statute, ordinance, rule or regulation,
or any decision, order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or other
country or jurisdiction having jurisdiction over the Company or such Subsidiary
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environmental or human exposure
to hazardous or toxic substances (collectively, the "environmental laws"); (ii)
owns or operates any real property contaminated with any substance that is
subject to any environmental laws; (iii) is liable for any off-site disposal or
contamination pursuant to any environmental laws; or (iv) is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim contemplated by subparagraphs (i), (ii), (iii) or (iv) above
would have a Material Adverse Effect.
(l) There is no transaction, relationship, obligation,
agreement or other document required to be described in the Registration
Statement or the Prospectus or to be filed or deemed to be filed as an exhibit
to the Registration Statement by the Act that has not been described or filed as
required. All such contracts or agreements to which the Company or any
Subsidiary is a party have been duly authorized, executed and delivered by the
Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary, and are
6
enforceable by and against the Company or such Subsidiary, in accordance with
the respective terms thereof.
(m) The Company or a Subsidiary has marketable title to all
real property and good and valid title to all other property and assets
reflected as owned by the Company or such Subsidiary in the Company's
consolidated financial statements incorporated by reference into the
Registration Statement (or elsewhere in the Registration Statement or the
Prospectus), free and clear of all liens, claims, mortgages, security interests
or other encumbrance of any kind or nature whatsoever except (i) those, if any,
reflected in such financial statements (or elsewhere in the Registration
Statement or the Prospectus) or (ii) those which do not, individually or in the
aggregate, have a Material Adverse Effect. All material items of property (real
and personal) held or used by the Company or a Subsidiary under leases,
licenses, franchises or other agreements is held by the Company or such
Subsidiary under valid and binding leases, franchises, licenses or other
agreements, with such exceptions as do not have a Material Adverse Effect.
(n) Neither the Company nor any person that controls, is
controlled by (including the Subsidiaries) or is under common control with the
Company has taken during the five years prior to the date hereof or will take,
directly or indirectly, any action designed to cause or result in, or which
constituted, or which could cause or result in, stabilization or manipulation,
under the Exchange Act or otherwise, of the price of any security of the Company
to facilitate the sale or resale of the Common Stock.
(o) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in the
Registration Statement or the Prospectus and prior to each Closing Date: (i)
neither the Company nor any Subsidiary has incurred any liability or obligation,
direct or contingent, or entered into any transaction, that could reasonably be
expected to involve a Material Adverse Effect, except in the ordinary course of
business; (ii) the Company has not and will not have paid or declared any
dividend or other distribution with respect to its capital stock (other than its
regular quarterly dividend), and neither the Company nor any Subsidiary is or
will be delinquent in the payment of principal or interest on any material
outstanding debt obligation; and (iii) there has not been any change in the
terms of the capital stock, any material change in the indebtedness of the
Company or any Subsidiary, or any change or development involving or which could
be expected to involve a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business.
(p) The Company or a Subsidiary owns or possesses adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses presently used in or necessary for the conduct of its
business or ownership of its properties, and neither the Company nor any
Subsidiary has violated or infringed upon the rights of others, or received any
notice of conflict with the asserted rights of others, in respect thereof,
except for such violations or infringements as have not or would not have a
Material Adverse Effect.
7
(q) The Company and the Subsidiaries have in place and
effective such policies of insurance, with limits of liability in such amounts,
as are prudent and customary in the businesses in which they are engaged.
(r) No labor dispute with, or grievances by, the employees of
the Company or the Significant Subsidiary is pending or, to the knowledge of the
Company, is imminent that would be reasonably likely to result in a Material
Adverse Effect. Since the initial filing of the Registration Statement, there
has been no change in the relationship of the Company or any Subsidiary with any
of its principal suppliers, manufacturers, contractors or customers resulting in
or that would be reasonably likely to result in a Material Adverse Effect.
(s) The Company is not an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
(t) All federal, state and local tax returns required to be
filed by or on behalf of the Company or the Significant Subsidiary have been
filed (or are the subject of valid extension) with the appropriate federal,
state and local authorities, and all such tax returns, as filed, are accurate in
all material respects; and the Company or the Significant Subsidiary has paid
all taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable,
except for any such tax, assessment, fine or penalty that is currently being
contested in good faith or that would not have a Material Adverse Effect.
(u) The Company maintains a system of internal accounting
controls sufficient for it and the Significant Subsidiary to provide reasonable
assurances that: (i) material transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of consolidated financial statements in
conformity with generally accepted accounting principals and to maintain
accountability for material assets; (iii) access to material assets is permitted
only in accordance with management's general or specific authorizations; and
(iv) the recorded accountability for material assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(v) Other than as described in the Prospectus, none of the
Company, any Subsidiary or, to the knowledge of the Company, any officer or
director of the Company or any Subsidiary is: (i) an officer, director or
partner of any brokerage firm, broker or dealer that is a member of the NASD
("NASD member"); or (ii) directly or indirectly, a "person associated with" an
NASD member or an "affiliate" of an NASD member, as such terms are used in the
NASD Rules or Bylaws. In addition, to the knowledge of the Company, during the
twelve months prior the date hereof, neither the Company nor any Subsidiary has
issued or transferred any Common Stock, warrants, options or other securities,
or any other items of value, to any of the Underwriters or any "related person"
of any Underwriter, as such terms is used in the NASD Rules, expect as provided
in this Agreement.
8
(w) The Common Stock has been registered pursuant to Section
12(b) of the Exchange Act. The Common Stock and the Shares are authorized for
listing on the New York Stock Exchange, subject only to official notice of
issuance for shares of Common Stock that have not been issued.
(x) During the five years prior to the date hereof, all offers
and sales of the securities of and by the Company prior to the date hereof were
made in compliance in all material respects with the Act and all other
applicable state and federal laws or regulations.
