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TS&H Draft 12/14/95
LSI INDUSTRIES INC.
1,800,000 Common Shares*
UNDERWRITING AGREEMENT
___________________, 199__
XXXXXX X. XXXXX & CO. INCORPORATED
X.X. XXXXXXX & SONS, INC.
THE OHIO COMPANY
As Representatives of the Several Underwriters
Identified in Schedule II Annexed Hereto
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. LSI Industries Inc., an Ohio
corporation (the "Company"), and the several shareholders of the Company
identified in Schedule I annexed hereto (the "Selling Shareholders") propose to
sell 1,800,000 shares (the "Firm Shares") of common shares, without par value
(the "Common Shares"), to the several underwriters identified in Schedule II
annexed hereto (the "Underwriters"), who are acting severally and not jointly.
In addition, the Company and the Selling Shareholders have agreed to grant to
the Underwriters an option to purchase up to 270,000 additional Common Shares
(the "Optional Shares") as provided in section 6 hereof. The Firm Shares and,
to the extent such option is exercised, the Optional Shares are hereinafter
collectively referred to as the "Shares."
You, as representatives of the Underwriters (the
"Representatives"), have advised the Company and the Selling Shareholders that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon hereafter as in your judgment is advisable and that the
public offering price of the Shares initially will be [$_____] per share.
The Company and the Selling Shareholders hereby confirm their
respective agreements with the Underwriters and each other as follows:
__________________________________
* Plus an option to acquire up to 270,000 additional Common Shares from
the Company and the Selling Shareholders to cover over-allotments.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE PRINCIPAL SHAREHOLDERS. The Company and each of Xxxxxx X. Ready, Xxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx, Xx. (together, the "Principal
Shareholders"), jointly and severally, represent and warrant to, and agree
with, the several Underwriters, and shall be deemed to represent and warrant to
the several Underwriters on each Closing Date (as hereinafter defined), that:
(a) Each of the Company and the subsidiaries of the
Company that are listed on Exhibit 21.1 of the Company's most recent
Annual Report on Form 10-K incorporated by reference into the
Registration Statement (as hereinafter defined) (individually, a
"Subsidiary" and collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation and in good
standing under the laws of its jurisdiction of incorporation, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and
described in the Prospectus (as hereinafter defined) and the
Registration Statement; each of the Company and the Subsidiaries is
duly registered and qualified to do business as a foreign corporation
under the laws of, and is in good standing as such in, each
jurisdiction in which such registration or qualification is required,
except where the failure to so register or qualify would not have a
material adverse effect on the condition (financial or other),
business, property, net worth, results of operations or prospects of
the Company and the Subsidiaries, taken as a whole ("Material Adverse
Effect"); and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification. Complete
and correct copies of the articles of incorporation and code of
regulations, as amended or restated ("Articles of Incorporation" and
"Regulations," respectively), of the Company and each of the
Subsidiaries as in effect on the date hereof have been delivered to
the Representatives, and no changes thereto will be made on or
subsequent to the date hereof and prior to each Closing Date.
(b) The Common Shares issued and outstanding immediately
prior to the issuance and sale of the Shares to be sold by the Company
hereunder as set forth in the Prospectus have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the
description thereof contained in the Prospectus and the Registration
Statement. There are no preemptive, preferential or, except as
described in the Prospectus, other rights to subscribe for or purchase
any Common Shares (including the Shares), and no Common Shares have
been issued in violation of such rights. The Shares to be issued and
sold by the Company to the Underwriters have been duly authorized and,
when issued, delivered and paid for pursuant to this Agreement, will
be validly issued, fully paid and nonassessable and will conform to
the description thereof contained in the Prospectus and the
Registration Statement. The delivery of certificates for the Shares
to be issued and sold by the Company hereunder and payment therefor
pursuant to the terms of this Agreement will pass valid title to such
Shares to the Underwriters, free and clear of any lien, claim,
encumbrance or defect in title. Except as described in the
Prospectus, there are no outstanding options, warrants or other rights
of any description, contractual or otherwise, entitling any person to
be issued any class of security by the Company or any Subsidiary, and
there are no holders of Common
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Shares or other securities of the Company or any Subsidiary, or of
securities that are convertible or exchangeable into Common Shares or
other securities of the Company or any Subsidiary, that have rights to
the registration of such Common Shares or securities under the
Securities Act of 1933, as amended, and the regulations thereunder
(together, the "Act") or the securities laws or regulations of any of
the states (the "Blue Sky Laws").
(c) Except for the Subsidiaries, and as otherwise set
forth in the Prospectus, the Company has no subsidiaries and does not
own any equity interest in or control, directly or indirectly, any
other corporation, limited liability company, partnership, joint
venture, association, trust or other business organization. The
Company owns directly all of the issued and outstanding capital stock
of each Subsidiary, free and clear of any and all liens, claims,
encumbrances or security interests, and all such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable. There are no outstanding options, warrants or other
rights of any description, contractual or otherwise, entitling any
person to subscribe for or purchase any shares of capital stock of any
Subsidiary.
(d) The Company has full corporate power and authority to
enter into and perform this Agreement, and the execution and delivery
by the Company of this Agreement and the performance by the Company of
its obligations hereunder and the consummation of the transactions
described herein, have been duly authorized with respect to the
Company by all necessary corporate action and will not: (i) violate
any provisions of the Articles of Incorporation or Code of Regulations
of the Company or any Subsidiary; (ii) violate any provisions of, or
result in the breach, modification or termination of, or constitute a
default under, any provision of any agreement, lease, franchise,
license, indenture, permit, mortgage, deed of trust, evidence of
indebtedness or other instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary, or
any property owned or leased by the Company or any Subsidiary, may be
bound or affected; (iii) violate any statute, ordinance, rule or
regulation applicable to the Company or any Subsidiary, or order or
decree of any court, regulatory or governmental body, arbitrator,
administrative agency or instrumentality of the United States or other
country or jurisdiction having jurisdiction over the Company or any
Subsidiary; or (iv) result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any Subsidiary. No consent, approval, authorization or other order of
any court, regulatory or governmental body, arbitrator, administrative
agency or instrumentality of the United States or other country or
jurisdiction is required for the execution and delivery of this
Agreement by the Company, the performance of its obligations hereunder
or the consummation of the transactions contemplated hereby, except
for compliance with the Act, the Securities Exchange Act of 1934, as
amended, and the regulations thereunder (together, the "Exchange
Act"), the Blue Sky Laws applicable to the public offering of the
Shares by the several Underwriters and the clearance of such offering
and the underwriting arrangements evidenced hereby with the National
Association of Securities Dealers, Inc. (the "NASD"). This Agreement
has been duly executed and delivered by and on behalf of the
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Company and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms.
