EXHIBIT 1.2
National Service Industries, Inc.
[$ ] [Preferred/Common Stock]
($ par value)
Underwriting Agreement
New York, New York
[date]
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
National Service Industries, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, [$] Preferred/Common] Stock, of the Company (the "Securities").
To the extent there are no additional Underwriters listed on Schedule I other
than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act or to information set forth or included
therein after the Effective Date of the Registration Statement, or the issue
date of the Basic Prospectus any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by reference.
[The Securities are convertible into shares of Common Stock, $1.00 par value, of
the Company (the "Common Stock").] Certain terms used herein are defined in
Section 17 hereof.
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of which
has previously been furnished to you. The Company will next file with the
Commission one of the following: (1) after the Effective Date of such
registration statement,
a final prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b), (2) prior to the Effective Date of such registration
statement, an amendment to such registration statement (including the form
of final prospectus supplement) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (1), the Company has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Final Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date, the Final Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit 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; provided, however, that the Company makes no
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representations or warranties as to the information contained in or omitted
from the Registration Statement, or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) Each of the Company and each subsidiary listed on Schedule III
(which are all the significant subsidiaries as defined in Rule 1-02 to
Regulation S-X of the Commission (the "Significant Subsidiaries")) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Final Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
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(d) All the outstanding shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock of the Significant
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the Securities [and the Common Stock] conform[s] in
all material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities [and the shares of Common Stock issuable upon conversion of the
Securities] are duly listed, and admitted and authorized for trading
subject to official notice of issuance [and evidence of satisfactory
distribution] on the ,]: [the shares of Common Stock initially issuable
upon conversion of the Securities] have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on the New
York Stock Exchange; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Final Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding;
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required[; and the statements in the Final Prospectus under the heading
"Tax Matters" and, " " fairly summarize the matters therein described].
(g) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, creditors' rights
generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether considered in a
proceeding in equity or at law).
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the
Final Prospectus.
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(j) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its Significant Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of its subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its Significant
Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its Significant Subsidiaries of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its Significant Subsidiaries or any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which have
not been waived.
(l) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Final
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under the
caption "Selected Financial Information" in the Final Prospectus and
Registration Statement fairly present, on the basis stated in the Final
Prospectus and the Registration Statement, the information included
therein. [The pro forma financial statements included in the Final
Prospectus and the Registration Statement include assumptions that provide
a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and the
pro forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus and the Registration Statement.
The pro forma financial statements included in the Final Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements.]
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(n) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted, except to the extent that the failure to own or lease
such properties would not have a material adverse
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effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(o) Neither the Company nor any subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except in the case of
(ii) and (iii) such as would not reasonably be expected to have a material
adverse effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(p) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Final Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(r) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto)) and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have a material
adverse effect on the financial condition, prospective financial condition,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(s) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or to the knowledge of the Company is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance affecting it or any subsidiary that would have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business, or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business,
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except as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(t) The Company and each of its subsidiaries are insured, which may
include self-insurance, in such amounts as are reasonable and in accordance with
sound industry practice taking into account the nature of their respective
businesses, on all of their respective properties in at least such amounts and
against at least such risks as are usually insured against in the same
geographic area by companies of established repute engaged in the same or
similar business; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and its subsidiaries are in compliance with the terms of such policies
and instruments in all material respects; and there are no material claims by
the Company or any of its subsidiaries under any such policy or instrument as to
which any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a material adverse effect on the financial condition,
prospective financial condition, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(u) No subsidiary organized under the laws of any State in the United
States of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company, except as described in or contemplated by the Final Prospectus .
(v) The Company and its subsidiaries possess all material licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the financial condition, prospective financial
condition, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain 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
material differences.
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(x) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(y) The Company and its subsidiaries are (i) in material compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
material adverse change in the financial condition, prospective financial
condition, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto). Except as set forth in the
Final Prospectus, neither the Company nor any of the subsidiaries has been named
as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(z) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (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). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(aa) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and its subsidiaries are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(bb) The Company and its subsidiaries own, possess, license or have
other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual
7
Property") necessary for the conduct of the Company's business in all
material respects as now conducted or as proposed in the Final Prospectus
to be conducted.
(cc) Except as disclosed in the Registered Statement and the Final
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of the Underwriters and
(ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any affiliate of
the Underwriters.