(y) The Company has obtained for the benefit of the
Underwriters the agreement, substantially in the form annexed hereto as Annex C
(each, a "Lock-Up Agreement"), enforceable by Xxxxxx X. Xxxxx & Co. Incorporated
("Baird"), of each of the executive officers and directors of the Company listed
on Annex D annexed hereto, that, for a period of 90 days after the date of the
Prospectus, such persons will not, without the prior written consent of Baird or
except as permitted in the Lock-Up Agreement, directly or indirectly, offer,
sell, transfer, or pledge, contract to sell, transfer or pledge, or cause or in
any way permit to be sold, transferred, pledged, or otherwise disposed of, any:
(i) shares of Common Stock; (ii) rights to purchase shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by any such shareholder in accordance with the applicable
regulations of the Commission and shares of Common Stock that may be issued upon
the exercise of a stock option, warrant or other convertible security); or (iii)
securities that are convertible or exchangeable into shares of Common Stock. As
described more fully, and subject to the exceptions, in the Lock-Up Agreements,
the Company hereby represents and warrants that it will not release or purport
to release any person from any Lock-Up Agreement without the prior written
consent of Baird.
A certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby. A certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinion referred to in Section
8(d) will also be furnished to the Representatives and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by the Company as to the matters covered thereby.
SECTION 3. REPRESENTATION OF UNDERWRITERS. The Representatives will act
as the representatives for the several Underwriters in connection with the
public offering of the Shares, and any action under or in respect of this
Agreement taken by the Representatives will be binding upon all the
Underwriters.
SECTION 4. INFORMATION FURNISHED BY THE UNDERWRITERS. The information
set forth (i) in the second paragraph of the Table of Contents page of the
Prospectus, (ii) in the table of participating Underwriters and the third
paragraph appearing under the caption "Underwriting" in the Prospectus, and
(iii) in the last two paragraphs appearing under the caption "Underwriting" in
the Prospectus constitutes all of the information furnished to the Company by
and on behalf of the Underwriters for use in connection with the preparation of
the Registration Statement and the Prospectus, as such information is referred
to in this Agreement.
9
SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters identified in Annex A
hereto 3,500,000 Firm Shares, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company the number of Firm Shares set forth
opposite its name on Annex A at the price per share of $__________.
(b) On the First Closing Date (as hereinafter defined), the
Company will deliver to the Representatives, at the offices of Xxxxxx X. Xxxxx &
Co. Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or
through the facilities of The Depository Trust Company, for the accounts of the
several Underwriters, certificates representing the Firm Shares to be sold by
the Company against payment in Milwaukee, Wisconsin of the purchase price
therefor by wire transfer of immediately available funds payable to the order of
the Company with respect to the Firm Shares. As referred to in this Agreement,
the "First Closing Date" shall be on the fourth (or third, if the price set
forth in Section 5(a) above is determined before 3:30 p.m., Milwaukee, Wisconsin
time on the date of this Agreement) full business day after the date of the
Prospectus, at 9:00 a.m., Milwaukee, Wisconsin time, or at such other date or
time not later than ten full business days after the date of the Prospectus as
the Representatives and the Company may agree. The certificates for the Firm
Shares to be so delivered will be in denominations and registered in such names
as the Representatives request by written notice to the Company prior to the
first full business day preceding the First Closing Date, and such certificates
will be made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full business day preceding the First Closing Date
at a location to be designated by the Representatives.
(c) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to the
Underwriters, and the Underwriters, severally and not jointly, shall have the
right at any time within 30 days after the date of the Prospectus to purchase up
to 525,000 Optional Shares from the Company at the purchase price per share to
be paid for the Firm Shares, for use solely in covering any over-allotments made
by the Underwriters in the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised in whole or in part at any time (but not more
than once) upon written notice by the Representatives to the Company within 30
days after the date of the Prospectus setting forth the aggregate number of
Optional Shares to be purchased by the Underwriters and sold by the Company, the
names and denominations in which the certificates for such shares are to be
registered and the date and place at which such certificates will be delivered.
Such date of delivery (the "Second Closing Date") shall be determined by the
Representatives, provided that the Second Closing Date, which may be the same as
the First Closing Date, shall not be earlier than the First Closing Date and, if
after the First Closing Date, shall not be earlier than three nor later than ten
full business days after delivery of such notice to exercise. The number of
Optional Shares to be purchased by each of the Underwriters pursuant to such
notice shall equal that number of full Optional Shares which (as nearly as
practicable in full shares as determined by the Representatives) bears the same
proportion to the number of Firm Shares to be purchased by the Underwriter under
this
10
Agreement bears to the total number of Firm Shares. Certificates for the
Optional Shares will be made available for checking and packaging at 9:00 a.m.,
Milwaukee, Wisconsin time, on the first full business day preceding the Second
Closing Date at a location to be designated by the Representatives. The manner
of payment for and delivery of (including the denominations of and the name in
which certificates are to be registered) the Optional Shares shall be the same
as for the Firm Shares.
(d) The Representatives have advised the Company that each
Underwriter has authorized the Representatives to accept delivery of the Shares
and to make payment therefor. It is understood that the Representatives,
individually and not as the representatives of the Underwriters, may (but shall
not be obligated to) make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representatives by
the First Closing Date or the Second Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any obligation under this Agreement. As referred to in this
Agreement, "Closing Date" shall mean either the First Closing Date or the Second
Closing Date.
SECTION 6. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, the Company will use its
best efforts to cause the Registration Statement to become effective at the
earliest possible time and, upon notification from the Commission that the
Registration Statement has become effective, will so advise the Representatives
and counsel for the Underwriters promptly. If the effective time of the
Registration Statement is prior to the execution and delivery of this Agreement
and any information shall have been omitted therefrom in reliance upon Rule
430A, the Company, at the earliest possible time, will furnish the
Representatives with a copy of the Prospectus to be filed by the Company with
the Commission to comply with Rule 424(b) and Rule 430A under the Act, and, if
the Representatives do not reasonably object to the contents thereof, will
comply with such Rules. Upon compliance with such Rules, the Company will so
advise the Representatives promptly. The Company will advise the Representatives
and counsel to the Underwriters promptly of the issuance by the Commission or
any state securities commission of any stop order suspending the effectiveness
of the Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceedings
for that purpose, and will also advise the Representatives and counsel for the
Underwriters promptly of any request of the Commission for amendment or
supplement of the Registration Statement, of any Preliminary Prospectus or of
the Prospectus, or for additional information, and the Company will not file any
amendment or supplement to the Registration Statement (either before or after it
becomes effective), to any Preliminary Prospectus or to the Prospectus
(including a prospectus filed pursuant to Rule 424(b)) or file any document
under the Exchange Act before the termination or completion of the public
offering of the Shares by the Underwriters if such document would be deemed to
be incorporated by reference in the Registration Statement, if the
Representatives have not been furnished with a copy prior to such filing (with a
reasonable
11
opportunity to review such amendment or supplement) or if the Representatives
reasonably object to such filing.