(e) A registration statement on Form S-3 (Reg. No.
33-_______) with respect to the Shares, including a preliminary form
of prospectus, has been prepared by the Company in conformity with the
requirements of the Act and has been filed with the Securities and
Exchange Commission (the "Commission"). The conditions for use of
Form S-3, set forth in the General Instructions thereto, have been
satisfied. Such registration statement, as finally amended and
revised at the time such registration statement was or is declared
effective by the Commission (including the information contained in
the form of final prospectus, if any, filed with the Commission
pursuant to Rule 424(b) and Rule 430A under the Act and deemed to be
part of the registration statement if the registration statement has
been declared effective pursuant to Rule 430A(b)) and as thereafter
amended by post-effective amendment, if any, is herein referred to as
the "Registration Statement." The related final prospectus in the
form first filed with the Commission pursuant to Rule 424(b) or, if no
such filing is required, as included in the Registration Statement, or
any supplement thereto, is herein referred to as the "Prospectus."
The prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and each such prospectus
as amended from time to time until the date of the Prospectus, is
referred to herein as the "Preliminary Prospectus." Reference made
herein to each Preliminary Prospectus or the Prospectus, as amended or
supplemented, shall include all documents and information incorporated
by reference therein and shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, and so incorporated by reference,
under the Exchange Act. The Company has prepared and filed such
amendments to the Registration Statement since its initial filing with
the Commission, if any, as may have been required to the date hereof,
and will file such additional amendments thereto as may hereafter be
required. There have been delivered to the Representatives three
signed copies of the Registration Statement and each amendment
thereto, if any, including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Registration
Statement, together with three copies of each exhibit filed therewith
or incorporated by reference therein, and such number of conformed
copies for each of the Underwriters of the Registration Statement and
each amendment thereto, if any (but without exhibits), and of each
Preliminary Prospectus and of the Prospectus as the Representatives
have requested.
(f) Neither the Commission nor any state securities
commission has issued any order preventing or suspending the use of
any Preliminary Prospectus, nor, to the knowledge of the Company or
the Principal Shareholders, have any proceedings for that purpose been
initiated or threatened, and each Preliminary Prospectus filed with
the Commission as part of the Registration Statement as originally
filed or as part of any amendment or supplement thereto complied when
so filed with the requirements of the Act and, as of its date, did not
include any untrue statement of a material fact or omit to state a
material fact required to be
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stated therein or necessary to make the statements therein not
misleading. As of the effective date of the Registration Statement,
and at all times subsequent thereto up to each Closing Date, the
Registration Statement and the Prospectus contained or will contain
all statements that are required to be stated therein in accordance
with the Act and conformed or will conform in all respects to the
requirements of the Act, and neither the Registration Statement nor
the Prospectus included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Neither the Company, nor any person that controls, is
controlled by (including the Subsidiaries) or is under common control
with the Company, has distributed or will distribute prior to each
Closing Date any offering material in connection with the offering and
sale of the Shares other than a Preliminary Prospectus, the
Prospectus, the Registration Statement or other materials permitted by
the Act and provided to the Representatives.
(g) The documents that are incorporated by reference in
each Preliminary Prospectus, the Prospectus or the Registration
Statement or from which information is so incorporated by reference,
when they became effective or were filed with the Commission, as the
case may be, complied with the requirements of the Act or the Exchange
Act, as applicable, and any document so filed and incorporated by
reference subsequent to the effective date of the Registration
Statement shall, when it is filed with the Commission, comply with the
requirements of the Act and the Exchange Act, as applicable, and when
read together with the other information included in such Preliminary
Prospectus, the Prospectus or the Registration Statement, as the case
may be, do not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(h) To the best knowledge of the Company and Principal
Shareholders, Price Waterhouse LLP, which has expressed its opinion
with respect to the consolidated financial statements and schedules
filed with the Commission or incorporated by reference and included as
a part of each Preliminary Prospectus, the Prospectus or the
Registration Statement are independent accountants as required by the
Act.
(i) The consolidated financial statements and the related
notes thereto included or incorporated by reference in each
Preliminary Prospectus, the Prospectus and the Registration Statement
present fairly the financial position, results of operations and cash
flows of the Company as of their respective dates or for the
respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the
periods involved. The financial statement schedules, if any, included
in the Registration Statement present fairly the information required
to be stated therein on a basis consistent with the consolidated
financial statements of the Company contained therein. The Company
had an outstanding capitalization as set forth in the Registration
Statement and under "Capitalization" in the Prospectus as of the date
indicated
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therein, and there has been no material change thereto since such date
except as disclosed in the Prospectus. The financial and statistical
information and data relating to the Company in each Preliminary
Prospectus, the Prospectus and the Registration Statement are
accurately presented and prepared on a basis consistent with the
audited consolidated financial statements and books and records of the
Company. The consolidated financial statements and schedules and the
related notes thereto included or incorporated by reference in each
Preliminary Prospectus, the Prospectus or the Registration Statement
are the only such financial statements and schedules required under
the Act to be set forth therein.
