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Exhibit 1.1
Shares
FALCONITE, INC.
Common Stock
UNDERWRITING AGREEMENT
_____________, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Falconite, Inc., an Illinois corporation (THE "COMPANY"),
proposes to issue and sell ________ shares of Common Stock, $.01 par value per
share, of the Company (THE "FIRM SHARES"), to the several underwriters named in
Schedule I hereto (THE "UNDERWRITERS"). In addition, the stockholders of the
Company named in Schedule II hereto (COLLECTIVELY, THE "SELLING STOCKHOLDERS"),
propose to sell to the several Underwriters not more than __________ additional
shares of Common Stock, $.01 par value per share, of the Company (THE
"ADDITIONAL SHARES"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter referred to
collectively as the "SHARES". The shares of common stock of the Company to be
outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "COMMON STOCK". The Company and the Selling
Stockholders are hereinafter collectively called the "SELLERS".
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SECTION 1. Registration Statement and Prospectus. The
Company has prepared and filed with the Securities and Exchange Commission (THE
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(COLLECTIVELY, THE "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Act, is hereinafter referred to as the "REGISTRATION
STATEMENT", and the prospectus in the form first used to confirm sales of
Shares is hereinafter referred to as the "PROSPECTUS". If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares
of Common Stock (A "RULE 462(B) REGISTRATION STATEMENT"), then, unless
otherwise specified, any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
issue and sell, and each Underwriter agrees, severally and not jointly, to
purchase from the Company at a price per Share of $_______ (THE "PURCHASE
PRICE") the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Selling
Stockholders agree to sell the Additional Shares and the Underwriters shall
have the right to purchase, severally and not jointly, up to 700,500
Additional Shares from the Selling Stockholders at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Selling
Stockholders, care of the Company, within 30 days after the date of this
Agreement. You shall give any such notice on behalf of the Underwriters and
such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof, which date shall be a business day (i) no earlier than two business
days after such notice has been given (and, in any event, no earlier than the
Closing Date (as hereinafter defined)) and (ii) no later than ten business days
after such notice has been given. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Selling Stockholders the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears
the same proportion to the total number of Additional Shares to be purchased
from the Selling Stockholders as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I bears to the total number of Firm
Shares.
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The Company hereby agrees not to register for sale or offer,
sell, pledge, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any Common Stock (regardless of whether any of
the foregoing actions is to be settled by the delivery of Common Stock, or such
other securities, in cash or otherwise), except to the Underwriters pursuant to
this Agreement, for a period of 180 days after the date of the Prospectus
without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and the Company shall, concurrently with the execution of this
Agreement, deliver an agreement executed by (i) each of the directors and
officers of the Company and (ii) each stockholder listed on Annex I hereto to
the effect that such person will not engage in any of the foregoing
transactions with respect to any Common Stock or any securities convertible
into or exchangeable for Common Stock, in each case, beneficially owned by such
person during such period. Notwithstanding the foregoing, during such period
(i) the Company may grant stock options pursuant to the Company's existing
stock option plan and (ii) the Company may issue shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
SECTION 3. Terms of Public Offering. The Sellers are
advised by you that the Underwriters propose (i) to make a public offering of
their respective portions of the Shares as soon after the execution and
delivery of this Agreement as in your judgment is advisable and (ii) initially
to offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at 9:00 A.M.,
Chicago time, on ____________, 1997 (THE "CLOSING DATE") at such place as you
shall designate. The Closing Date and the location of delivery of and the
form of payment for the Firm Shares may be varied by agreement between you and
the Company.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at such place as you
shall designate at 9:00 A.M., Chicago time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (AN "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
between you and the Selling Stockholders.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date or an Option Closing Date, as
the case may be. Such certificates shall be made available to you for
inspection not later than 8:30 A.M., Chicago time, on the business day next
preceding the Closing Date or the applicable Option Closing Date, as the case
may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, with any transfer
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taxes thereon duly paid by the respective Sellers, for the respective accounts
of the several Underwriters, against payment to the order of the applicable
Sellers of the Purchase Price therefor by wire transfer of Federal or other
funds immediately available in New York City.
SECTION 5. Agreements of the Company. The Company agrees
with you:
(a) To advise you promptly and, if requested by you,
to confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purposes, (iii) when any amendment to the Registration Statement becomes
effective, (iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective and (v) of the happening of any
event during the period referred to in paragraph (d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Company
will use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time.