(b) If, at any time when a prospectus relating to the Shares
is required by law to be delivered in connection with sales by an Underwriter or
dealer, any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact, or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to supplement the Prospectus to comply with the Act
or to file under the Exchange Act any document which would be deemed to be
incorporated by reference in the Registration Statement to comply with the Act
or the Exchange Act, the Company promptly will advise the Representatives and
counsel for the Underwriters thereof and will promptly prepare and file with the
Commission, at the Company's expense, an amendment to the Registration Statement
or file such document which will correct such statement or omission or an
amendment which will effect such compliance; and, if any Underwriter is required
to deliver a prospectus after the effective date of the Registration Statement,
the Company, upon request of the Representatives, will prepare promptly such
prospectus or prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act. The Company consents to the use, in
accordance with the provisions of the Act and with the Blue Sky Laws of the
jurisdictions in which the Shares are offered by the several Underwriters and by
dealers, of each Preliminary Prospectus.
(c) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, acquire any of the Common Stock nor will the
Company declare or pay any dividend or make any other distribution upon its
Common Stock payable to shareholders of record on a date prior to such earlier
date, except as described in the Prospectus.
(d) The Company will make generally available to its security
holders and the Representatives an earnings statement as soon as practicable,
but in no event later than 60 days after the end of its fiscal quarter in which
the first anniversary of the effective date of the Registration Statement
occurs, covering a period of 12 consecutive calendar months beginning after the
effective date of the Registration Statement, which will satisfy the provisions
of the last paragraph of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the Company
will furnish to the Representatives, at the expense of the Company, copies of
the Registration Statement, the Prospectus, any Preliminary Prospectus and all
amendments and supplements to any such documents, including any document filed
under the Exchange Act and deemed to be incorporated by reference in the
Registration Statement, in each case as soon as available and in such quantities
as the Representatives may reasonably request.
(f) The Company will apply the net proceeds from the sale of
the Shares hereunder for the purposes set forth in the Prospectus.
12
(g) The Company will cooperate with the Representatives and
counsel for the Underwriters in qualifying or registering the Shares for sale
under the Blue Sky Laws of such jurisdictions as the Representatives designate,
and will continue such qualifications or registrations in effect so long as
reasonably requested by the Representatives to effect the distribution of the
Shares. The Company shall not be required to qualify as a foreign corporation or
to file a general consent to service of process in any such jurisdiction where
it is not presently qualified. In each jurisdiction where any of the Shares
shall have been qualified as provided above, the Company will file such reports
and statements as may be required to continue such qualification for a period of
not less than one year from the date of this Agreement. Until the termination of
the offering of the Shares, the Company shall promptly prepare and file with the
Commission, from time to time, such reports as may be required to be filed by
the Act and the Exchange Act, and the Company shall comply in all material
respects with the undertakings given by the Company in connection with the
qualification or registration of the Shares for offering and sale under the Blue
Sky Laws.
(h) During the period of three years from the date of the
Prospectus, the Company will furnish to each of the Representatives each report,
statement or other document of the Company or its Board of Directors mailed to
its shareholders or publicly filed with the Commission.
(i) Except for the issuance and sale by the Company of Common
Stock upon exercise of currently outstanding stock options, the sale of the
Shares pursuant to this Agreement, the issuance of Common Stock under the
Company's defined contribution or benefit plans, the grant of stock options
pursuant to the Company's stock option plans and the issuance of Common Stock
upon the conversion of shares of Class A Common Stock of the Company, the
Company shall not, for a period of 90 days after the date of the Prospectus,
without the prior written consent of Baird, directly or indirectly, offer, sell
or otherwise dispose of, contract to sell or otherwise dispose of, or cause or
in any way permit to be sold or otherwise disposed of, any: (i) shares of Common
Stock; (ii) rights to purchase shares of Common Stock; or (iii) securities that
are convertible or exchangeable into shares of Common Stock.
(j) The Company will maintain a transfer agent and, if
required by law or the rules of the New York Stock Exchange or any national
securities exchange on which the Common Stock is listed, a registrar (which, if
permitted by applicable laws and rules, may be the same entity as the transfer
agent) for its Common Stock.
(k) If the sale to the Underwriters of the Firm Shares is not
consummated for any reason other than termination of this Agreement pursuant to
Section 11 hereof, without limiting any other rights the Underwriters may have,
the Company agrees to reimburse the Underwriters upon demand for all reasonable
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel for the Underwriters) that shall have been incurred by the
Underwriters in connection with the proposed purchase and sale of the Firm
Shares, provided that such out-of-pocket expenses shall not exceed $50,000, and
the provisions of Section 7 and 10 hereof shall at all times be effective and
apply.
13
(l) The Company will use its commercially reasonable efforts
to fulfill or cause to be fulfilled the conditions to the obligations of the
Underwriters in Section 8 hereof.
(m) The Company will deliver to the Representatives as many
(i) conformed copies of the Registration Statement (as originally filed) (one of
which shall be manually signed), (ii) conformed copies of each amendment thereto
(including exhibits filed therewith and documents incorporated therein by
reference) (one of which shall be manually signed), and (iii) copies of each
Prospectus and Preliminary Prospectus, in each case as the Representatives may
reasonably request.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees and expenses incurred in incident to the performance of its obligations
under this Agreement. Such costs, fees and expenses to be paid by the Company
include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of counsel for
the Underwriters, but including such fees and disbursements described in
subsection (b) of this Section 7) incurred in connection with the performance of
the Company's obligations hereunder, including, without limiting the generality
of the foregoing: the registration fees related to the filing of the
Registration Statement with the Commission; the fees and expenses related to the
listing of the Shares on the New York Stock Exchange; the fees and expenses of
the Company's counsel, accountants, transfer agent and registrar; the costs and
expenses incurred in connection with the preparation, printing, shipping and
delivery of the Registration Statement, each Preliminary Prospectus and the
Prospectus (including all exhibits and financial statements) and all amendments
and supplements provided for herein and this Agreement, including, without
limitation, shipping expenses via overnight delivery and/or courier service to
comply with applicable prospectus delivery requirements (provided, however, that
the Company shall only be liable for the costs of shipping such materials to the
Underwriters and not to the customers or clients of the Underwriters); and the
costs and expenses associated with the production of materials related to, and
travel expenses incurred by the management of the Company in connection with,
the various meetings to be held between the Company's management and prospective
investors.