(j) Neither the Company nor any Subsidiary is, nor with
the giving of notice or passage of time or both, would be, in
violation or in breach of: (i) its respective Articles of
Incorporation or Regulations; (ii) any statute, ordinance, order, rule
or regulation applicable to the Company or such Subsidiary; (iii) any
order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or
other country or jurisdiction having jurisdiction over the Company or
such Subsidiary; or (iv) any provision of any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument to which the Company or
such Subsidiary is a party or by which any property owned or leased by
the Company or such Subsidiary is bound or affected. Neither the
Company nor any Subsidiary has received notice of any violation of any
applicable statute, ordinance, order, rule or regulation applicable to
the Company or any Subsidiary. The Company and each Subsidiary have
obtained and hold, and are in compliance with, all permits,
certificates, licenses, approvals, registrations, franchises, consents
and authorizations of governmental or regulatory authorities required
under all laws, rules and regulations in connection with their
businesses (hereinafter "permit" or "permits"), and all of such
permits are in full force and effect; and the Company and each
Subsidiary have fulfilled and performed all of their respective
obligations with respect to each such permit and no event has occurred
which would result in, or after notice or lapse of time would result
in, revocation or termination of any such permit or result in any
other impairment of the rights of the holder of such permit. Neither
the Company nor any Subsidiary is or has been (by virtue of any
action, omission to act, contract to which it is a party or other
occurrence) in violation of any applicable foreign, federal, state,
municipal or local statutes, laws, ordinances, rules, regulations or
orders (including those relating to environmental protection,
occupational safety and health and equal employment practices)
heretofore or currently in effect.
(k) There are no legal or governmental proceedings or
investigations pending or, to the knowledge of the Company or the
Principal Shareholders, threatened, to which the Company or any
Subsidiary is or may be a party or to which any property owned or
leased by the Company or any Subsidiary is or may be subject,
including, without limitation, any such proceedings that are related
to environmental or employment discrimination matters, which are
required to be described in the Registration Statement or the
Prospectus which are not so described, or which question the validity
of this Agreement or any action taken or to be taken pursuant hereto.
Except as described in the Registration Statement
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or the Prospectus, neither the Company nor any Subsidiary: (i) is in
violation of any statute, ordinance, rule or regulation, or any
decision, order or decree of any court, regulatory body, arbitrator,
administrative agency or other instrumentality of the United States or
other country or jurisdiction having jurisdiction over the Company or
such Subsidiary relating to the use, disposal or release of hazardous
or toxic substances or relating to the protection or restoration of
the environmental or human exposure to hazardous or toxic substances
(collectively, "environmental laws"); (ii) owns or operates any real
property contaminated with any substance that is subject to any
environmental laws; (iii) is liable for any off-site disposal or
contamination pursuant to any environmental laws; or (iv) is subject
to any claim relating to any environmental laws, which violation,
contamination, liability or claim could have a Material Adverse
Effect.
(l) There is no transaction, relationship, obligation,
agreement or other document required to be described in the
Registration Statement or the Prospectus or to be filed or deemed to
be filed as an exhibit to the Registration Statement by the Act, which
has not been described or filed as required. All such contracts or
agreements to which the Company or any Subsidiary is a party have been
duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or
such Subsidiary, and are enforceable by and against the Company or
such Subsidiary, in accordance with the respective terms thereof.
(m) The Company or a Subsidiary has good and valid title
to all property and assets reflected as owned by the Company or such
Subsidiary in the Company's consolidated financial statements included
or incorporated by reference in the Registration Statement (or
elsewhere in the Registration Statement or the Prospectus), free and
clear of all liens, claims, mortgages, security interests or other
encumbrance of any kind or nature whatsoever except those, if any,
reflected in such financial statements (or elsewhere in the
Registration Statement or the Prospectus). All property (real and
personal) held or used by the Company or a Subsidiary under leases,
licenses, franchises or other agreements is held by the Company or
such Subsidiary under valid, subsisting, binding and enforceable
leases, franchises, licenses or other agreements.
(n) Neither the Company nor any person that controls, is
controlled by (including the Subsidiaries) or is under common control
with the Company has taken or will take, for a period of at least 180
days from the date hereof directly or indirectly, any action designed
to cause or result in, or which constituted, or which could cause or
result in, stabilization or manipulation, under the Exchange Act or
otherwise, of the price of any security of the Company to facilitate
the sale or resale of the Common Stock.
(o) Except as described in the Registration Statement or
the Prospectus, since the respective dates as of which information is
given in the Registration Statement or the Prospectus and prior to
each Closing Date: (i) neither the Company nor any Subsidiary has or
will have incurred any liability or obligation, direct or contingent,
or entered into any transaction, that is material to the
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Company, except as in the ordinary course of business; (ii) the
Company has not and will not have paid or declared any dividend or
other distribution with respect to its capital stock and neither the
Company nor any Subsidiary is or will be delinquent in the payment of
principal or interest on any outstanding debt obligation; and (iii)
there has not been and will not have been any change in the capital
stock, any material change in the indebtedness of the Company or any
Subsidiary, or any change or development involving or which could be
expected to involve, a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business.
(p) Neither the Company nor any person that controls, is
controlled by (including the Subsidiaries) or is under common control
with the Company has, directly or indirectly: (i) made any unlawful
contribution to any candidate for political office, or failed to
disclose fully any contribution in violation of law; or (ii) made any
payment to any federal, state or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(q) The Company or a Subsidiary owns or possesses
adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses presently used in or necessary
for the conduct of its business or ownership of its properties, and
neither the Company nor any Subsidiary has violated or infringed upon
the rights of others, or received any notice of conflict with the
asserted rights of others, in respect thereof that could result in a
Material Adverse Effect.
(r) The Company or a Subsidiary has in place and
effective such policies of insurance, with limits of liability in such
amounts, as are normal and prudent in the ordinary course of the
business of the Company and its Subsidiaries.
(s) No labor dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company and the
Principal Shareholders, is imminent, and neither the Company nor any
Subsidiary is a party to any collective bargaining agreement and, to
the knowledge of the Company and the Principal Shareholders, no union
organizational attempts have occurred or are pending. There has been
no change in the relationship of the Company or any Subsidiary with
any of its principal suppliers, manufacturers, contractors or
customers resulting in or that could result in a Material Adverse
Effect.