(b) To furnish to you, without charge, three (3)
signed copies of the Registration Statement as first filed with the Commission
and of each amendment to it, including all exhibits, and to furnish to you and
each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(c) To prepare the Prospectus in a form approved by
you and to file the Prospectus in such form with the Commission within the
applicable period specified in Rule 424(b) under the Act; not to file any
further amendment to the Registration Statement and not to make any amendment
or supplement to the Prospectus of which you shall not previously have been
advised or to which you shall reasonably object after being so advised; and to
prepare and file with the Commission, promptly upon your reasonable request,
any amendment to the Registration Statement or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution of the
Shares by you, and to use its best efforts to cause any such amendment to the
Registration Statement to become promptly effective.
(d) Prior to 9:00 A.M., Chicago time, on the
business day next succeeding the date of this Agreement, and from time to time
thereafter for such period as in the opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City to each
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Underwriter and dealer as many copies of the Prospectus (and of any amendment
or supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
(e) If during the period specified in paragraph (d),
any event shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with law,
and to furnish to each Underwriter and to such dealers as you shall specify,
such number of copies thereof as such Underwriter or dealers may reasonably
request.
(f) Prior to any public offering of the Shares, to
cooperate with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification.
(g) To mail and make generally available to its
stockholders as soon as practicable an earnings statement covering a period of
at least twelve months after the effective date of the Registration Statement
(but in no event commencing later than 90 days after such date) which shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(h) During the period of three years after the date
of this Agreement, to furnish to you as soon as available copies of all reports
or other communications furnished to the record holders of Common Stock or
filed with the Commission and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of its obligations under
this Agreement, including (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Act and all other fees or
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits),
any preliminary prospectus, the Prospectus and all amendments and supplements
to any of the foregoing prior to or during the period specified in paragraph
(d), including the mailing and delivering of
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copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
documents in connection with the offering, purchase, sale or delivery of the
Shares, (iv) all expenses in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states and the cost of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Underwriters in connection
with such registration or qualification and memoranda relating thereto), (v)
the filing fees and disbursements of counsel for the Underwriters in connection
with the review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc., (vi) all fees and expenses in
connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and all costs and expenses incident to
the listing of the Shares on the Nasdaq National Market, (vii) the cost of
printing certificates representing the Shares, (viii) the costs and charges of
any transfer agent, registrar or depositary and (ix) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(j) To use its best efforts to list for quotation
the Shares on the Nasdaq National Market and to maintain the listing of the
Shares on the Nasdaq National Market for a period of three years after the date
of this Agreement.
(k) To use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or any Option Closing Date, as the case
may be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a
Rule 462(b) Registration Statement with the Commission registering the Shares
not so covered in compliance with Rule 462(b) by 9:00 P.M., Chicago time, on
the date of this Agreement and to pay to the Commission the filing fee for such
Rule 462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
SECTION 6. Representations and Warranties of the Company.
The Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective
(other than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become effective
no later than 9:00 P.M., New York City time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement is
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in effect, and no proceedings for such purpose are pending before or threatened
by the Commission.
(b) (i) The Registration Statement (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain any 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, (ii)
the Registration Statement (other than any Rule 462(b) Registration Statement
to be filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply and, as amended or supplemented, if applicable, will comply
in all material respects with the Act, (iii) if the Company is required to file
a Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any amendments or supplements
thereto when they become effective (1) will not contain any 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 (2) will comply
in all material respects with the Act and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph (c) do not apply to statements or
omissions in any preliminary prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(d) Each of the Company and its subsidiaries 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 described in the Prospectus and to
own, lease and operate its 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 where the failure to be so
qualified would not have a material adverse effect on the business prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
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(e) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of the Company or any of its subsidiaries except as otherwise
disclosed in the Registration Statement.
(f) All the outstanding shares of capital stock of
the Company (including the Shares to be sold by the Selling Stockholders) have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be issued
and sold by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(g) All of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable,
and are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company
conforms to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which it or any
of its subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby will not
require any consent, approval, authorization or other order of, or
qualification with, any court or other governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
of its subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which it or any of its subsidiaries is a party or by which
it or any of its subsidiaries or their respective property is bound, or violate
or conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property.