(b) All registration fees and expenses, including legal fees
(of up to $10,000) and disbursements of counsel for the Underwriters incurred in
connection with qualifying or registering all or any part of the Shares for
offer and sale (or otherwise preparing and filing notices, applications and
other forms) under the Blue Sky Laws, preparing and delivering the Preliminary
and Supplemental Blue Sky Memoranda and the clearing of the public offering and
underwriting arrangements evidenced hereby with the NASD.
(c) All fees and expenses related to printing of the
certificates for the Shares, and all transfer taxes, if any, with respect to the
sale and delivery of the Shares.
14
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters under this Agreement shall be subject to
the accuracy of the representations and warranties on the part of the Company
herein set forth as of the date hereof and as of each Closing Date, to the
accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance in all material respects by the Company of
its obligations hereunder, and to the following additional conditions, unless
waived in writing by the Representatives:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 5:30 p.m., Washington, D.C. time, on
the date of this Agreement, or such later time and date as shall have been
consented to by the Representatives, which consent shall be deemed to have been
given if the Registration Statement shall have been declared effective on or
before the date and time requested in the acceleration request submitted on
behalf of the Representatives pursuant to Rule 461 under the Act; all filings
required by Rules 424(b) and 430A under the Act shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the Commission or any state securities commission nor, to the
knowledge of the Company, shall any proceedings for that purpose have been
instituted or threatened; and any request of the Commission or any state
securities commission for inclusion of additional information in the
Registration Statement, or otherwise, shall have been complied with to the
reasonable satisfaction of the Representatives acting in good faith.
(b) Subsequent to the execution of this Agreement,
(i) there shall not have occurred any change or
development involving, or which could be reasonably expected to involve, a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, and
(ii) the Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood, windstorm, accident or
other calamity (whether or not insured) or from any court or governmental
action, order or decree having a Material Adverse Effect,
the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the reasonable and good faith opinion of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
(c) The Representatives shall not have advised the Company
that the Registration Statement or Prospectus contains an untrue statement of
fact that, in the reasonable and good faith opinion of the Representatives or
counsel for the Underwriters, is material or omits to state a fact that, in the
reasonable and good faith opinion of the Representatives or such counsel, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
15
(d) The Representatives shall have received opinions of Xxxxx
& Lardner, special counsel for the Company (as to the matters set forth below in
subsections (i), (ii), (vi), (viii), (ix) and (xiv)), and the Vice President,
General Counsel and Secretary of the Company (as to the matters set forth in
subsections (iii), (iv), (v), (vii), (x), (xi), (xii) and (xiii) addressed to
the Representatives, as the representatives of the Underwriters, and dated the
First Closing Date or the Second Closing Date, as the case may be, to the effect
that:
(i) The Company is validly existing as a corporation
in good standing under the laws of Delaware, with full corporate power and
authority to own, lease and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and the Registration
Statement;
(ii) The authorized capital stock of the Company
consists of 60,000,000 shares of Common Stock, par value $1.00 per share,
14,000,000 shares of Class A common stock, par value $5.00 per share, and
77,000,000 shares of preferred stock, $1.00 par value per share;
(iii) The issued and outstanding shares of capital
stock of the Company immediately prior to the sale of the Shares hereunder have
been duly authorized and validly issued, are fully paid and nonassessable
(except, to the extent applicable, as otherwise provided in Section
180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted), and, to such counsel's knowledge, there are no preemptive,
preferential or, except as described in the Prospectus, other rights to
subscribe for or purchase any shares of capital stock of the Company and, to
such counsel's knowledge, no shares of capital stock of the Company have been
issued in violation of such rights;
(iv) The Significant Subsidiary is validly existing
as a corporation in good standing or active status under the laws of Tennessee,
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in the
Prospectus and the Registration Statement; to such counsel's knowledge, the
Company owns directly or indirectly and beneficially all of the issued and
outstanding capital stock of the Significant Subsidiary;
(v) The certificates for the Shares to be delivered
hereunder conform in all material respects to the requirements of the Delaware
General Corporation Law and the rules and regulations of the New York Stock
Exchange; and when duly countersigned by the Company's transfer agent, and
delivered to the Representatives or upon the order of the Representatives
against payment of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable (except, to the
extent applicable, as otherwise provided in Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law, as judicially interpreted);
16
(vi) The Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened by the Commission; the
Registration Statement and the Prospectus and any amendment or supplement
thereto, including any document incorporated by reference into the Registration
Statement (except for the financial statements and schedules and other
statistical or financial data included therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act; the conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied;
(vii) To such counsel's knowledge, there are no
pending or threatened legal or governmental proceedings that are required to be
described in the Registration Statement or the Prospectus that are not so
described, nor, to such counsel's knowledge, is there any transaction,
relationship, agreement, contract or other document of a character required to
be described in the Registration Statement or the Prospectus, or required to be
filed under the Exchange Act if upon such filing they would be incorporated, in
whole or in part, by reference therein, or to be filed as an exhibit to or
incorporated by reference in the Registration Statement by the Act, which is not
described, filed or incorporated by reference required;
(viii) Statements set forth in the Prospectus under
the heading "Description of Capital Stock," in the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A, filed with
the Commission on December 9, 1994, and in the Registration Statement under Item
15 insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings;
(ix) The Company has full corporate power and
authority to enter into and perform this Agreement; the performance of the
Company's obligations hereunder and the consummation of the transactions
described herein have been duly authorized by the Company by all necessary
corporate action and this Agreement has been duly executed and delivered by and
on behalf of the Company, and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except
that rights to indemnity or contribution hereunder may be limited by applicable
law and except as to enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and by equitable principles limiting the
right to specific performance or other equitable relief; and, to such counsel's
knowledge, no consent, approval, authorization or other order or decree of any
court, regulatory or governmental body, arbitrator, administrative agency or
other instrumentality of the United States having jurisdiction over the Company,
is required for the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement (except for compliance with
the Act, the Exchange Act, applicable Blue Sky Laws and the clearance of the
underwriting arrangements with the NASD);
