2,000,000
KAYNAR TECHNOLOGIES INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May 5, 1997
▇▇▇▇▇▇ BROTHERS INC.
PAINEWEBBER INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
Kaynar Technologies Inc., a Delaware corporation (the "COMPANY"), and
General Electric Capital Corporation, a New York corporation (the "SELLING
STOCKHOLDER") propose to sell an aggregate of 2,000,000 shares (the "FIRM
SHARES") of the Company's Common Stock, par value $.01 per share (the "COMMON
STOCK") to the several Underwriters named in Schedule 1 hereto (the
"UNDERWRITERS"). Of the 2,000,000 shares of the Firm Shares, 1,800,000 shares
are being sold by the Company and 200,000 shares by the Selling Stockholder. In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 300,000 shares of the Common Stock on the terms and
for the purposes set forth in Section 3 (the "OPTION SHARES"). The Firm Shares
and the Option Shares, if purchased, are hereinafter collectively referred to as
the "SHARES." The Company and the Selling Stockholder are hereinafter
collectively referred to as the "SELLERS."
Immediately prior to the First Delivery Date (as hereinafter defined),
Kaynar Technologies Inc., a Delaware corporation ("KAYNAR"), shall be merged
with and into its wholly-owned parent, Kaynar Holdings Inc., a Delaware
corporation ("HOLDINGS"), with Holdings as the surviving corporation.
Immediately following the merger, the surviving corporation shall be renamed
Kaynar Technologies Inc. The foregoing transactions are collectively referred to
herein as the "REORGANIZATION". Unless otherwise noted herein, the term
"COMPANY" shall mean Holdings, as the corporation surviving the merger.
This is to confirm the agreement concerning the purchase of the Shares
from the Company and the Selling Stockholder by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) The Registration statement on Form S-1 (File No. 333-22345)
with respect to the Shares has (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the rules and regulations (the "RULE AND
REGULATIONS") of the Securities and Exchange Commission (the "COMMISSION")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities Act or will become
effective not later than 10:00 a.m., New York
City time, on the date of this Agreement or at such later date and time as
the Underwriters may approve. Copies of the Registration Statement have
been delivered by the Company to each of you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement,
"EFFECTIVE TIME" means the date and the time as of which the Registration
Statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "EFFECTIVE DATE" means the date of
the Effective Time; "PRELIMINARY PROSPECTUS" means each prospectus included
in such Registration Statement before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including a registration
statement (if any) filed pursuant to Rule 462(b) under the Securities Act
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 6(a) hereof and deemed to be a part of the
Registration Statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "PROSPECTUS" means such
final prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission has
not issued any order preventing or suspending the use of the Registration
Statement or any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not (i) as of the Effective Date, as to the Registration
Statement, 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 not misleading and (ii) as of the applicable filing
date, as to the Prospectus and any amendment or supplement thereto, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; PROVIDED that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as set forth on
Schedule 2 hereto) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business as it is currently being conducted and as described in the
Registration Statement and the Prospectus and to own, lease and operate it
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification. Except for Recoil, none of the subsidiaries of the
Company is a "SIGNIFICANT SUBSIDIARY" as such term is defined in Rule 405
of the Rules and Regulations.
(d) All the outstanding shares of capital stock or other
securities evidencing equity ownership of the Company (including the Shares
to be sold by the Selling Stockholder) have been and, after consummation of
the Reorganization, will be duly authorized and validly issued and, after
consummation of the Reorganization, will be fully paid, non-assessable and
not subject to any preemptive or similar rights. The Shares to be issued
and sold by the Company
2
hereunder have been duly authorized and, when issued and delivered to the
Representatives for the account of each Underwriter against payment
therefor as provided in this Agreement, will have been validly issued and
will be fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights. The authorized, issued
and outstanding stock of the Company was as of December 31, 1996 and will
be immediately after giving effect to the consummation of this Offering and
the Reorganization, as set forth in the Registration Statement and the
Prospectus under the captions "CAPITALIZATION" and "DESCRIPTION OF CAPITAL
STOCK." After giving effect to the Offering, the Reorganization and the
application of the proceeds thereof as described in the Registration
Statement and the Prospectus under the caption "USE OF PROCEEDS," the
Company's consolidated capitalization as of December 31, 1996 would have
been as set forth under the "AS ADJUSTED" column under the caption
"CAPITALIZATION." The table under the caption "CAPITALIZATION" sets forth
the amount of all outstanding long-term indebtedness of the Company for
monies borrowed and capital lease obligations, on a consolidated basis,
prior to and after giving effect to the Offering and Reorganization. The
authorized capital stock of the Company, including the Shares, conforms as
to legal matters to the description thereof contained in the Registration
Statement and the Prospectus. Except as set forth in the Registration
Statement and the Prospectus, there are no outstanding rights, warrants, or
options to acquire, or instruments convertible into or exchangeable for,
any shares of capital stock or other equity interest in the Company.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and is a legally valid and binding agreement of
the Company, enforceable against it in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally (including laws relating to fraudulent
transfers or conveyances), by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and, as to rights of indemnification and contribution, by federal and
state securities laws and principles of public policy.