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(k) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is a
party or to which any of their respective property is subject that are required
to be described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(l) Neither the Company nor any of its subsidiaries
has violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS")
or any provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(m) Each of the Company and its subsidiaries has
such permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business and are in compliance with
all terms and conditions thereof; and no event has occurred which allows or,
after notice or lapse of time or both, would allow revocation or termination of
such permits or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such permit; and
such permits contain no restrictions that are burdensome to the Company or any
of its subsidiaries; except where such failure to have, or comply with the
terms or conditions of, such permits, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.
(n) There are no costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(o) This Agreement has been duly authorized,
executed and delivered by the Company.
(p) Except as otherwise set forth in the Prospectus
or such as are not material to the business, prospects, financial condition or
results of operation of the
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Company and its subsidiaries, taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration Statement as
being owned by it. All leases to which the Company or any of its subsidiaries
is a party are valid and binding and no default has occurred or is continuing
thereunder, which might result in any material adverse effect on the business,
prospects, financial condition or results of operation of the Company and its
subsidiaries, taken as a whole, and the Company and its subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as do not materially interfere with
the use made by the Company or such subsidiary.
(q) The Company and its subsidiaries have and will
maintain insurance covering their properties, operations, personnel and
businesses, which insurance is in amounts and insures against such losses and
risks, in each case as is reasonable and in accordance with customary industry
practice to protect the Company, its subsidiaries and their businesses.
Neither the Company nor any of its subsidiaries has received notice from any
insurer or agent of such insurer that capital improvements or other
expenditures will have to be made in order to continue such insurance, except
such as could not reasonably be expected, singularly or in the aggregate, to
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(r) KPMG Peat Marwick LLP are independent public
accountants with respect to the Company as required by the Act.
(s) The financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(t) The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(u) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to
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any securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration Statement.
(v) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(w) The Company has filed a registration statement
pursuant to Section 12(g) of the Exchange Act, to register the Common Stock,
has filed an application to list the Shares on the Nasdaq National Market, and
has received notification that the listing has been approved, subject to notice
of issuance.
(x) Except as disclosed in the Prospectus, there are
no business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(y) There is (i) no significant unfair labor
practice complaint pending against the Company or any of its subsidiaries or,
to the best knowledge of the Company, threatened against any of them, before
the National Labor Relations Board or any state or local labor relations board,
and no significant grievance or more significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against the
Company or any of its subsidiaries or, to the best knowledge of the Company,
threatened against any of them, and (ii) no significant strike, labor dispute,
slowdown or stoppage pending against the Company or any of its subsidiaries or,
to the best knowledge of the Company, threatened against it or any of its
subsidiaries except for such actions specified in clause (i) or (ii) above,
which, singly or in the aggregate could not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(z) The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The statistical
and market-related data included in the Prospectus are based on or derived from
sources which the Company believes to be reliable and accurate in all material
respects.
(aa) All material tax returns required to be filed
by the Company and each of its subsidiaries in any jurisdiction have been
filed,other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments, fees
and other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of its subsidiaries have been paid, other than
those being contested in good faith and for which adequate reserves have been
provided.
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(ab) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change, in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(ac) The Company or its subsidiaries own or have the
legal or contractual right to use the patents, trade names, trademarks, service
marks, copyrights, trade secrets and other proprietary rights which are
material to the conduct of the business of the Company and its subsidiaries,
taken as a whole. Neither the Company nor any of its subsidiaries has received
notice of any claim being asserted by any person to the use of, or the right to
use, any such patents, trade names, trademarks, service marks, copyrights,
trade secrets or other proprietary rights and to the best knowledge of the
Company there is no valid basis for any such claim. Neither the Company nor
any of its subsidiaries has received notice of any person challenging or
questioning the validity or effectiveness of any such patents, trade names,
trademarks, service marks, copyrights, trade secrets or other proprietary
rights.
(ad) The Company, and each of its subsidiaries has
conducted and is conducting its business in compliance with all applicable
federal, state, local and foreign statutes, laws, rules, regulations,
ordinances, codes, decisions, decrees, directives and orders, except where the
failure to do so would not be reasonably likely, singly or in the aggregate, to
have a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries considered as a
whole.
(ae) All offers and sales of capital stock of the
Company prior to the date hereof were at all relevant times duly registered or
exempt from the registration requirements of the Act and were duly registered
or subject to an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
(af) Except as disclosed in or contemplated by the
Prospectus, the Company is not engaged in any discussions or negotiations
concerning, and is not a party to any existing agreements, arrangements or
understandings with respect to, any acquisitions, combinations or dispositions.