(dd) The Company and its subsidiaries are implementing a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and
reasonably believes that such risk will be remedied on a timely basis
without material expense and will not have a material adverse effect upon
the financial condition and results of operations of the Company and its
subsidiaries, taken as a whole; and the Company has taken reasonably steps
to provide reasonable assurances that each supplier, vendor, customer or
financial service organization used or serviced by the Company and its
subsidiaries has remedied or will remedy on a timely basis the Year 2000
Problem, except to the extent that a failure to remedy by any such
supplier, vendor, customer or financial service organization would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole. The Company is in compliance with the Commissions staff legal
bulletin No. 5 dated January 12, 1998 related to Year 2000 compliance, as
amended to date.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ per
share, [plus accrued dividends, if any, with respect to Securities from ,
19 , to the Closing Date,] the amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made on the date and at the time specified in Schedule I hereto or at
such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Securities shall be made through the facilities
of The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
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5. Agreements. The Company agrees with the several Underwriters that:
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(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof, to
become effective. Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final Prospectus)
to the Basic Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Final Prospectus is
otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the Representatives
of such timely filing. The Company will promptly advise the Representatives (1)
when the Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (2) when the Final Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission,(3) when, prior to
termination of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective,(4) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the Final
Prospectus or for any additional information,(5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event; (2) prepare and file with the Commission, subject
to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance; and (3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits
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thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the expenses
of printing or other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities [and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering]; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) Until the Business Day set forth on Schedule I hereto, the
Company will not, without the prior written consent of , offer, sell or
contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any (i) other shares of [Preferred/Common] Stock or any securities
convertible into, or exchangeable for, shares of [Preferred/Common] Stock,
[(ii) debt securities issued or guaranteed by the Company or (iii) shares
of any class of Capital Stock of the Company (other than the Securities)
which is preferred as to the payment of dividends, or as to the
distribution of assets upon any liquidation or dissolution of the Company,
over shares of any other class of capital stock of the Company]; provided,
however, that the Company may issue and sell [Preferred/Common] Stock
pursuant to any long-term incentive plan, stock purchase plan, stock
ownership plan, rights agreement or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue
[Preferred/Common] Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred
10
after 3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b),
the Final Prospectus, and any such supplement, will be filed in the manner
and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have caused King & Spalding, counsel for the
Company, to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and National Service Industries, Inc.,
a Georgia corporation, NSI Enterprises, Inc., a California corporation
and Zep Manufacturing Company, a Delaware company (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the financial
condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto);
(ii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities [and the Common Stock]
conform[s] in all material respects to the description thereof
contained in the Final Prospectus; [the Securities [and the shares of
Common Stock issuable upon conversion of the Securities] are duly
listed, and admitted and authorized for trading subject to official
notice of issuance [and evidence of satisfactory distribution] on the
,]; [the shares of Common Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for
issuance upon such conversion and, when issued upon conversion, will
be validly issued, fully paid and nonassessable]; the Securities [and
the shares of Common Stock issuable upon conversion of the Securities]
have been duly and validly authorized, and, when issued and delivered
to and paid for by the Underwriters pursuant to this Agreement, will
be fully paid and nonassessable; the certificates for the Securities
are in valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in
the Final Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any
11
securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as
required; [and the statements included or incorporated by reference in
the Final Prospectus under the heading[s] "Tax Matters", " " and
" " fairly summarize the matters therein described;
(v) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the respective rules thereunder; and such counsel has
no reason to believe that on the Effective Date or at the Execution
Time the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus as of its date and on the
Closing Date included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make
the state ments therein, in the light of the circumstances under which
they were made, not misleading (in each case, other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion);
(vi) this Agreement has been duly authorized, executed and
delivered by the Company (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, creditors' rights generally
from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law);
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the
12
purchase and distribution of the Securities by the Underwriters in the
manner contemplated in this Agreement and in the Final Prospectus and
such other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or
its subsidiaries, (ii) to the knowledge of such counsel, the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or its subsidiaries is a
party or bound or to which its or their property is subject, or (iii)
to the knowledge of such counsel, any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or its subsidiaries or any of its or their
properties; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials and, (C) as to such matters as are acceptable
to the Representatives, upon the opinion of counsel, who may be an employee
of the Company. References to the Final Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board, the
President or any Executive Vice President and the Treasurer or the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplements
to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
13
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on the
financial condition, prospective financial condition, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(e) The Company shall have caused Xxxxxx Xxxxxxxx LLP to have furnished to
the Representatives, at the Execution Time and at the Closing Date, letters,
(which may refer to letters previously delivered to one or more of the
Representatives), dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the -month period ended
, and as at , in accordance with Statement on Auditing Standards
No. 71 and stating in effect except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and financial
statement schedules [and pro forma financial statements] included or
incorporated by reference in the Registration Statement and the Final
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the -month period ended and as at [as indicated in
their report dated incorporated by reference in the Registration Statement