(f) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby and as described in
the Prospectus under the caption "REORGANIZATION" will not conflict with or
constitute a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution of
the Shares by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required by the Company for the execution, delivery and
performance of this Agreement by the Company and the issuance and sale of
the Shares.
3
(g) Except as provided in the Stockholders Agreement by and
between the Company, the Selling Stockholder and the Management Investors
(as defined therein), there are no contracts, agreements or understandings
between the Company and any person granting such person the right (other
than rights which have been waived or satisfied) to require the Company
to file a Registration Statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other Registration Statement filed by
the Company under the Securities Act.
(h) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to Rule
144A under, or Regulations D or S of, the Securities Act.
(i) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(k) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified certain financial
statements of the Company, whose report appears in the Prospectus and who
has delivered the initial letter referred to in Section 9(i) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations during the periods covered by the financial
statements on which they reported contained in the Prospectus.
(l) The Company and each subsidiary has (i) good and marketable
title to all of the properties and assets necessary for the operation of
its business as described in the Registration Statement and the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances and
restrictions except such as are described in the Prospectus, including any
Exhibits thereto, or such as do not materially affect the value of such
property and do not materially interfere with the use of such property by
the Company, (ii) peaceful and undisturbed possession under all leases to
which it is party as lessee, (iii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and will have
made all declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts or governmental
agencies, bodies or administrative agencies or authorities (each an
"AUTHORIZATION") necessary to engage in the business conducted by it in the
manner described in
4
the Registration Statement and the Prospectus and] (iv) no reason to
believe that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization. All such Authorizations are
valid and in full force and effect. The Company and each subsidiary is in
compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. All leases to which
the Company and each subsidiary is a party are valid and binding and, to
the knowledge of the Company, no default by the Company or any such
subsidiary has occurred and is continuing thereunder and no defaults by the
landlord are existing under any such lease.
(m) The Company and its subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries.
(n) The Company, together with its subsidiaries, owns and
possesses all right, title and interest in and to, or has duly licensed or
otherwise obtained from third parties, all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
▇▇▇▇ registrations, copyrights, licenses or any other proprietary right
("TRADE RIGHTS") which are material to the business of the Company.
Neither the Company nor any of its subsidiaries has received any notice of
infringement, misappropriation or conflict from any third party as to such
Trade Rights which has not been resolved or disposed of and to the
knowledge of the Company and its subsidiaries, neither the Company nor any
of its subsidiaries has infringed, misappropriated or otherwise conflicted
with Trade Rights of any third parties.
(o) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries; and to the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(p) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(q) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(r) There is (i) no significant unfair labor practice complaint
pending or, to the knowledge of the Company, threatened against the Company
or any subsidiary before the National Labor Relations Board, any state or
local labor relations board of or any foreign labor relations board, and no
significant grievance or significant arbitration proceeding arising out of
or under any collective bargaining agreement is so pending or, to the
knowledge of the Company
5
and its subsidiaries, threatened against the Company or any subsidiary and
(ii) no pending union representation question exists with respect to the
employees of the Company or any subsidiary. To the knowledge of the
Company and its subsidiaries, no union organizing activities are taking
place. Neither the Company nor any subsidiary has violated in any material
respect (A) any federal, state or local law, statute, rule or regulation or
foreign law, statute rule or regulation relating to discrimination in
hiring, promotion or pay of employees or (B) any applicable wage or hour
laws.
(s) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA").
(t) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had, nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, would have, a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries.
(u) Since the date of the Prospectus through the date hereof,
and except as may otherwise be disclosed in the Prospectus, the Company has
not (i) issued or granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii) entered into
any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(v) The Company and each subsidiary (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(w) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a material default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties or assets is subject.
(x) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, (i) has used
any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity, (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds, (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices
6
Act of 1977 or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(y) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the Company,
any of their predecessors in interest) at, upon or from any of the property
now or previously owned or leased by the Company or its subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a material adverse effect on
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of its subsidiaries or with respect to which the Company or
any of its subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not have or would not be reasonably likely to have, singularly or in
the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect on
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries; and the terms
"HAZARDOUS WASTES," "TOXIC WASTES," "HAZARDOUS SUBSTANCES" and "MEDICAL
WASTES" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(z) Neither the Company nor any subsidiary is an "INVESTMENT
COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY" within the
meaning of the Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder (the "1940 ACT").