SECTION 7. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder severally represents and warrants to
each Underwriter that:
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(a) Such Selling Stockholder is the lawful owner of
the Shares to be sold by such Selling Stockholder pursuant to this Agreement
and has, and on the Closing Date (and Option Closing Date, if applicable) will
have, good and clear title to such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares
pursuant to this Agreement, good and clear title to such Shares will pass to
the Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing
Date will have, full legal right, power and authority to enter into this
Agreement and the Custody Agreement between the Selling Stockholders and
______________, as Custodian (the "Custody Agreement") and to sell, assign,
transfer and deliver such Shares in the manner provided herein and therein, and
this Agreement and the Custody Agreement have been duly authorized, executed
and delivered by such Selling Stockholder and each of this Agreement and the
Custody Agreement is a valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling
Stockholder appointing ______________ and ______________, or either one of
them, as his attorney-in-fact to the extent set forth therein with regard to
the transactions contemplated hereby and by the Registration Statement and the
Custody Agreement has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder and is a valid and binding instrument of
such Selling Stockholder enforceable in accordance with its terms, and,
pursuant to such power of attorney, such Selling Stockholder has authorized
______________ and ______________, or either one of them, to execute and
deliver on his behalf this Agreement and any other document necessary or
desirable in connection with transactions contemplated hereby and to deliver
the Shares to be sold by such Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will
not take, directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, the Selling Stockholder has not distributed
and will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(f) The execution, delivery and performance of this
Agreement by such Selling Stockholder, compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body (except as such may be required under the Act, state
securities
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laws or Blue Sky laws) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, organizational documents of
such Selling Stockholder, if not an individual, or any agreement, indenture or
other instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder or property of such Selling Stockholder is bound, or
violate or conflict with any laws, administrative regulation or ruling or court
decree applicable to such Selling Stockholder or property of such Selling
Stockholder.
(g) Such parts of the Registration Statement under
the caption "Principal Stockholders" which specifically relate to such Selling
Stockholder do not, and will not on the Closing Date (and any Option Closing
Date, if applicable), 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 circumstances under which they were made,
not misleading.
(h) At any time during the period described in
Section 5(e) hereof, if there is any change in the information referred to in
Section 7(g) above, the Selling Stockholders will immediately notify you of
such change.
(i) Such Selling Stockholder is not prompted to sell
the Shares to be sold by such Selling Stockholder pursuant to this Agreement
by any information concerning the Company or any of its subsidiaries that is
not set forth in the Prospectus or other documents filed with the Commission.
(j) The representations and warranties of such
Selling Stockholder in the Custody Agreement are, and on the Closing Date will
be, true and correct.
(k) Such Selling Stockholder does not have any
knowledge or any reason to believe that the Registration Statement or the
Prospectus (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
SECTION 8. Indemnification. (a) The Company and each
Selling Stockholder, jointly and severally, agree to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages, liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
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except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in
writing to the Company by or on behalf of such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages and liabilities and judgments purchased Shares, or any director
or officer of, or person controlling, such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended and supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or judgment.