(t) Neither the Company nor any Subsidiary is an
"investment company", an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
(u) All federal, state and local tax returns required to
be filed by or on behalf of the Company or any Subsidiary have been
filed (or are the subject of valid extension) with the appropriate
federal, state and local authorities, and all
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such tax returns, as filed, are accurate in all material respects; all
federal, state and local taxes (including estimated tax payments)
required to be shown on all such tax returns or claimed to be due from
or with respect to the business of the Company or such Subsidiary have
been paid or reflected as a liability on the financial statements of
the Company or such Subsidiary for appropriate periods; all
deficiencies asserted as a result of any federal, state or local tax
audits have been paid or finally settled, and no issue has been raised
in any such audit which, by application of the same or similar
principles, reasonably could be expected to result in a proposed
deficiency for any other period not so audited; no state of facts
exist or has existed which would constitute grounds for the assessment
of any tax liability with respect to the periods which have not been
audited by appropriate federal, state or local authorities; there are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state or local tax return of any
period; and neither the Company nor any Subsidiary has ever been a
member of an affiliated group of corporations filing consolidated
federal income tax returns, other than a group of which the Company is
and has been the common parent.
(v) Except for the Company's [name each group health,
life, disability or other welfare plan] and its [name any contributory
or noncontributory defined contribution retirement plan and defined
benefit retirement plans] (collectively, the "Plans"), neither the
Company nor any Subsidiary is a participating employer or plan sponsor
with respect to any employee pension benefit plan as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any employee welfare benefit plan as defined
in Section 3(1) of ERISA, including, without limitation, any
multiemployer welfare or pension plan. With respect to the Plans, the
Company is in substantial compliance with all applicable regulations,
including ERISA and the Code. With respect to each defined benefit
retirement plan, such plan does not have benefit liabilities (as
defined in Section 4001(a)(16) of ERISA) exceeding the assets of the
plan. The Company or the administrator of each of the Plans, as the
case may be, has timely filed the reports required to be filed by
ERISA and the Code in connection with the maintenance of the Plans,
and no facts, including, without limitation, any "reportable event" as
defined by ERISA and the regulations thereunder, exist in connection
with the Plans which, under applicable law, would constitute grounds
for the termination of any of the Plans by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United
States District Court of a trustee to administer any of the Plans.
(w) The Company and each Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of consolidated financial
statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
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(x) None of the Company, any Subsidiary, any officer or
director of the Company or any Subsidiary, or any person who owns, of
record or beneficially, any class of securities issued by the Company
is: (i) an officer, director or partner of any brokerage firm, broker
or dealer that is a member of the NASD ("NASD Member"); or (ii)
directly or indirectly, a "person associated with" an NASD member or
an "affiliate" of an NASD member, as such terms are used in the NASD
Rules of Fair Practice. In addition, neither the Company nor any
Subsidiary has issued or transferred any Common Shares, warrants,
options or other securities, or any other items of value, to any of
the Underwriters or any "related person" of any Underwriter, as such
term is used in the NASD Rules of Fair Practice, except as provided in
this Agreement.
(y) The Common Shares have been registered pursuant to
Section 12(g) of the Exchange Act. The Company has prepared and filed
with the Commission a registration statement for the Common Shares
pursuant to Section 12(g) of the Exchange Act. Such registration
statement either has been declared effective by the Commission under
the Exchange Act or will be declared effective by the Commission prior
to or concurrently with the commencement of the public offering of the
Shares. The Common Stock has been approved for designation upon
notice of issuance as a Nasdaq National Market security on the Nasdaq
National Market ("Nasdaq") concurrently with the effectiveness of the
Registration Statement.
(z) Neither the Company, any Subsidiary nor any affiliate
of the Company or such Subsidiary does business with the government of
Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075 of the Florida Statutes, and the Company
agrees to comply with such Section if, prior to the completion of the
distribution of the Shares, the Company, any Subsidiary or any
affiliate of the Company or such Subsidiary commences doing such
business.
(aa) All offers and sales of the securities of the Company
and each Subsidiary prior to the date hereof were made in compliance
with the Act and all other applicable state and federal laws or
regulations.
(bb) The Company has obtained for the benefit of the
Underwriters the agreement, enforceable by Xxxxxx X. Xxxxx & Co.
Incorporated ("Baird"), of each of the officers and directors of the
Company that, for a period of 180 days after the date of the
Prospectus, such persons will not, without the prior written consent
of Baird, directly or indirectly, offer, sell, transfer, or pledge,
contract to sell, transfer or pledge, or cause or in any way permit to
be sold, transferred, pledged, or otherwise disposed of, any: (i)
Common Shares; (ii) rights to purchase Common Shares (including,
without limitation, Common Shares that may be deemed to be
beneficially owned by any such shareholder in accordance with the
applicable regulations of the Commission and Common Shares that may be
issued upon the exercise of a stock option, warrant or other
convertible security); or (iii) securities that are convertible or
exchangeable into Common Shares.
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(cc) A copy of the Durable Power of Attorney and Custody
Agreement executed by each Selling Shareholder and a copy of each
Selling Shareholder's Selling Shareholder's Questionnaire has been
furnished to counsel for the Underwriters prior to the date hereof,
along with such other information as such counsel may reasonably
request in connection with their review thereof.
A certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company and the Principal
Shareholders to the Underwriters as to the matters covered thereby. A
certificate delivered by the Company to its counsel for purposes of enabling
such counsel to render the opinion referred to in section 10(d) will also be
furnished to the Representatives and counsel for the Underwriters and shall be
deemed to be additional representations and warranties to the Underwriters by
the Company as to the matters covered thereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder, severally and not jointly, represents
and warrants to and agrees with the several Underwriters and the Company, and
shall be deemed to represent and warrant to the several Underwriters and the
Company on each Closing Date, that:
(a) Such Selling Shareholder has duly executed a durable
power of attorney and custody agreement ("Durable Power of Attorney
and Custody Agreement") naming ________________ and
___________________, or either of them, as such Selling Shareholder's
attorney(s)-in-fact ("Attorneys-in-Fact") for the purpose of entering
into and carrying out this Agreement and naming ___________________ as
custodian ("Custodian") of the Shares of such Selling Shareholder for
the purpose of selling such Shares to the Underwriters on each Closing
Date and receiving payment therefor.