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDER. The Selling Stockholder represents, warrants and agrees that:
(a) The Selling Stockholder owns, and immediately prior to the
First Delivery Date, the Selling Stockholder will own the Shares to be sold
by the Selling Stockholder on such date free and clear of all adverse
claims (within the meaning of Section 8-302 of the Uniform Commercial Code
as in effect in the State of New York) and upon delivery of such Shares and
payment therefor pursuant hereto, the several Underwriters will own such
Shares, free and clear of all adverse claims assuming the Underwriters
purchased such Shares pursuant to this Agreement in good faith and without
notice of such adverse claim.
(b) The Selling Stockholder has corporate power and authority to
enter into this Agreement; the execution, delivery and performance of this
Agreement by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Selling Stockholder
is a party or by which the Selling
7
Stockholder is bound or to which any of the property or assets of the
Selling Stockholder is subject, nor will such actions result in any
violation of the charter or by-laws of the Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdictions over the Selling Stockholder or the
property or assets of the Selling Stockholder, and, except for the
registration of the Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required by the Selling Stockholder for the execution, delivery and
performance of this Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby.
(c) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Stockholder in its capacity as Selling Stockholder expressly for use
therein, such Preliminary Prospectus and the Registration Statement did
not, and the Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, as of the applicable Effective
Date and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto), will not, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained herein, and subject to the terms and
conditions of this Agreement, the Company agrees to sell 1,800,000 shares of the
Firm Shares and the Selling Stockholder hereby agrees to sell 200,000 shares of
the Firm Shares to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm Shares set
forth opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Shares shall
be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 300,000 shares of Option Shares. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 5 hereof. Shares of Option Shares shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Shares set forth opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Shares shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Shares other than in
100 share amounts. The price of both the Firm Shares and any Option Shares
shall be $14.50 per share.
8
The Company and the Selling Stockholder shall not be obligated to
deliver any of the Shares to be delivered on the First Delivery Date or the
Option Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Shares to be purchased on such Delivery Date (as hereinafter
defined) as provided herein.
4. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
It is understood that 96,515 shares of the Firm Shares will initially
be reserved by the several Underwriters for offer and sale upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD")
to employees who have heretofore delivered to the Representatives offers to
purchase shares of Firm Shares in form satisfactory to the Representatives, and
that any allocation of such Firm Shares among such persons will be made in
accordance with timely directions received by the Representatives from the
Company; PROVIDED, that except as otherwise provided herein, under no
circumstances will the Representatives or any Underwriter be liable to the
Company or to any such person for any action taken or omitted in good faith in
connection with such offering to employees and persons having business
relationships with the Company and its subsidiaries. It is further understood
that any shares of such Firm Shares which are not purchased by such persons will
be offered by the Underwriters to the public upon the terms and conditions set
forth in the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Shares shall be made at the office of O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M.,
New York City time, on the third full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "FIRST DELIVERY DATE." On the First Delivery Date, the
Company and the Selling Stockholder shall deliver or cause to be delivered
certificates representing the Firm Shares to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholder of the purchase price by certified or official bank check or
checks payable in New York Clearing House (same-day) funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Shares shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose
of expediting the checking and packaging of the certificates for the Firm
Shares, the Company and the Selling Stockholder shall make the certificates
representing the Firm Shares available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time, and from time to time, on or before the 30th day after
the date of this Agreement, the option granted in Section 3 may be exercised, in
whole or in part, by written notice to the Company by the Representatives. Such
notice shall set forth the aggregate number of Option Shares as to which the
option is being exercised, the names in which the Option Shares are to be
registered, the denominations in which the Option Shares are to be issued and
the date and time, as determined by the Representatives, when the Option Shares
are to be delivered; PROVIDED, HOWEVER, that this date and time shall not be
(i) earlier than the First Delivery Date nor earlier than the third business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The dates and times the Option Shares are delivered are sometimes
9
referred to as the "OPTION DELIVERY DATE" and the First Delivery Date and the
Option Delivery Date are sometimes each referred to as a "DELIVERY DATE").
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Option Delivery Date. On the Option Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by certified or official bank
check or checks payable in New York Clearing House (same-day) funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Shares shall be registered in such names
and in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Shares, the Company shall make the certificates
representing the Option Shares available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Option Delivery Date.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal.
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith.
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented
10
Prospectus and, if the delivery of a prospectus is required at any time
after the Effective Time in connection with the offering or sale of the
Shares or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act to notify the Representatives and,
upon their request, to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing.