(b) In case any proceeding (including any
governmental investigation) shall be brought against any Underwriter or any
director or officer of, or person controlling, such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Sellers, such Underwriter shall promptly notify the Sellers
in writing and the Sellers shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, as incurred. Any Underwriter or any director
or officer of, or person controlling, such Underwriter shall have the right to
employ separate counsel in any such proceeding and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter, director, officer or controlling person unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the Company, (ii) the Sellers shall have failed to assume the defense and
employ counsel or (iii) the named parties to any such proceeding (including any
impleaded parties) include both such Underwriter, director, officer or
controlling person and the Company or any Selling Stockholder, as the case may
be, and such Underwriter, director, officer or controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the Company or the Selling Stockholders, as the case may be, (in which case the
Sellers shall not have the right to assume the defense of such proceeding on
behalf of such Underwriter, director, officer or controlling person). In any
such case described in the immediately preceding sentence, the Sellers shall
not, in connection with any one proceeding or separate but substantially
similar or related proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Underwriters, directors, officers and controlling persons. In any
case where any Underwriter or any director or officer of, or person
controlling, such Underwriter has the right to employ separate counsel at the
Company's expense, such counsel shall be designated in writing by Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation and the fees and expenses of such
counsel shall be reimbursed as they are incurred. The Sellers agree to
indemnify and hold harmless any Underwriter
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and any director or officer of, or person controlling, such Underwriter from
and against any loss or liability by reason of any proceeding (x) settled with
the written consent of the Company or (y) settled more than ten business days
after the Sellers receive a request for reimbursement of legal fees and
expenses from such Underwriter, director, officer or controlling person in any
case where such fees and expenses are at the expense of the Company if the
Company shall have failed to comply with such reimbursement request prior to
the date of such settlement. The Sellers shall not, without the prior written
consent of each Underwriter and each person controlling such Underwriter,
effect any settlement of any pending or threatened proceeding in respect of
which such Underwriter or controlling person or any director or officer of such
Underwriter is or could have been a party and indemnity could have been sought
hereunder by such Underwriter, director, officer or controlling person, unless
such settlement includes an unconditional release of such Underwriter and each
such director, officer and controlling person from all liability on claims that
are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement, any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each Selling Stockholder and each person, if any, controlling
such Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, to the same extent as the foregoing indemnity from the
Sellers to each Underwriter but only with reference to information relating to
such Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any preliminary prospectus. In case any proceeding shall be brought against
the Company, any of its directors, any such officer or any person controlling
the Company or any Selling Stockholder or any person controlling such Selling
Stockholder based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to the
Sellers (except that if any Seller shall have assumed the defense thereof, such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such Underwriter), and the Company, its
directors, any such officers and any person controlling the Company and the
Selling Stockholders and any person controlling such Selling Stockholders shall
have the rights and duties given to such Underwriter, by Section 8(b) hereof
(except that if the Company, any of its directors, any such officers or any
such controlling person shall have the right to employ separate counsel at such
Underwriter's expense pursuant to the second sentence of Section 8(b), such
counsel shall be designated by the Company).
(d) To the extent the indemnification provided for
in this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and judgments (i) in
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such proportion as is appropriate to reflect the relative benefits received by
the Sellers on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Sellers and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Sellers,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, 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 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
(e) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) Each Seller hereby designates Falconite, Inc.,
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, as its authorized agent,
upon which process may be served in any action, suit or proceeding which may be
instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a
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claim for indemnification or contribution under or pursuant to this Section 8,
and each Seller will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall
be sent or given to such Seller, at the address for notices specified in
Section 13 hereof.
SECTION 9. Conditions of Underwriters' Obligation. The
several obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the
Company contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 9:00 P.M. Chicago
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) On or after the date hereof there shall not have
occurred any downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of
the Company's securities (including, without limitation, the placing of any
securities on negative or developing watch or negative or developing outlook)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act.
(d) You shall have received, on the Closing Date, a
certificate dated the Closing Date, signed by Xxxxxxx X. Xxxxxxxxx and Xxxxx
X. Xxxx, in their respective capacities as President, Chief Executive Officer
and Director and Vice President, Chief Financial Officer, Secretary and
Director of the Company, confirming the matters set forth in paragraphs (a),
(b), and (c) of this Section 9.
(e) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term debt of
the Company or any of its subsidiaries and (iii) neither the Company nor any of
its subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause (i), (ii)
or (iii), in your judgment, is material and adverse and, in your judgment,
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makes it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(f) All the representations and warranties of the
Selling Stockholders contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and as of the
Closing Date and you shall have received a certificate to such effect, dated
the Closing Date, from each Selling Stockholder.