(b) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Shareholder
of this Agreement and the Durable Power of Attorney and Custody
Agreement and for the sale and delivery of the Shares to be sold by
such Selling Shareholder hereunder, as set forth on Schedule I annexed
hereto, have been obtained. Such Selling Shareholder has, and at the
time of delivery thereof hereunder such Selling Shareholder will have,
good and valid title to the Shares proposed to be sold by such Selling
Shareholder hereunder, free and clear of all voting trust
arrangements, liens, encumbrances, security interests, equities,
claims and community or marital property rights, other than any
created by the Durable Power of Attorney and Custody Agreement or this
Agreement for the benefit of the Underwriters. Such Selling
Shareholder has full right, power and authority to enter into this
Agreement and the Durable Power of Attorney and Custody Agreement and
to sell, assign, transfer and deliver such Shares hereunder, free and
clear of all voting trust arrangements, liens, encumbrances, security
interests, equities, claims and community or marital property rights,
other than any created by the Durable Power of Attorney and Custody
Agreement or this Agreement for the benefit of the Underwriters. Upon
delivery of and payment for such Shares hereunder, the Underwriters
will acquire good and valid title thereto, free and clear of all
voting trust arrangements, liens,
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encumbrances, security interests, equities, claims and community or
marital property rights.
(c) Such Selling Shareholder has not distributed and will
not distribute any Preliminary Prospectus, the Prospectus or any other
material in connection with the offering and sale of the Shares. Such
Selling Shareholder has not taken and will not take, for a period of
at least 180 days from the date hereof, directly or indirectly, any
action designed to or which could cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Common Shares.
(d) The execution, delivery and performance by such
Selling Shareholder of this Agreement and the Durable Power of
Attorney and Custody Agreement will not, if applicable, result in the
violation of any provisions of the Articles of Incorporation,
Regulations or other governing documents of such Selling Shareholder,
or constitute a breach, or be in contravention, of any provision of
any agreement, franchise, license, indenture, mortgage, deed of trust
or other instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder or such Selling Shareholder's property
may be bound or affected, or any statute, rule or regulation
applicable to such Selling Shareholder, or violate any order or decree
of any court, regulatory body, administrative agency or other
governmental body having jurisdiction over such Selling Shareholder or
any of such Selling Shareholder's property. No consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of, and performance under, this Agreement by
such Selling Shareholder or the consummation by such Selling
Shareholder of the transactions contemplated by this Agreement, except
for compliance with the Act, the Exchange Act, the Blue Sky Laws
applicable to the public offering of the Shares by the Underwriters
and the clearance of such offering with the NASD. Such Selling
Shareholder hereby represents and warrants that each Attorney-in-Fact
has been duly appointed as attorney-in-fact by such Selling
Shareholder for the purpose of entering into and carrying out this
Agreement, and the Durable Power of Attorney and Custody Agreement has
been duly executed and delivered by or on behalf of such Selling
Shareholder to the Representatives.
(e) This Agreement and the Durable Power of Attorney and
Custody Agreement are each valid and binding agreements of such
Selling Shareholder and, assuming due execution by the other parties
hereto, are enforceable in accordance with their respective terms,
except that rights to indemnity or contribution may be limited by
applicable law and except as enforceability of this Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by equitable
principles limiting the right to specific performance or other
equitable relief.
(f) Such Selling Shareholder has deposited in custody,
under the Durable Power of Attorney and Custody Agreement,
certificates in negotiable form for the Shares to be sold hereunder by
such Selling Shareholder as set forth opposite such
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Selling Shareholder's name on Schedule I annexed hereto (including the
maximum number of Optional Shares set forth on Schedule I) for the
purpose of further delivery pursuant to this Agreement. Such Selling
Shareholder agrees that the Shares of such Selling Shareholder on
deposit with the Custodian are subject to the interests of the
Company, the Underwriters and the other Selling Shareholders, that the
arrangements made for such custody, and the appointment of the
Attorneys-in-Fact pursuant to the Durable Power of Attorney and
Custody Agreement, are to that extent irrevocable, and that the
obligations of such Selling Shareholder hereunder and under the
Durable Power of Attorney and Custody Agreement shall not be
terminated, except as provided in this Agreement and the Durable Power
of Attorney and Custody Agreement, by any act of such Selling
Shareholder, by operation of law, whether in the case of an individual
Selling Shareholder, by the death or incapacity of such Selling
Shareholder or, in the case of a trust or estate, by the death of the
trustee or trustees or the executor or executors or the termination of
such trust or estate, or, in the case of a partnership or corporation,
by the dissolution, winding up or other event affecting the legal life
of such entity, or by the occurrence of any other event. If any
individual Selling Shareholder, trustee or executor should die or
become incapacitated, or any such trust, estate, partnership or
corporation should be terminated, or if any other event should occur
before the delivery of the Shares hereunder, the certificates for
Shares then on deposit with the Custodian shall, to the extent such
Shares are purchased by the Underwriters, be delivered by the
Custodian in accordance with the terms and conditions of this
Agreement and the Durable Power of Attorney and Custody Agreement as
if such death, incapacity, termination or other event had not
occurred, regardless of whether or not the Custodian shall have
received notice thereof. Such Selling Shareholder represents that
each Attorney-in-Fact has been authorized by such Selling Shareholder
to execute and deliver this Agreement and the Custodian has been
authorized to receive and acknowledge receipt of the proceeds of sale
of the Shares sold by such Selling Shareholder against delivery
thereof and otherwise to act on behalf of such Selling Shareholder.