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(g) For a period of three years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering
and sale under the securities laws of such United States and Canadian
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Shares; PROVIDED that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise dispose
of (or enter into any transaction or device which is designed to, or could
be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (other than the Shares and shares
issued pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans
11
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with
respect to any shares of Common Stock (other than the grant of options
pursuant to option plans existing on the date hereof), without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.; and to cause each executive
officer and director of the Company to furnish to the Representatives,
prior to the First Delivery Date, a letter or letters, in the form attached
hereto as Exhibit A, pursuant to which each such person shall agree not to,
directly or indirectly, offer for sale, sell or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person during such 180-day
period of) any shares of Common Stock for a period of 180 days from the
date of the Prospectus, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.
(j) Prior to the Effective Date, to apply for listing of the
Shares on the NASDAQ National Market System and to use its best efforts to
complete that listing, subject only to official notice of issuance and
evidence of satisfactory distribution, prior to the First Delivery Date.
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver promptly to the Representatives a signed
copy of each report on Form SR filed by it with the Commission.
(l) The Company will effect the Reorganization and will apply
the net proceeds from the sale of the Shares being sold by the Company as
set forth in the Prospectus.
(m) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "INVESTMENT COMPANY"
or "CONTROLLED" by an "INVESTMENT COMPANY" within the meaning of the 1940
Act.
7. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDER. The Selling
Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, offer for sale, sell or otherwise dispose
of (or enter into any transaction or device which is designed to, or could
be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (other than the Shares), without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.
(b) That the Shares to be sold by the Selling Stockholder
hereunder is subject to the interest of the Underwriters and that the
obligations of the Selling Stockholder hereunder shall not be terminated by
any act of the Selling Stockholder, by operation of law or the occurrence
of any other event, except in accordance with the terms of this Agreement.
8. EXPENSES. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Shares and any taxes
payable in that connection, (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto, (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement, (d) the costs of printing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and
12
delivery of the stock, (e) the filing fees incident to securing any required
review by the NASD of the terms of sale of the Shares, (f) any applicable
listing or other similar fees, (g) the reasonable fees and expenses of
qualifying the Shares under the securities laws of the several jurisdictions as
provided in Section 6(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters
in connection therewith), and (h) all other costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholder under
this Agreement; PROVIDED that, except as provided in this Section 8 and in
Section 12, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Shares which
they may sell and the expenses of advertising any offering of the Shares made by
the Underwriters, and the Selling Stockholder shall pay the fees and expenses of
its counsel, and any transfer taxes payable in connection with the sale of its
Shares to the Underwriters.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholder contained herein, to the performance by the Company
and the Selling Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on each Delivery Date
with the same force and effect as if made on and as of such Delivery Date.
(b) The Registration Statement shall have become effective not
later than 10:00 a.m., New York City time, on the date of this Agreement or
at such later date and time as the Representatives may approve; the
Prospectus shall have been timely filed with the Commission in accordance
with Section 6(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(c) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholder shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(e) O'Melveny & ▇▇▇▇▇ LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such
13
Delivery Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
incorporated, and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation with
corporate power to own its properties and carry on its business as
described in the Registration Statement;
(ii) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, 10,000,000 shares of Series C
Preferred Stock. The authorized capital stock of the Company,
including the Shares, conforms as to legal matters to the description
thereof contained in the Registration Statement and the Prospectus;
(iii) The Shares have been duly authorized by all necessary
corporate action on the part of the Company and, upon payment for and
delivery of the Shares in accordance with the Agreement and the
countersigning of the certificate or certificates representing the
Shares by a duly authorized signatory of the registrar for the
Company's Common Stock, the Shares will be validly issued, fully paid
and non-assessable;
(iv) Holders of the capital stock of the Company are not
entitled to any preemptive right to subscribe to any additional shares
of the Company's capital stock under the Company's Certificate of
Incorporation or Bylaws;
(v) The execution, delivery and performance of the
Agreement have been duly authorized by all necessary corporate action
on the part of the Company, and the Agreement has been duly executed
and delivered by the Company;
(vi) The execution and delivery by the Company of, and
performance of its obligations on or prior to the date of this opinion
under, the Agreement do not violate (i) the Company's Certificate of
Incorporation or Bylaws or (ii) any California or federal statute or
regulation that we have, in the exercise of customary professional
diligence, recognized as applicable to the Company or to transactions
of the type contemplated by the Agreement, except that we express no
opinion regarding any federal securities laws, or Blue Sky or state
securities laws or Section 10 of this Agreement except as otherwise
expressly stated herein.