(x) The execution, delivery and performance of this
Agreement by the Company will not: (A) violate any provisions of the Articles of
Incorporation or Bylaws of the Company or the Significant Subsidiary; (B)
violate any of the provisions of, or result in the
17
breach, modification or termination of, or constitute a default under, any
agreement, lease, franchise, license, indenture, permit, mortgage, deed of
trust, other evidence of indebtedness or other instrument to which the Company
or the Significant Subsidiary is a party or by which the Company or the
Significant Subsidiary, or any of their respective owned or leased property is
bound, and which is filed or incorporated by reference as an exhibit to the
Registration Statement; or (C) violate any statute, ordinance, order, rule,
decree or regulation of any court, regulatory or governmental body, arbitrator,
administrative agency or other instrumentality of the United States having
jurisdiction over the Company or the Significant Subsidiary (assuming compliance
with all applicable federal and state securities laws);
(xi) To such counsel's knowledge, there are no
holders of Common Stock or other securities of the Company, or securities that
are convertible or exchangeable into Common Stock or other securities of the
Company, that have rights to the registration of such securities under the Act
or any Blue Sky Laws;
(xii) The Shares are authorized for trading on the
New York Stock Exchange;
(xiii) To such counsel's knowledge, neither the
Company nor the Significant Subsidiary is, nor with the giving of notice or
passage of time or both would be, in violation of its respective Articles of
Incorporation or Bylaws; and
(xiv) The Company is not an "investment company," as
such term is defined in the Investment Company Act of 1940, as amended.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of auditors for the Company and representatives of the
Underwriters and their counsel during which the content of the Registration
Statement and the Prospectus and related matters were discussed and reviewed,
and that, although such counsel is not verifying, is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained or incorporated by reference into the Registration
Statement or the Prospectus, on the basis of the information that was developed
in the course of the performance of such services, they have no reason to
believe that the Registration Statement including any document incorporated by
reference therein, on its effective date, contained any untrue statement of
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, or any amendment or supplement thereto including any
document incorporated by reference therein, as of its issue date and as of the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (provided that such counsel need express no belief regarding the
financial statements and related schedules and other financial or statistical
data contained in the Registration Statement, any amendment thereto including
any document incorporated by reference therein, or the Prospectus, or any
amendment or supplement thereto including any document incorporated by reference
therein).
18
To the extent that any of such opinions are stated to be based
upon such counsel's knowledge or to be given "to the knowledge of such counsel,"
such qualification shall signify that no information has come to the attention
of the attorneys in such firm who have been involved in the preparation or
review of the Registration Statement or the Prospectus that would give them
actual current knowledge of the existence or absence of such matter in question.
In rendering such opinion, counsel for the Company may rely,
to the extent counsel deems such reliance proper, as to matters of fact upon
certificates of officers of the Company and any governmental officials, and
copies of all such certificates shall be furnished to the Representatives and
for the Underwriters on or before each Closing Date.
(e) The Representatives shall have received an opinion of
Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel for the Underwriters, dated the First
Closing Date or the Second Closing Date, as the case may be, with respect to the
sale of the Shares hereunder, the Registration Statement and other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have exhibited to them
such papers and records as such counsel reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Representatives shall have received on each Closing
Date, a certificate of Xxxxxxx X. Xxxxxxx, Senior Vice President and Chief
Financial Officer, and W. Xxxxx Xxxxxxx, Vice President, General Counsel and
Secretary, of the Company, in their respective capacities as such, to the effect
that:
(i) The representations and warranties of the Company
set forth in Section 2 hereof are true and correct as of the date of this
Agreement and as of the date of such certificate, and the Company has complied
in all material respects with all the agreements and satisfied all the
conditions to be performed or satisfied by it at or prior to the date of such
certificate;
(ii) The Commission has not issued an order
preventing or suspending the use of the Prospectus or any Preliminary Prospectus
or any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the
knowledge of the respective signatories, no proceedings for that purpose have
been initiated or are pending under the Act or under the Blue Sky Laws of any
jurisdiction;
(iii) Each of the respective signatories has examined
the Registration Statement and the Prospectus, and any amendment or supplement
thereto, including any documents filed under the Exchange Act and deemed to be
incorporated by reference in the Registration Statement, and such documents
contain all statements of material fact required to be stated therein, and do
not include 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, and since the date on which the Registration Statement
was initially filed, no event has occurred that was required to be set forth in
an amended or supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth, and there has been no
19
document required to be filed under the Exchange Act that upon such filing would
be deemed to be incorporated by reference in the Registration Statement that has
not been so filed; and
(iv) Since the date hereof, there shall not have
occurred any change or development involving, or which could be reasonably
expected to involve, a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as disclosed in the
Prospectus and the Registration Statement as heretofore amended or as disclosed
in an amendment or supplement thereto filed with the Commission and delivered to
the Representatives after the execution of this Agreement. Since the date
hereof, there shall not have occurred any of the following, such that when
aggregated would have, or which could be reasonably expected to have, a material
effect on the financial condition, business, property, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole: (A) except as
so disclosed or in the ordinary course of business, the Company has incurred any
liability or obligation, direct or indirect, or entered into any transaction
that is material to the Company; (B) except as so disclosed, there has been any
change in the outstanding capital stock of the Company (other than the grant of
stock options under presently existing stock option plans, the issuance of
shares of common stock upon exercise of currently outstanding stock options, the
issuance of shares of Common Stock under the Company's defined contribution or
benefit plans, or the issuance of shares of Common Stock pursuant to the
conversion of shares of Class A Common Stock of the Company), or any change that
is material to the Company in the short-term funded debt or long-term debt of
the Company; (C) except as so disclosed, the Company has acquired any of the
Common Stock or other capital stock of the Company or the Company has declared
or paid any dividend (other than its regular quarterly dividend), or made any
other distribution, upon its outstanding Common Stock payable to shareholders of
record on a date prior to such Closing Date; (D) except as so disclosed, the
Company has incurred any material contingent obligations, or material litigation
is pending or threatened against the Company; and (E) except as so disclosed,
the Company has sustained any material loss or interference from any strike,
fire, flood, windstorm, accident or other calamity (whether or not insured) or
from any court or governmental action, order or decree.