(g) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Xxxxxxxx Xxxxxx, counsel for the Company and the Selling
Stockholders, to the effect that:
(i) each of the Company and its subsidiaries
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
described in the Prospectus and to own, lease and operate its
properties;
(ii) each of the Company and its
subsidiaries 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 where the failure to be so
qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(iii) all the outstanding shares of
capital stock (including the Shares to be sold by the Selling
Stockholders) have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive or
similar rights;
(iv) the Shares have been duly
authorized, and when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, the Shares to be
issued and sold by the Company hereunder, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares is not
subject to any preemptive or similar rights;
(v) all of the outstanding shares of
capital stock of, or other ownership interests in, each of the
Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature;
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(vi) this Agreement has been duly
authorized, executed and delivered by the Company and each of the
Selling Stockholders and is a valid and binding agreement of the
Company and each Selling Stockholder enforceable in accordance with
its terms (except as rights to indemnity and contribution hereunder
may be limited by applicable law);
(vii) the authorized capital stock of the
Company conforms as to legal matters to the description thereof
contained in the Prospectus;
(viii) the Registration Statement has
become effective under the Act, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are,
to the best of such counsel's knowledge after due inquiry, pending
before or contemplated by the Commission;
(ix) the statements under the captions
"Risk Factors -- Anti-Takeover Provisions", "Risk Factors -- Shares
Eligible for Future Sale; Registration Rights", "Management --
Limitations on Liability", "-- Long Term Incentive Plan", "Principal
Shareholders", "Certain Transactions", "Description of Capital Stock",
"Shares Eligible For Future Sale" and "Underwriting" in the Prospectus
and Items 14 and 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings;
(x) neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws and,
to the best of such counsel's knowledge after due inquiry, neither the
Company nor any of its subsidiaries is in default in the performance
of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or
by which it or any of its subsidiaries or their respective property is
bound;
(xi) the execution, delivery and
performance of this Agreement by the Company and each Selling
Stockholder, compliance by the Company and each Selling Stockholder
with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent,
approval, authorization or other order of, or qualification with, any
court or other governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or the organizational documents of
any Selling Stockholder that is not an
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individual or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which it or any of its subsidiaries
or any Selling Stockholder is a party or by which it or any of its
subsidiaries or any Selling Stockholder or their respective property
is bound, or violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any other
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or any Selling Stockholder or their respective
property;
(xii) after due inquiry, such counsel does
not know of any legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of their respective property is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other document that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required;
(xiii) to the best of such counsel's
knowledge, after due inquiry, neither the Company nor any of its
subsidiaries has violated any Environmental Law or any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, except such violations which,
singly or in the aggregate, would not have a material adverse effect
on the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole;
(xiv) each of the Company and its
subsidiaries has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws, as are
necessary to own, lease and operate its respective properties and to
conduct its business and, to the best of such counsel's knowledge,
after due inquiry, are in compliance with all terms and conditions
thereof; and no event has occurred which allows or, after notice or
lapse of time or both, would allow, revocation or termination of such
permits or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
permit; and such permits contain no restrictions that are burdensome
to the Company or any of its subsidiaries; except where such failure
to have, or comply with the terms or conditions of, such permits, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole;
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(xv) the Company is not and, after giving
effect to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xvi) to the best of such counsel's
knowledge after due inquiry, except as disclosed in the Prospectus,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company or to require the Company to include
such securities with the Shares registered pursuant to the
Registration Statement;
(xvii) (A) the Registration Statement and
the Prospectus and any supplement or amendment thereto (except for the
financial statements and other financial and statistical data included
therein, as to which no opinion need be expressed) comply as to form
in all material respects with the Act, (B) such counsel has no reason
to believe that (except for the financial statements and other
financial and statistical data as to which such counsel need not
express any belief) at the time the Registration Statement became
effective and on the date of this Agreement, the Registration
Statement and the prospectus included therein 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 (C) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except
for the financial statements and other financial and statistical data,
as aforesaid) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(xviii) the Custody Agreement has been duly
authorized, executed and delivered by each Selling Stockholder and is
a valid and binding agreement of such Selling Stockholder enforceable
in accordance with its terms;
(xix) each Selling Stockholder has full
legal right, power and authority, and any approval required by law
(other than any approval imposed by the applicable state securities
and Blue Sky laws) to sell, assign, transfer and deliver the Shares to
be sold by him in the manner provided in this Agreement and the
Custody Agreement;
(xx) to the best of such counsel's
knowledge, after due inquiry, each Selling Stockholder has good and
clear title to the certificates for the Shares to be sold by him and
upon delivery thereof, pursuant hereto and
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payment therefor, good and clear title will pass to the Underwriters,
severally, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever;
(xxi) the power of attorney signed by each
Selling Stockholder appointing ______________ and ______________, or
either of them, as his attorney-in-fact to the extent set forth
therein with regard to the transactions contemplated hereby and by the
Registration Statement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and are valid
and binding instruments of such Selling Stockholder enforceable in
accordance with its terms, and pursuant to such power of attorney,
each of the Selling Stockholders has authorized ______________ and
______________, or either of them, to execute and deliver on their
behalf this Agreement and any other document necessary or desirable in
connection with transactions contemplated hereby and to deliver the
Shares to be sold by them pursuant to this Agreement;
(xxii) to the best of such counsel's
knowledge, after due inquiry, except as otherwise set forth in the
Registration Statement or such as are not material to the business,
prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes
not yet due and payable, to all property and assets described in the
Registration Statement as being owned by it; and
(xxiii) to the best of such counsel's
knowledge, after due inquiry, all leases to which the Company or any
of its subsidiaries is a party are valid and binding and no default
has occurred or is continuing thereunder, which might result in any
material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries
taken as a whole, and the Company and its subsidiaries enjoy peaceful
and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company or such subsidiary.