and the Final Prospectus]; carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the minutes
of the meetings of the stockholders, directors and [the executive, audit
and finance committees, if any] of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to , nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included or incorporated
by reference in the Registration Statement and the Final Prospectus do
not comply as to form in all material respects with applicable
accounting requirements of the Act and with the published rules and
regulations of the Commission with respect
14
to financial statements included or incorporated by reference in
quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to , there were
any changes, at a specified date not more than five days prior to the
date of the letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or decreases in the
stockholders' equity of the Company or decreases in working capital of
the Company and its subsidiaries as compared with the amounts shown on
the most recent consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Final Prospectus, or
for the period from to such specified date there were any decreases,
as compared with the corresponding period in the preceding year or,
the corresponding period in the preceding quarter, in net income
before income taxes or in total or per share amounts of net income of
the Company and its subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives;
(3) the information included or incorporated by reference in the
Registration Statement and Final Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive Compensation) and Item
503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation S-K; or
(4) the unaudited amounts of [describe the capsule information
and its location] do not agree with the amounts set forth in the
unaudited financial statements for the same periods or were not
determined on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements included or
incorporated by reference in the Registration Statement and the Final
Prospectus; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Final Prospectus and in Exhibit 12 to the Registration Statement,
including the information set forth under the captions " " and "
" in the Final Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report on Form
10-K, incorporated by reference in the Registration Statement and the Final
Prospectus, and the information included in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports on Form 10-Q,
incorporated by reference in the Registration Statement and the Final
Prospectus, agrees with the accounting records
15
of the Company and its subsidiaries, excluding any questions of legal
interpretation; and
(iv) on the basis of a reading of the unaudited pro forma financial
statements included or incorporated by reference in the Registration
Statement and the Final Prospectus (the "pro forma financial statements");
carrying out certain specified procedures; inquiries of certain officials
of the Company [and [insert name of acquired company, if appropriate]] who
have responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
[(h) The Securities shall have been listed and admitted and authorized
for trading on the , and satisfactory evidence of such actions shall
have been provided to the Representatives.]
(i) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
[each officer and director of the Company] addressed to the
Representatives.
(j) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
16
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Xxxxx, counsel for the
Underwriters, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, on the
Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through [ ] on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. The Company agrees to indemnify
---------------------------------
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent that any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein; provided further, that with
----------------
respect to any untrue statement or omission of material fact made in any
Preliminary Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the securities concerned, to
the extent that any such loss, claim, damage or liability of such Underwriter
occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company
had previously furnished copies of the Prospectus to the Representatives, (x)
delivery of the Prospectus was required by the Act to be made to such person,
(y) the untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such
17
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with refer
ence to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth [in the last paragraph of the cover page regarding delivery
of the Securities, the legend in block capital letters on page [2] related to
stabilization, syndicate covering transactions and penalty bids and, under the
heading "Underwriting" or "Plan of Distribution", (i) the sentences related to
concessions and reallowances and (ii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids] in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, 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.
18
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
-------- -------
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
-------- -------
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine
19
in order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancelation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the General Counsel and confirmed to the General
Counsel, at the address specified in Schedule I hereto, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(000) 000-0000 and confirmed to it at 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, XX
00000-0000, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
-------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
---------
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
------------
shall have the meanings indicated.
20
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or Atlanta,
Georgia.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in para graph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415","Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
National Service Industries, Inc.
By: __________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in
Schedule I hereto.
and
By:
By: ______________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement
22
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF CERTAIN OFFICER, DIRECTOR OR MAJOR SHAREHOLDER OF
CORPORATION]
National Service Industries, Inc.
---------------------------------
Public Offering of [Preferred/Common] Stock
-------------------------------------------
, 19
[NAME OF COMANAGERS, IF ANY]
As Representative[s] of the several Underwriters,
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between National Services
Industries, Inc., a Delaware corporation (the "Company"), and [each of] you as
representative[s] of a group of Underwriters named therein, relating to an
underwritten public offering of [Preferred/Common] Stock, $ par value (the
"[Preferred/Common] Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of , offer, sell, contract to sell, pledge or otherwise dispose
of, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or exchangeable for
such capital stock, or publicly announce an intention to effect any such
transaction, for a period of days after the date of this Agreement, other
than shares of Common Stock disposed of as bona fide gifts approved by .
23
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title: [Preferred/Common] Stock
Number of Shares to be sold by the Company:
Price to Public per Share (include accrued dividends, if any):
Price to Public -- total:
Underwriting Discount per Share:
Underwriting Discount -- total:
Proceeds to Company per Share:
Proceeds to Company -- total:
Other provisions:
Closing Date, Time and Location:
Type of Offering: Non-delayed
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s):
Modification of items to be covered by the letter from Xxxxxx Xxxxxxxx LLP
delivered pursuant to Section 6(e) at the Execution Time:
Address for Notices to the Underwriters Pursuant to Section 12:
24
SCHEDULE II
UNDERWRITERS PRINCIPAL NUMBER
------------ OF UNDERWRITTEN
SECURITIES TO
BE PURCHASED
----------------
...................................... $
____________________
Total................................. $
====================
25
SCHEDULE III
SIGNIFICANT SUBSIDIARIES
------------------------
26