The delivery of the certificate provided for in this
subsection (f) shall be and constitute a representation and warranty of the
Company as to the facts required in the immediately foregoing clauses (i), (ii),
(iii), and (iv) to be set forth in said certificate.
(g) At the time this Agreement is executed and also on each
Closing Date, there shall be delivered to the Representatives a letter addressed
to the Representatives, as the representatives of the Underwriters, from Ernst &
Young LLP, the Company's independent accountants, the first letter to be dated
the date of this Agreement, the second letter to be dated the First Closing Date
and the third letter (if applicable) to be dated the Second Closing Date, which
letters shall be in form and substance reasonably satisfactory to the
Representatives, acting in good faith and shall contain information as of a date
within five days of the date of such letters. There shall not have been any
change or decrease in any specified items relating to the Company or the
Subsidiaries set forth in any of the letters referred to in this subsection (g)
which makes it impracticable or inadvisable in the reasonable and good faith
judgment of the Representatives to proceed with the public offering or purchase
of the Shares as contemplated thereby.
20
(h) At the time this Agreement is executed and also on each
Closing Date, there shall be delivered to the Representatives a letter addressed
to the Representatives, as the representatives of the Underwriters, from
Xxxxxxxxx Black Xxxxxx & Xxxx, PC, State Industries, Inc.'s independent
accountants, the first letter to be dated the date of this Agreement, the second
letter to be dated the First Closing Date and the third letter (if applicable)
to be dated the Second Closing Date, which letters shall be in form and
substance satisfactory to the Representatives, acting in good faith and shall
contain information as of a date within five days of the date of such letters.
There shall not have been any change or decrease in any specified items relating
to State Industries, Inc. set forth in any of the letters referred to in this
subsection (h) which makes it impracticable or inadvisable in the good faith
judgment of the Representatives to proceed with the public offering or purchase
of the Shares as contemplated thereby.
(i) The Shares shall have been qualified or registered for
sale under the Blue Sky Laws (or exempt from such qualification or registration)
of such jurisdictions as shall have been specified by the Representatives, and
the Shares shall have been authorized for listing on the New York Stock Exchange
and the Common Stock shall remain registered under the Exchange Act.
(j) Such further certificates and documents as the
Representatives may reasonably request (including certificates of officers of
the Company).
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Representatives and Xxxxxxx Xxxx & Friedrich LLP, counsel for the Underwriters,
each acting reasonably under the circumstances. The Company shall furnish the
Representatives with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Representatives may reasonably
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied, this Agreement
at the election of the Representatives will terminate upon notification to the
Company without liability on the part of any Underwriter, including the
Representatives, or the Company except for the provisions of Section 6(k) hereof
and the expenses to be paid by the Company pursuant to Section 7 hereof and
except to the extent provided in Section 10 hereof.
SECTION 9. MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT. The
Company will use its reasonable best efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement, and, if such
stop order is issued, to obtain as soon as possible the lifting thereof.
SECTION 10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each director, member, partner or officer
thereof) who controls any Underwriter within the meaning of the Act or the
Exchange Act from and against any losses,
21
claims, damages, expenses, liabilities or actions in respect thereof ("Claims"),
joint or several, to which such Underwriter or each such controlling person may
become subject under the Act, the Exchange Act, Blue Sky Laws or other federal
or state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation), insofar as such Claims arise out
of or are based upon any breach of any representation, warranty or covenant made
by the Company in this Agreement, or any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any application filed under any Blue Sky Law or other document executed by
the Company for that purpose or based upon written information furnished by the
Company and filed in any state or other jurisdiction to qualify any or all of
the Shares under the securities laws thereof (any such document, application or
information being hereinafter called a "Blue Sky Application") or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and the Company further agrees to reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or any such controlling person in connection with
investigating or defending any such Claim as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or supplement
thereto or in any Blue Sky Application in reliance upon and in conformity with
the written information furnished to the Company pursuant to Section 4 of this
Agreement; and provided further that the Company shall not be liable in any such
case for any Claim arising out of any such defect or alleged defect in any
Preliminary Prospectus if a copy of the Prospectus shall not have been given or
sent by or on behalf of such Underwriter to the person asserting such Claim as
determined by a court of competent jurisdiction, if required by law to have been
delivered, at or prior to the written confirmation of the sale of the Shares to
such person, to the extent that the Prospectus would have cured such defect or
alleged defect giving rise to such Claim as determined by a court of competent
jurisdiction. The indemnification obligations of the Company as provided above
are in addition to and in no way limit any liabilities the Company may otherwise
have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors and each of its
officers who signs the Registration Statement, and each person if any who
controls the Company within the meaning of the Act or the Exchange Act, from and
against any Claim to which the Company, or any such director, officer or
controlling person may become subject, under the Act, the Exchange Act, Blue Sky
Laws or other federal or state statutory laws or regulations, at common law or
otherwise (including payments made in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter and Baird),
insofar as such Claim arises out of or is based upon any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or in any Blue Sky Application, in reliance solely upon and in
conformity with the written information furnished by the Representatives to the
Company pursuant to Section 4 of this Agreement, and from and against any Claim
to the extent that such Claim results from the failure of an Underwriter to
deliver a Prospectus, if the person asserting such Claim purchased Shares
22
from such Underwriter and a copy of the Prospectus (as then amended if the
Company shall have furnished any amendments thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Shares to
such person, and if the Prospectus (as so amended) would have cured the defect
giving rise to such Claim. Each Underwriter will severally reimburse any legal
or other expenses reasonably incurred by the Company, or any such director,
officer or controlling person in connection with investigating or defending any
such Claim as such expenses are incurred. The indemnification obligations of
each Underwriter as provided above are in addition to any liabilities any such
Underwriter may otherwise have. Notwithstanding the provisions of this Section,
no Underwriter shall be required to indemnify or reimburse the Company, or any
officer, director or controlling person, pursuant to this Agreement in an
aggregate amount in excess of the total price at which the shares purchased by
any such Underwriter hereunder were offered to the public, less the amount of
any damages such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action in respect of a Claim, such
indemnified party will, if a Claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve an indemnifying party from any liability it may have to
any indemnified party under this Section or otherwise, except to the extent the
indemnifying party is materially prejudiced thereby. In case any such action is
brought against any indemnified party, and such indemnified party notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that he, she or it may wish,
jointly with all other indemnifying parties, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to the
indemnified party and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the legal fees of more than one
separate counsel, approved by Xxxxxx X. Xxxxx & Co. Incorporated, if one or more
of the Underwriters or their controlling persons are the indemnified parties).