(g) Insofar as it relates to such Selling Shareholder,
each Preliminary Prospectus, as of its date, has conformed in all
material respects with the requirements of the Act and, as of its
date, has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein not misleading; and on the effective date of the Registration
Statement and at all times subsequent thereto up to each Closing Date,
(i) the Registration Statement and the Prospectus, as they relate to
such Selling Shareholder, did or will conform to the requirements of
the Act, and (ii) neither the Registration Statement nor the
Prospectus as it relates to such Selling Shareholder did or will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
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(h) The information contained in such Selling Shareholder's
Director and Officer Questionnaire completed in connection with the
offering of the Common Shares and delivered to the Representatives was,
as of the date of such questionnaire, and is, as of the date of this
Agreement, true and correct.
A certificate signed by or on behalf of any Selling Shareholder
as such and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by such Selling Shareholder to the
Underwriters as to the matters covered thereby. A certificate delivered by or on
behalf of any Selling Shareholder to counsel for the Selling Shareholders for
purposes of enabling such counsel to render the opinion referred in Section
10(e) will also be furnished to the Representatives and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by such Selling Shareholder as to the matters covered
thereby.
SECTION 4. REPRESENTATION OF UNDERWRITERS. The Representatives
will act as the representatives for the several Underwriters in connection with
the public offering of the Shares, and any action under or in respect of this
Agreement taken by the Representatives will be binding upon all of the
Underwriters.
SECTION 5. INFORMATION FURNISHED BY THE UNDERWRITERS. The
information set forth in the last paragraph on the outside front cover page of
the Prospectus concerning the terms of the offering by the Underwriters, the
paragraph on the inside front cover page of the Prospectus relating to
stabilization practices and passive market making, and the concession and
reallowance amounts appearing under the caption "Underwriting" in the Prospectus
constitute all of the information furnished to the Company by and on behalf of
the Underwriters for use in connection with the preparation of the Registration
Statement and the Prospectus, as such information is referred to in this
Agreement.
SECTION 6. PURCHASE, SALE AND DELIVERY OF SHARES.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions
herein set forth, the Company agrees to sell to the Underwriters
identified in Schedule II annexed hereto 1,000,000 Firm Shares, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company the number of Firm Shares as hereinafter set forth at
the price per share of $__________. The obligation of each Underwriter
to the Company shall be to purchase from the Company that number of
full Firm Shares which (as nearly as practicable in full shares as
determined by the Representatives) bears the same proportion to the
number of Firm Shares to be sold by the Company as the number of shares
set forth opposite the name of such Underwriter in Schedule II annexed
hereto bears to the total number of Firm Shares to be purchased by all
of the Underwriters under this Agreement.
(b) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions
herein set forth, each Selling Shareholder agrees, severally and not
jointly, to sell to the Underwriters that
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number of full Firm Shares set forth opposite the name of such Selling
Shareholder in Schedule I annexed hereto (a total of 800,000 shares
from all of the Selling Shareholders), and each of the Underwriters
agrees, severally and not jointly, to purchase from each Selling
Shareholder the number of Firm Shares as hereinafter set forth at the
same purchase price per share as stated in the preceding paragraph. The
obligation of each Underwriter to each Selling Shareholder shall be to
purchase from that Selling Shareholder that number of full Firm Shares
which (as nearly as practicable in full shares as determined by the
Representatives) bears the same proportion to the number of Firm Shares
to be sold by such Selling Shareholder as the number of shares set
forth opposite the name of such Underwriter in Schedule II annexed
hereto bears to the total number of Firm Shares to be purchased by all
of the Underwriters under this Agreement.
(c) Subject to the terms and conditions hereof, the
Underwriters agree that (i) they will offer the Shares to the public as
set forth in the Prospectus as soon after the Registration Statement
becomes effective as may be practicable, (ii) they will offer and sell
the Shares to the public only in those jurisdictions, and in such
amounts, where due qualification and/or registration has been effected
or an exemption from such qualification and/or registration is
available under the applicable securities or blue sky laws of such
jurisdiction, and (iii) the Shares will be offered and sold only in
those jurisdictions where broker/dealer licensing has been obtained or
where there is an exemption from such licensing; it being understood,
however, that such agreement only covers the initial sale of the Shares
by the Underwriters and not any subsequent sale of such Shares in any
trading market.
(d) On the First Closing Date (as hereinafter defined), the
Company and the Custodian on behalf of the Selling Shareholders will
deliver to the Representatives, at the offices of Xxxxxx X. Xxxxx & Co.
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or
through the facilities of The Depository Trust Company, for the
accounts of the several Underwriters, certificates representing the
Firm Shares to be sold by them against payment in Milwaukee, Wisconsin
of the purchase price therefor by certified or official bank check or
checks in New York Clearing House (next day) funds payable to the order
of the Company with respect to the Firm Shares being sold by the
Company and to the order of the Custodian with respect to the Firm
Shares being sold by the Selling Shareholders. As referred to in this
Agreement, the "First Closing Date" shall be on the third full business
day after the date of the Prospectus, at 9:00 a.m., Milwaukee,
Wisconsin time, or at such other date or time not later than ten full
business days after the date of the Prospectus as the Representatives
and the Company and the Attorneys-in-Fact (or either of them) may
agree. The certificates for the Firm Shares to be so delivered will be
in denominations and registered in such names as the Representatives
request by notice to the Company and the Attorneys-in-Fact, or either
of them, prior to the First Closing Date, and such certificates will be
made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full business day preceding the First
Closing Date at a location to be designated by the Representatives.
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(e) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms
and conditions herein set forth, the Company and the Selling
Shareholders hereby agree to sell to the Underwriters, and the
Underwriters, severally and not jointly, shall have the right at any
time within thirty days after the date of the Prospectus to purchase up
to 150,000 Optional Shares from the Company and up to 120,000 Optional
Shares from the Selling Shareholders at the purchase price per share to
be paid for the Firm Shares, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution
of the Firm Shares. The option granted hereunder may be exercised upon
notice by the Representatives to the Company and the Attorneys-in-Fact,
or either of them, within thirty days after the date of the Prospectus
setting forth the aggregate number of Optional Shares to be purchased
by the Underwriters and sold by the Company and the Selling
Shareholders, the names and denominations in which the certificates for
such shares are to be registered and the date and place at which such
certificates will be delivered. Such date of delivery (the "Second
Closing Date") shall be determined by the Representatives, provided
that the Second Closing Date, which may be the same as the First
Closing Date, shall not be earlier than the First Closing Date and, if
after the First Closing Date, shall not be earlier than three nor later
than ten full business days after delivery of such notice to exercise.