(vii) No order, consent, permit or approval of any
California or federal governmental authority is required on the part
of the Company for the execution and delivery of the Agreement or for
the issuance and sale of the Shares, except such as have been obtained
under the Act and such as may be required under applicable Blue Sky or
state securities laws;
(viii) The execution, delivery and performance of the Merger
Agreement have been duly authorized by all necessary corporate action
on the part of the Company and Operating Company, and the Merger
Agreement has been duly executed and delivered by the Company and
Operating Company;
14
(ix) The performance by each of the Company and Operating
Company of its obligations on or prior to the date of this opinion
under the Merger Agreement do not violate (i) its Certificate of
Incorporation or Bylaws or (ii) any statute, rule or regulation that
we have, in the exercise of customary professional diligence,
recognized as applicable to the Company or Operating Company or to
transactions of the type contemplated by the Merger Agreement;
(x) No order, consent, permit or approval of any California
or federal governmental authority that we have, in the exercise of
customary professional diligence, recognized as applicable to the
Company or Operating Company or to transactions of the type
contemplated by the Merger Agreement is required on the part of either
the Company or Operating Company for the execution and delivery of,
and performance of its obligations under, the Merger Agreement, except
for such as have been obtained;
(xi) We have not, since January 1, 1994 given substantive
attention on behalf of the Company to, or represented the Company in
connection with, any actions, suits or proceedings pending or
threatened against the Company before any court, arbitrator or
governmental agency, which (i) seek to affect the enforceability of
the Agreement or (ii) seek damages in excess of $10,000. We call your
attention to the fact that our engagement is limited to specific
matters as to which we are consulted by the Company;
(xii) The Registration Statement has been declared effective
under the Act, and, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or threatened by
the Commission;
(xiii) The Registration Statement, on the date it was filed,
appeared on its face to comply in all material respects with the
requirements as to form for registration statements on Form S-1 under
the Act and the related rules and regulations in effect at the date of
filing, except that we express no opinion concerning the financial
statements and other financial information contained therein;
(xiv) The statements set forth in the Prospectus under the
headings "Risk Factors--Concentration of Stock Ownership; --Benefits
of Offering to Existing Stockholders; --Anti-Takeover Provisions;
--Shares Eligible for Future Sale," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity
and Capital Resources," "Business--Properties; Environmental
Matters," "Management," "Certain Transactions," "Principal
Stockholders and Selling Stockholder," "Description of Capital Stock,"
"Shares Eligible for Future Sale," and Item 14 of the Registration
Statement, insofar as such statements constitute a summary of the
terms of legal matters, documents,
15
agreements or other instruments or governmental, regulatory or other
legal proceedings, are fair and accurate in all material respects;
(xv) Neither the Company nor any subsidiary is an
"INVESTMENT COMPANY" within the meaning of the 1940 Act;
(xvi) We do not know of any contract or other document of a
character required to be filed as an exhibit to the Registration
Statement which is not filed as required;
(xvii) The Company's execution and delivery of, and
performance of its obligations on or prior to the date of this opinion
under, the Agreement do not (i) violate, breach, or result in a
default under, any existing obligation of or restriction on the
Company under any other agreement (the "Other Agreements") identified
in the Company Certificate, or (iii) breach or otherwise violate any
existing obligation of or restriction on the Company under any order,
judgment or decree of any California or federal court or governmental
authority binding on the Company identified in the Company
Certificate;
(xviii) To the best of such counsel's knowledge, except as
provided in the Agreement and the Stockholders Agreement there are no
contracts, agreements or understandings between the Company or any
subsidiary and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to
file a Registration Statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other Registration Statement filed by
the Company under the Securities Act; and
(xix) In connection with our participation in the
preparation of the Registration Statement and the Prospectus, we have
not independently verified the accuracy, completeness or fairness of
the statements contained therein, and the limitations inherent in the
examination made by us and the knowledge available to us are such that
we are unable to assume, and we do not assume, any responsibility for
such accuracy, completeness or fairness (except as otherwise
specifically stated in paragraph 9(e)(x) above). However, on the
basis of our review and participation in conferences in connection
with the preparation of the Registration Statement and the Prospectus,
and relying as to materiality to a large extent upon opinions of
officers and other representatives of the Company, we do not believe
that the Registration Statement as of its effective date contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and we do not believe that the Prospectus on
the date hereof, contains any untrue statement of a material fact or
omits 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. However, we
express no opinion or belief as to the financial statements and other
financial information contained in the Registration Statement or the
Prospectus.