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action 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 an indemnified party.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the
23
indemnifying party will not be liable to such indemnified party under this
Section for any legal fees or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, unless:
(i) The indemnified party shall have employed
separate counsel in connection with the assumption of legal defenses in
accordance with the proviso to the second to last sentence of subsection (c) of
this Section (it being understood, however, that the indemnifying party shall
not be liable for the legal fees of more than one separate counsel, approved by
Baird, if one or more of the Underwriters or their controlling persons are the
indemnified parties);
(ii) The indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the indemnified party's notice
to the indemnifying party of commencement of the action; or
(iii) The indemnifying party has authorized the
employment of counsel at the expense of the indemnifying party.
(e) If the indemnification provided for in this Section is
unavailable to an indemnified party under subsection (a) or (b) hereof in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) In such proportion as is appropriate to reflect
the relative benefits received by the Company and the Underwriters from the
offering of the Shares; or
(ii) If the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above, but also
the relative fault of the Company and the Underwriters in connection with the
statements or omissions that resulted in such Claim, as well as any other
relevant equitable considerations.
The relative benefits received by each of the Company and the
Underwriters shall be deemed to be in such proportion so that the Underwriters
are responsible for that portion represented by the percentage that the amount
of the underwriting discounts and commissions per share appearing on the cover
page of the Prospectus bears to the public offering price per share appearing
thereon, and the Company (including its officers and directors and controlling
persons), is responsible for the remaining portion. The relative fault of the
Company and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
Claims referred to above shall be deemed to include, subject to the limitations
set forth in subsections (c) and (d) of this
24
Section, any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim.
(f) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section were determined
by pro rata or per capita allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method or allocation which does not
take into account the equitable considerations referred to in subsection (c) of
this Section. Notwithstanding the other provisions of this Section, no
Underwriter shall be required to contribute any amount that is greater than the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section are several in proportion to their
respective underwriting commitments and not joint.
SECTION 11. DEFAULT OF UNDERWRITERS. It shall be a condition to the
obligations of each Underwriter to purchase the Shares in the manner as
described herein, that, except as hereinafter provided in this Section, each of
the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on either
the First Closing Date or the Second Closing Date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, the Representatives
may make arrangements for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date the nondefaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Shares
which such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number of
Shares with respect to which such default or defaults occur is greater than 10%
of the total number of Shares which the Underwriters are obligated to purchase
on such Closing Date, and arrangements satisfactory to the Representatives for
the purchase of such Shares by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company except for the expenses to be paid by
the Company pursuant to Section 7 hereof and except to the extent provided in
Section 10 hereof.
In the event that Shares to which a default relates are to be purchased
by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, for not more than seven business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an
25
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 12. EFFECTIVE DATE. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. Such
execution and delivery shall include an executed copy of this Agreement sent by
telecopier, facsimile transmission or other means of transmitting written
documents.
SECTION 13. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Representatives prior to or on the First Closing Date, and the
over-allotment option from the Company referred to in Section 5 hereof, if
exercised, may be canceled by the Representatives at any time prior to or on the
Second Closing Date, if in the reasonable and good faith judgment of the
Representatives, payment for and delivery of the Shares is rendered
impracticable or inadvisable because:
(a) Additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon the trading in
securities generally, or since the date hereof, minimum or maximum prices or
maximum ranges for prices shall have been generally established on the New York
Stock Exchange, trading in securities generally shall have been suspended or
materially limited on any of the New York Stock Exchange, the American Stock
Exchange or on The Nasdaq Stock Market, trading in the Common Stock of the
Company shall have been suspended by the Commission or the New York Stock
Exchange, or a general banking moratorium shall have been established by either
federal or state authorities in New York or Wisconsin;
(b) Any event shall have occurred or shall exist which makes
untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or which is not reflected in the
Registration Statement but should be reflected therein to make the statements or
information contained therein not misleading in any material respect;
(c) After the date hereof, there has occurred any change or
development involving, or which could reasonably be expected to involve, a
Material Adverse Effect, whether or not arising in the ordinary course of
business; or
(d) After the date hereof, there is an outbreak or material
escalation of hostilities or other national or international calamity or crisis,
the declaration by the United States of a national emergency or war, or any
change in political, financial or economic conditions shall have occurred or
shall have accelerated to such extent, in the reasonable and good faith judgment
of the Representatives, as to have a material adverse effect on the financial
markets of the United States, or to make it impracticable or inadvisable to
proceed with the completion of the sale of and payment for the Shares as
provided in this Agreement.
Any termination pursuant to this Section shall be without liability on
the part of any Underwriter to the Company, or on the part of the Company to any
Underwriter, except for expenses to be paid by the Company pursuant to Section 7
hereof or reimbursed by the Company
26
pursuant to Section 6(k) hereof and except as to indemnification to the extent
provided in Section 10 hereof.
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company, of its officers or directors, and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of its or their partners, officers,
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder.