The number of Optional Shares to be sold by the Company pursuant to
such notice shall equal that number of full Optional Shares which (as
nearly as practicable in full shares as determined by the
Representatives) bears the same proportion to the number of Optional
Shares to be purchased by the Underwriters as the number of Firm Shares
to be sold by the Company under this Agreement bears to the total
number of Firm Shares. The number of Optional Shares to be sold by each
Selling Shareholder pursuant to such notice shall equal that number of
full Optional Shares which (as nearly as practicable in full shares as
determined by the Representatives) bears the same proportion to the
number of Optional Shares to be purchased by the Underwriters as the
number of Firm Shares to be sold by such Selling Shareholder bears to
the total number of Firm Shares. Certificates for the Optional Shares
will be made available for checking and packaging at 9:00 a.m.,
Milwaukee, Wisconsin time, on the first full business day preceding the
Second Closing Date at a location to be designated by the
Representatives. The manner of payment for and delivery of (including
the denominations of and the names in which certificates are to be
registered) the Optional Shares shall be the same as for the Firm
Shares.
(f) The Representatives have advised the Company and the
Attorneys-in-Fact that each Underwriter has authorized the
Representatives to accept delivery of the Shares and to make payment
therefor. It is understood that the Representatives, individually and
not as representatives of the Underwriters, may (but shall not be
obligated to) make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any obligation under
this Agreement. As referred
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to in this Agreement, "Closing Date" shall mean either the First
Closing Date or the Second Closing Date.
[Note: For compliance with "T+3" closing, confirm that date of
the Prospectus is the first trading date (i.e., not pricing date if Rule 430A
pricing on the night before trading is employed).]
SECTION 7. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the several Underwriters that:
(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, the Company will
use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, upon notification from the
Commission that the Registration Statement has become effective, will
so advise the Representatives and counsel to the Underwriters promptly.
If the effective time of the Registration Statement is prior to the
execution and delivery of this Agreement and any information shall have
been omitted therefrom in reliance upon Rule 430A, the Company, at the
earliest possible time, will furnish the Representatives with a copy of
the Prospectus to be filed by the Company with the Commission to comply
with Rule 424(b) and Rule 430A under the Act and, if the
Representatives do not object to the contents thereof, will comply with
such Rules. Upon compliance with such Rules, the Company will so advise
the Representatives promptly. The Company will advise the
Representatives and counsel to the Underwriters and the
Attorneys-in-Fact promptly of the issuance by the Commission or any
state securities commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, or of any notification of the
suspension of qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceedings for that purpose,
and will also advise the Representatives and counsel to the
Underwriters and the Attorneys-in-Fact promptly of any request of the
Commission for amendment or supplement of the Registration Statement,
of any Preliminary Prospectus or of the Prospectus, or for additional
information, and the Company will not file any amendment or supplement
to the Registration Statement (either before or after it becomes
effective), to any Preliminary Prospectus or to the Prospectus
(including a prospectus filed pursuant to Rule 424(b)), or file any
document under the Exchange Act before the termination of the public
offering of the Shares by the Underwriters if such document would be
deemed to be incorporated by reference in the Registration Statement,
if the Representatives have not been furnished with a copy prior to
such filing (with a reasonable opportunity to review such amendment or
supplement) or if the Representatives object to such filing.
(b) If, at any time when a prospectus relating to the Shares is
required by law to be delivered in connection with sales by an
Underwriter or dealer, any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact, or
would omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at
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any time to supplement the Prospectus to comply with the Act or to file
under the Exchange Act any document which would be deemed to be
incorporated by reference in the Registration Statement to comply with
the Act or the Exchange Act, the Company promptly will advise the
Representatives and counsel to the Underwriters thereof and will
promptly prepare and file with the Commission, at its expense, an
amendment to the Registration Statement or file such document which
will correct such statement or omission or an amendment which will
effect such compliance; and, if any Underwriter is required to deliver
a prospectus after the effective date of the Registration Statement,
the Company, upon request of the Representatives, will prepare promptly
such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act. The
Company consents to the use, in accordance with the provisions of the
Act and with the Blue Sky Laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, of each
Preliminary Prospectus.
(c) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, incur any liability or obligation, direct
or contingent, or enter into any material transaction, other than in
the ordinary course of business, or enter into any transaction with an
"affiliate," as defined in Rule 405 under the Act, which is required to
be described in the Prospectus pursuant to Item 404 of Regulation S-K
under the Act, except as described in the Prospectus.
(d) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, acquire any of the Common Shares nor will
the Company declare or pay any dividend or make any other distribution
upon its Common Shares payable to shareholders of record on a date
prior to such earlier date, except as described in the Prospectus.
(e) The Company will make generally available to its security
holders and the Representatives an earnings statement as soon as
practicable, but in no event later than sixty days after the end of its
fiscal quarter in which the first anniversary of the effective date of
the Registration Statement occurs, covering a period of twelve
consecutive calendar months beginning after the effective date of the
Registration Statement, which will satisfy the provisions of the last
paragraph of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(f) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the
Company will furnish to the Representatives, at the expense of the
Company, copies of the Registration Statement, the Prospectus, any
Preliminary Prospectus and all amendments and supplements to any such
documents, including any document filed under the Exchange Act and
deemed to be incorporated by reference in the Registration Statement,
in each case as soon as available and in such quantities as the
Representatives may reasonably request.
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(g) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder for the purposes set forth in the
Prospectus, and will timely file Form SR, and any amendments thereto,
as required by Rule 463 under the Act.