16
(f) Lyon, P.C. shall have furnished to the Representatives his
written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) The Company, together with its subsidiaries, owns and
possesses all right, title and interest in and to, or has duly
licensed or otherwise obtained from third parties, all patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses or any
other proprietary right ("TRADE RIGHTS") which are material to the
business of the Company. Neither the Company nor any of its
subsidiaries has received any notice of infringement, misappropriation
or conflict from any third party as to such Trade Rights which has not
been resolved or disposed of and to the knowledge of the Company and
its subsidiaries, neither the Company nor any of its subsidiaries has
infringed, misappropriated or otherwise conflicted with Trade Rights
of any third parties;
(g) The counsel for the Selling Stockholder (which may be an
employee of the Selling Stockholder) shall have furnished to the
Representatives its written opinion, as counsel to the Selling Stockholder,
addressed to the Underwriters and dated the First Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) Selling Stockholder has corporate power and authority
to enter into this Agreement; the execution, delivery and performance
of this Agreement by the Selling Stockholder and the consummation by
the Selling Stockholder of the transactions contemplated hereby will
not result in any violation of the provisions of the charter or
by-laws of the Selling Stockholder such Selling Stockholder, and,
except for the registration of the Shares under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required by the Selling
Stockholder for the execution, delivery and performance of this
Agreement by Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder;
(iii) Immediately prior to the First Delivery Date, the
Selling Stockholder owns the Shares, free and clear of all adverse
claims (within the meaning of Section 8-302 of the Uniform Commercial
Code as in effect in the State of New York) and has the full right,
power and authority to sell, assign, transfer and deliver such Shares
to the Underwriters;
(iv) Upon delivery of the Shares to be sold by the Selling
Stockholder under this Agreement to the several Underwriters, and
payment therefor pursuant to this Agreement, the Underwriters will
hold such Shares free and clear of all adverse claims (within the
meaning of Section 8-302 of the Uniform Commercial Code
17
as in effect in the State of New York) assuming the Underwriters
purchased such Shares pursuant to this Agreement in good faith and
without notice of any such adverse claim.
(h) The Representatives shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall have furnished to the
Representatives a letter or letters in form and substance satisfactory to
each of the Representatives, addressed to the Underwriters and dated the
date hereof and such Delivery Date, containing statements and information
of the type ordinarily included in accountants' "COMFORT LETTERS" with
respect to the financial statements and financial information contained in
the Registration Statement and the Prospectus.
(j) The Company shall have furnished to the Representatives a
certificate of the Company, dated such Delivery Date, signed by the
Chairman of the Board, or the President and the principal financial or
accounting officer of the Company, in their capacities or such, stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 of this Agreement are true and correct as of the
date of this Agreement and as of such Delivery Date and, the Company
has complied with all the agreements and satisfied all the conditions
on their part to be performed;
(ii) They have carefully examined (A) the Registration
Statement and, in the Company's opinion (1) as of the Effective Date,
the Registration Statement did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (2) since the Effective Date no event has occurred
which should have been set forth in an amendment to the Registration
Statement and (B) the Prospectus and, in the Company's opinion (1) as
of the Effective Date, the Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, and (2) since the Effective Date no event has occurred
which should have been set forth in a supplement or amendment to the
Prospectus. The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the
Securities Act; and
(iii) Since the date of the most recent financial statements
included in the Registration Statement and the Prospectus (including
any amendment or supplement thereto), there has been no material
adverse change in the condition (financial or other), earnings,
business, properties or prospects of the Company and its
18
subsidiaries, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, whether or not arising from
transactions in the ordinary course of business, except as set forth
in the Registration Statement and the Prospectus (exclusive of any
amendment or supplement thereto).
(k) The Selling Stockholder shall have furnished to the
Representatives on the First Delivery Date a certificate, dated the First
Delivery Date, signed by, or on behalf of, the Selling Stockholder stating
that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct as of the First Delivery
Date and that the Selling Stockholder has complied with all agreements
contained herein to be performed by the Selling Stockholder at or prior to
the First Delivery Date.
(l) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not have
been any material change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, having a material effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable to
proceed with the public offering or the delivery of the Shares being
delivered on such Delivery Date on the terms and in the manner contemplated
in the Prospectus.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities of
the Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Shares
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) The Company and the Selling Stockholder, respectively, shall
not have failed at or prior to such Delivery Date to perform or comply with
any of the agreements herein contained and required to be performed or
complied with by the Company and the Selling Stockholder, respectively, at
or prior to such Delivery Date.
(o) All of the transactions contemplated by the Reorganization
have been consummated.
19
(p) Each executive officer and director of the Company shall
have furnished to the Representatives, prior to the First Delivery Date, a
letter or letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, offer for sale, sell or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person during the period set
forth in Sections 6(i) and 7(a)) any shares of Common Stock or other
capital stock of the Company owned by such person, without the prior
written consent of ▇▇▇▇▇▇ Brothers Inc.
(q) On or prior to such Delivery Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
(r) No action shall have been taken and no statute, rule or
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would as of such Delivery Date prevent the
issuance of the Shares; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction shall have
been issued as of such Delivery Date that would prevent the issuance of the
Shares; and, on such Delivery Date no action, suit or proceeding shall be
pending against or affect the Company or any of its subsidiaries, before
any court or arbitrator or any governmental body, agency or official that,
if adversely determined, would interfere with or adversely affect the
issuance of the Shares or would, except as disclosed in the Registration
Statement and the Prospectus, individually or in the aggregate have a
material adverse effect on the transactions contemplated by the
Reorganization or the Shares.