SECTION 15. NOTICES. All communications hereunder will be in writing
and will be mailed, delivered, or telecopied (with receipt confirmed):
To the Representatives: Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Managing Director
with a copy to: Xxxxxxx Xxxx & Friedrich LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax No.: ( 000) 000-0000
Attention: Xxx X. Xxxxxxxxx
To the Company: X. X. Xxxxx Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. X'Xxxxx, Chairman,
President and CEO
and to: X. X. Xxxxx Corporation
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx, Vice President,
General Counsel and Secretary
with a copy to: Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Quick
27
SECTION 16. PARTIES AND SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 10 hereof.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect to this Agreement or any provision
herein contained. The term "successors" shall not include any purchaser of the
Shares as such from any of the Underwriters merely by reason of such purchase.
SECTION 17. PARTIAL UNENFORCEABILITY. If any Section, paragraph, clause
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other Section, paragraph, clause or provision hereof.
SECTION 18. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts that together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto.
[SIGNATURE PAGE FOLLOWS.]
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including the Representatives, all in accordance with its terms.
Very truly yours,
X. X. XXXXX CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
XXXXXX X. XXXXX & CO. INCORPORATED
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BANK OF AMERICA SECURITIES LLC
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BEAR XXXXXXX & CO. INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
29
ANNEX A
Name of Underwriter Number of Firm Shares to be Purchased
------------------- -------------------------------------
Xxxxxx X. Xxxxx & Co. Incorporated
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
--------
Total
========
X-0
XXXXX X
XXXXXXXXXXXX
Xxxxx or Country Equity Owner
Subsidiary of Organization (Including %)
---------- ---------------- ----------------
AOS Holding Company Delaware The Company (100%)
X. X. Xxxxx International Corporation Delaware The Company (100%)
APCOM, Inc. Tennessee The Company (100%)(2)
State Industries, Inc.(1) Tennessee The Company (100%)
X. X. Xxxxx Export, Ltd. Barbados The Company (100%)
X. X. Xxxxx Holdings (Barbados) SRL Barbados The Company (100%)
X. X. Xxxxx Enterprises Ltd. Canada The Company (100%)
X. X. Xxxxx (China) Water Heater Co., Ltd. China The Company (100%)
X. X. Xxxxx Electrical Products (Shenzhen) Co., Ltd. China The Company (100%)(2)
X. X. Xxxxx L'eau Chaude S.a.r.l. France The Company (100%)(2)
X. X. Xxxxx Warmwasser-Systemtechnik GmbH Germany The Company (100%)(2)
X. X. Xxxxx Electrical Products Limited Liability Company Hungary The Company (100%)
X. X. Xxxxx Electric Motors (Ireland) Ltd. Ireland The Company (100%)(2)
X. X. Xxxxx Holdings (Ireland) Ltd. Ireland The Company (100%)
IG-Mex, S.A. de C.V. Mexico The Company (100%)(2)
Motores Electricos xx Xxxxxx, X.X. de C.V. Mexico The Company (100%)(2)
Motores Electricos de Monterrey, S.A. de C.V. Mexico The Company (100%)(2)
Productos de Agua, S.A. de C.V. Mexico The Company (100%)(2)
Productos Electricos Aplicados, S.A. de C.V. Mexico The Company (100%)(2)
X. X. Xxxxx Electrical Products B.V. The Netherlands The The Company (100%)
X.X. Xxxxx Water Products Company B.V. Netherlands The The Company (100%)
X.X. Xxxxx Holdings B.V. Netherlands The The Company (100%)(2)
X.X. Xxxxx Products v.o.f. Netherlands The Company (100%)(2)
X. X. Xxxxx Electrical Products (S.E.A.) Pte Ltd. Singapore The Company (100%)
X. X. Xxxxx Electrical Products Limited United Kingdom The Company (100%)
State Water Heaters (U.K.) Limited United Kingdom The Company (100%)(2)
----------
(1) Denotes a "Significant Subsidiary" of the Company for purposes of this
Agreement.
(2) The Company's ownership of the Subsidiary may be in whole or in part
indirectly through another Subsidiary.
B-1
ANNEX C
FORM OF LOCK-UP AGREEMENT
Xxxxxx X. Xxxxx & Co. Incorporated
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
As Representatives of the Several Underwriters
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Re: X. X. Xxxxx Corporation (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of Common Stock of the Company (the "Common Stock") or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the "Offering") for which you will
act as the representatives (the "Representatives") of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that,
without the prior written consent of Xxxxxx X. Xxxxx & Co. Incorporated, the
undersigned will not, directly or indirectly, for a period commencing on the
date hereof and continuing to a date 90 days after the date of the final
prospectus for the Offering (the "Lock-up Period"), offer, sell, transfer, or
pledge, contract to sell, transfer or pledge, or cause or in any way permit to
be sold, transferred, pledged, or otherwise disposed of (collectively, a
"Disposition") any (i) shares of Common Stock, (ii) rights, options, or warrants
to purchase shares of Common Stock (including, without limitation, shares of
Common Stock that may be deemed to be beneficially owned by the undersigned in
accordance with the applicable regulations of the Commission and shares of
Common Stock that may be issued upon the exercise of a stock option, warrant or
other convertible security), it being agreed, however, that neither the exercise
of a stock option nor the withholding or surrender of Securities to cover
applicable taxes or to pay the exercise price on an option exercise shall be
considered a Disposition, or (iii) securities that are convertible or
exchangeable into shares of Common Stock now owned or hereafter acquired
directly by such person or with respect to which such person has or hereafter
acquires the power of disposition (collectively, the "Securities"). The
foregoing sentence shall not apply to the Disposition of any or all of the
Securities by gift, will or intestacy, provided that in any such case it shall
be a condition to the Disposition that the transferee execute an agreement
stating that the transferee is
C-1
receiving and holding the Securities subject to the provisions of this Lock-up
Letter and there shall be no further Disposition of such Securities except in
accordance with this Lock-up Letter.
The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
the Securities during the Lock-up Period, even if such Securities would be
disposed of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of Securities held by the undersigned except in compliance with the
foregoing restrictions.
The undersigned represents and warrants that the undersigned has full
power and authority to enter into this agreement and acknowledges that this
agreement is enforceable against the undersigned by the Representative. This
agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
Very truly yours,
-----------------------------------
[Name of officer or director]
C-2
ANNEX D
LIST OF OFFICERS AND DIRECTORS SUBJECT TO LOCK-UP
D-1