The opinion of Xxxxxxxx Xxxxxx described in paragraph (g)
above shall be rendered to you at the request of the Company or one or more of
the Selling Stockholders, as the case may be, and shall so state therein.
(h) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), counsel for the Underwriters, as to the matters referred to in
clauses (iv), (vi) (but only with respect to the Company), (ix) (but only with
respect to the statements under the captions "Description of
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Capital Stock" and "Underwriting") and (xvii) of the foregoing paragraph (g).
In giving such opinion with respect to the matters covered by clause (xvii)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
(i) You shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to you, from KPMG
Peat Marwick LLP, independent public accountants, containing the information
and statements of the type ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(j) The Company shall have delivered to you the
agreements specified in Section 2 hereof which agreements shall be in full
force and effect on the Closing Date.
(k) The Shares shall have been duly listed for
quotation on the Nasdaq National Market.
(l) The Company and the Selling Stockholders shall
not have failed at or prior to the Closing 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 Stockholders at or prior to the Closing
Date.
(m) You shall have received on the Closing Date, a
certificate of each Selling Stockholder who is not a U.S. Person to the effect
that such Selling Stockholder is not a U.S. Person (as defined under applicable
U.S. federal tax legislation), which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W-8 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the
applicable Option Closing Date of such documents as you may reasonably request
with respect to the good standing of the Company, title to the Additional
Shares and other matters related to the purchase of such Additional Shares.
SECTION 10. Effectiveness of Agreement and Termination.
This Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Sellers if any of the following
has occurred: (i) any outbreak or
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escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus, (ii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market or limitation on prices
for securities on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in
the over-the- counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any of its subsidiaries, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it or
they have agreed to purchase hereunder on such date and the aggregate number of
Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase on such date; provided that in no event shall the number of Firm
Shares or Additional Shares, as the case may be, which any Underwriter has
agreed to purchase pursuant to Section 2 hereof be increased pursuant to this
Section 10 by an amount in excess of one-ninth of such number of Firm Shares or
Additional Shares, as the case may be, without the written consent of such
Underwriter. If on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter and
the Sellers. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or
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refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one- tenth of the
aggregate number of Additional Shares to be purchased on such date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase such Additional Shares or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase on such date in the absence of such
default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 11. Agreements of the Selling Stockholders. Each
Selling Stockholder severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes
with respect to the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation
with the Company and the Underwriters to cause the Registration Statement to
become effective at the earliest possible time, to do and perform all things to
be done and performed under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares pursuant to this
Agreement.
SECTION 12. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (a) if to the
Company, to Falconite, Inc., 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, (b) if to the Selling Stockholders, to [NAME OF ATTORNEY-IN-FACT] c/o
[ADDRESS OF ATTORNEY-IN-FACT] and (c) if to any Underwriter or to you, to you
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Selling Stockholders,
the Company and the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Shares, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the officers or directors of any Underwriter, any person controlling any
Underwriter, the Sellers, the officers or directors of the Company or any
person controlling the Sellers, (ii) acceptance of the Shares and payment for
them hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf
of the Sellers as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Sellers agree to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
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Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
FALCONITE, INC.
By:
-----------------------------------
Title:
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II
HERETO
By:
-----------------------------------
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
-------------------------------
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SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ ----------------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxx Xxxxx & Company, L.L.C.
------------------
Total
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SCHEDULE II
Selling Stockholders
Number of Additional Shares
Name to be Purchased
---- ---------------------------
------------------
Total
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ANNEX I
Required Stockholder Lock-Ups
Falconite Investments, L.P.
Xxxxxx X. Xxxxxxxxx Revocable Trust
Xxxxxxx X. Xxxxxxxxx Revocable Trust
Xxxxx X. XxXxxxx Children's Trust
[Emilie Xxxxxx Xxxxxxxxx]
[Xxxxxx X. Xxxxx]
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