(s) The Nasdaq National Market System shall have approved the
Shares for listing, subject only to official notice of issuance and
evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, (including any Underwriter acting in its capacity as
"QUALIFIED INDEPENDENT UNDERWRITER" pursuant to Rule 2720 of the NASD) its
officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act or the Exchange Act,
from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of the
Shares), to which that Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement,
the Prospectus or in any amendment or supplement thereto or (B) in any blue
sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Shares under the securities
laws of any state or other jurisdiction (any such application, document or
information being hereinafter called a "BLUE SKY APPLICATION"), (ii) the
omission or alleged omission to state in any
20
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clause
(i) or (ii) above (provided that the Company shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its gross negligence or
willful misconduct), and shall reimburse each Underwriter and each officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholder agrees, subject to the limitation
set forth in Section 10(g), to indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act or the
Exchange Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and
sales of the Shares), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability or action arise
out of, or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus or any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, in conformity with information provided in
writing by the Selling Stockholder to the Company specifically for use
therein and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling persons in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
that the Selling Stockholder will not be liable in any such case to the
extent that (i) any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with
21
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives, specifically for use therein; or
(ii) if such statement or omission was contained or made in any preliminary
prospectus and corrected in the Prospectus and (1) any such loss, claim,
damage or liability suffered or incurred by an Underwriter (or any person
who controls any Underwriter) resulted from an action, claim or suit by any
person who purchased Shares which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the Prospectus to such person at or prior to the
confirmation of the sale of such Shares in any case where such delivery is
required by the Securities Act. This indemnity agreement will be in
addition to any liability which the Selling Stockholder may otherwise have.
(c) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the Company),
the Selling Stockholder and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or in any Blue Sky Application
any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer, the Selling Stockholder or controlling person promptly upon demand
for any legal or other expenses reasonably incurred by the Company or any
such director, officer, the Selling Stockholder or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee, the Selling Stockholder or controlling
person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure and, PROVIDED FURTHER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified
22
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that the
Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or the subsidiary under this Section 10
if, (i) the Company has failed to provide counsel reasonably satisfactory
to such indemnified party in a timely manner or (ii) counsel which has been
provided by the Company reasonably determines that its representation of
such indemnified party would present it with a conflict of interest, and in
that event the fees and expenses of such separate counsel shall be paid by
the Company or the subsidiary. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a) or 10(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company, the Selling
Stockholder and the Underwriters, respectively, 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 faults of the Company, the Selling Stockholder and the
Underwriters, respectively, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Selling Stockholder and
the Underwriters with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by each
of the Company and the Selling Stockholder, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, bear to the total gross proceeds
from the offering of the Shares under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholder or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The
23
Company, the Selling Stockholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10(e)
were to be determined by PRO RATA allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10(e) shall be deemed to
include, for purposes of this Section 10(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(e)
are several in proportion to their respective underwriting obligations and
not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Shares by the Underwriters set forth on the cover page of, the legend
concerning over-allotments on the inside front cover page of and the
concession and reallowance figures appearing under the caption
"UNDERWRITING" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
(g) Notwithstanding any of the provisions of this Section 10,
the Selling Stockholder's liability to the Underwriters and/or the Company
and their officers, employees and controlling persons, shall not exceed the
net proceeds received by Selling Stockholders from the sale of the Shares
being sold by the Selling Stockholder pursuant to this Agreement to the
Underwriters, and in no event shall the Company have any right of
contribution from the Selling Stockholder for liability which the Company
may have to the Underwriters, their officers, employees and controlling
persons pursuant to Section 10(a) hereof, except under the circumstances
which give rise to liability by the Selling Stockholder under Section 10(b)
hereof.
11. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Shares which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Shares set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Shares set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
PROVIDED, HOWEVER, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Shares on such Delivery Date if the total
number of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds 9.09% of the total number of shares of
the Shares to be purchased on such Delivery Date, and any remaining non-
defaulting Underwriter shall not be obligated to purchase more than 110% of the
number of shares of the Shares which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 3. If the foregoing
24
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Shares to be purchased on such Delivery Date.
If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Option Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. As used in
this Agreement, the term "UNDERWRITER" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Shares which
a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Shares of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
12. TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Shares if, prior to that
time, any of the events described in Section 9(l) or 9(n) shall have occurred or
if the Underwriters shall decline to purchase the Shares for any reason
permitted under Section 9 or Section 11.
13. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company
shall fail to tender the Shares for delivery to the Underwriters by reason of
any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled (other than the conditions set forth in subdivision (m) of Section
9 hereof), the Company will reimburse the Underwriters for all reasonable out-
of-pocket expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Shares, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 12 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
13. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice
pursuant to Section 10(d), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
with a copy to C. ▇▇▇▇▇ ▇▇▇▇▇, Esq.,
25
O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(c) If to the Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to General Electric Capital
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇, (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with copies to General Electric Capital
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Corporate Finance Group, Department Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a
copy to Sidley & Austin, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, III (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to
Section 10(d) shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its acceptance
telex to the Representatives, which address will be supplied to any other party
hereto by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof. The
Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on
behalf of the Representatives.
15. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholder, and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company, and the Selling Stockholder, contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. DEFINITION OF THE TERMS "BUSINESS DAY." For purposes of this
Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
26
20. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[SIGNATURE PAGES TO FOLLOW]
27
If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholder and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
KAYNAR TECHNOLOGIES INC.
By
-------------------------------
Name
Title
GENERAL ELECTRIC CAPITAL CORPORATION
By
-------------------------------
Name
Title
S-1
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
PAINEWEBBER INCORPORATED.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC.
By
--------------------------------
AUTHORIZED REPRESENTATIVE
S-2
EXHIBIT A
▇▇▇▇▇▇ Brothers Inc.
PaineWebber Incorporated
c/▇ ▇▇▇▇▇▇ Brothers Inc.
The World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose
to enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Kaynar Technologies Inc. (the "Company") and that the Underwriters propose to
reoffer the Shares to the public.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that without the prior written consent of ▇▇▇▇▇▇
Brothers Inc. the undersigned will not sell, offer to sell, solicit an offer to
buy, contract to sell, grant any option to purchase, or otherwise transfer or
dispose of, any Shares of the Common Stock, or any securities convertible into
or exercisable or exchangeable for the Common Stock, for a period of 180 days
after the date of the final Prospectus relating to the offering of the Shares to
the public by the Underwriters.
The undersigned agrees that the provisions of this letter agreement
shall be binding also upon the successors, assigns, heirs and personal
representatives of the undersigned.
In furtherance of the foregoing, the Company and ChaseMellon
Shareholder Services, Inc., its Transfer Agent, are hereby authorized to decline
to make any transfer of securities if such transfer would constitute a violation
or breach of this letter agreement.
It is understood that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, you will release me from all obligations under this
letter agreement.
Very truly yours,
------------------------------
[Name of Signatory]
Dated: May ___, 1997
SCHEDULE 1
Number of
Underwriters Shares
------------ ----------
▇▇▇▇▇▇ Brothers Inc.. . . . . . . . . . . . . . . . . . . 620,000
PaineWebber Incorporated. . . . . . . . . . . . . . . . . 620,000
ABN AMRO Chicago Corporation. . . . . . . . . . . . . . . 55,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc.. . . . . . . . . . . . . . . . . 55,000
Credit Suisse First Boston Corporation. . . . . . . . . . 55,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. . . . . . . . . . . . . . . . . 55,000
Everen Securities, Inc. . . . . . . . . . . . . . . . . . 55,000
▇▇▇▇▇▇▇, Sachs & Co.. . . . . . . . . . . . . . . . . . . 55,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated . . . . . . . . . . . . . . . 55,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated . . . . . . . . . . . . 55,000
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc. . . . . . . . . . . . . . . . . . 55,000
Salomon Brothers Inc. . . . . . . . . . . . . . . . . . . 55,000
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co. . . . . . . . . . . . . . . . . . . 30,000
▇▇▇▇▇▇▇▇▇▇ & Co. Inc. . . . . . . . . . . . . . . . . . . 30,000
First of Michigan Corporation . . . . . . . . . . . . . . 30,000
Gabelli & Company, Inc. . . . . . . . . . . . . . . . . . 30,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated. . . . . . . . . . . 30,000
Pennsylvania Merchant Group Ltd . . . . . . . . . . . . . 30,000
Sutro & Co. Incorporated. . . . . . . . . . . . . . . . . 30,000
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Total . . . . . . . . . . . . . . . . . . . . 2,000,000
---------
---------
Sch-1
SCHEDULE 2
Jurisdiction
Subsidiary of Incorporation
---------- ----------------
Kaynar Technologies Ltd..................................................England
K.T.I. Femipari Kft......................................................Hungary
Kaynar Technologies International Sales Corp............................Barbados
Recoil Holdings, Inc....................................................Delaware
Recoil Australia Holdings, Inc..........................................Delaware
Recoil Pty...................................................Victoria, Australia
Recoil (Europe) Ltd...............................................United Kingdom
Recoil Marketing BVBA.............................................Aalst, Belgium
Sch-2