(h) The Company will cooperate with the Representatives and
counsel to the Underwriters in qualifying or registering the Shares for
sale under the Blue Sky Laws of such jurisdictions as the
Representatives designates, and will continue such qualifications or
registrations in effect so long as reasonably requested by the
Representatives to effect the distribution of the Shares. The Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it
is not presently qualified. In each jurisdiction where any of the
Shares shall have been qualified as provided above, the Company will
file such reports and statements as may be required to continue such
qualification for a period of not less than one year from the date of
the Prospectus. The Company shall promptly prepare and file with the
Commission, from time to time, such reports as may be required to be
filed by the Act and the Exchange Act, and the Company shall comply in
all respects with the undertakings given by the Company in connection
with the qualification or registration of the Shares for offering and
sale under the Blue Sky Laws.
(i) During the period of three years from the date of the
Prospectus, the Company will furnish to each of the Representatives and
to each of the other Underwriters who may so request, as soon as
available, each report, statement or other document of the Company or
its Board of Directors mailed to its shareholders or filed with the
Commission, and such other information concerning the Company as the
Representatives may reasonably request.
(j) The Company shall deliver the requisite notice of issuance
to Nasdaq and shall use its reasonable best efforts to maintain the
authorization for trading of the Common Shares as a Nasdaq National
Market security, for a period of at least thirty-six months after the
date of the Prospectus.
(k) Except for the issuance and sale by the Company of Common
Shares upon exercise of presently existing outstanding stock options,
the sale of the Shares to be sold by the Company pursuant to this
Agreement, and the grant of employee stock options pursuant to the
Company's [list Stock Option Plans,] a copy of each of which is filed
as an exhibit to the Registration Statement, and provided that none of
such options shall be exercisable during the 180-day period herein
described, the Company shall not, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Xxxxx,
directly or indirectly, offer, sell or otherwise dispose of, contract
to sell or otherwise dispose of, or cause or in any way permit to be
sold or otherwise disposed of, any: (i) Common Shares; (ii) rights to
purchase Common Shares; or (iii) securities that are convertible or
exchangeable into Common Shares.
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(l) The Company will maintain a transfer agent and, if required
by law or the rules of the Nasdaq National Market or any national
securities exchange on which the Common Shares are listed, a registrar
(which, if permitted by applicable laws and rules, may be the same
entity as the transfer agent) for its Common Shares.
(m) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any rumor, publication or event
relating to of affecting the Company shall occur as a result of which,
in the REASONABLE opinion of Xxxxx, the market price of the Common
Shares has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to
the Prospectus), the Company will, after written notice from Xxxxx
advising the Company of any of the matters set forth above, promptly
consult with Xxxxx concerning the advisability and substance of, and,
if the Company and Xxxxx determine that it is appropriate, disseminate,
a press release or other public statement responding to or commenting
on, such rumor, publication or event.
(n) If the sale to the Underwriters of the Shares is not
consummated for any reason other than termination of this Agreement
pursuant to section 13 hereof, without limiting any other rights the
Underwriters may have, the Company agrees to reimburse the Underwriters
upon demand for all out-of-pocket expenses (including reasonable fees
and expenses of counsel for the Underwriters), that shall have been
incurred by the Underwriters in connection with the proposed purchase
and sale of the Shares, and the provisions of sections 9 and 12 hereof
shall at all times be effective and apply.
(o) The Company will comply or cause to be complied with the
conditions to the obligations of the Underwriters in section 10 hereof.
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SECTION 8. COVENANTS OF THE SELLING SHAREHOLDERS. Each Selling
Shareholder, severally and not jointly, covenants and agrees with the several
Underwriters and the Company as follows:
(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, such Selling
Shareholder will cooperate to the extent necessary to cause the
Registration Statement to become effective at the earliest possible
time; and such Selling Shareholder will do and perform all things to be
done and performed by such Selling Shareholder prior to each Closing
Date, pursuant to this Agreement or the Durable Power of Attorney and
Custody Agreement.
(b) Such Selling Shareholder agrees to deliver to the Custodian
on or prior to the First Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable
substitute form or statement specified by Treasury Department
regulations in lieu thereof).
(c) Such Selling Shareholder will pay all federal and other
taxes, if any, on the transfer or sale of the Shares being sold by such
Selling Shareholder to the Underwriters.
(d) For a period of 180 days after the date of the Prospectus,
such Selling Shareholder will not, without the prior written consent of
Xxxxx, directly or indirectly, offer, sell, transfer, or pledge,
contract to sell, transfer or pledge or cause or in any way permit to
be sold, transferred, pledged or otherwise disposed of any: (i) Common
Shares; (ii) rights to purchase Common Shares (including, without
limitation, Common Shares that may be deemed to be beneficially owned
by such Selling Shareholder in accordance with the rules and
regulations of the Commission and Common Shares that may be issued upon
exercise of a stock option, warrant or other convertible security); or
(iii) securities that are convertible or exchangeable into Common
Shares.
(e) Such Selling Shareholder will furnish any documents,
instruments or other information which the Representatives may
reasonably request in connection with the sale and transfer of the
Shares to the Underwriters.
SECTION 9. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company will pay the costs,
fees and expenses incurred in connection with the public offering of the Shares.
Such costs, fees and expenses to be paid by the Company include, without
limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of
counsel for the Underwriters, but including such fees and disbursements
described in subsection (b) of this section 9) incurred in connection
with the performance of the Company's obligations hereunder, including
without limiting the generality of the foregoing: the registration fees
related to the filing of the Registration Statement with the
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Commission; the fees and expenses related to the quotation of the
Shares on Nasdaq or other national securities exchange; the fees and
expenses of the Company's counsel, accountants, transfer agent and
registrar; the costs and expenses incurred in connection with the
preparation, printing, shipping and delivery of the Registration
Statement, each Preliminary Prospectus and the Prospectus (including
all exhibits and financial statements) and all agreements and
supplements provided for herein, this Agreement and the Preliminary and
Supplemental Blue Sky Memoranda and the Durable Power of Attorney and
Custody Agreement, including, without limitation, shipping expenses via
overnight delivery and/or courier service to comply with applicable
prospectus delivery requirements; and the costs and expenses associated
with the production of materials related to, and travel expenses
incurred by the management of the Company in connection with, the
various meetings to be held between the Company's management and
prospective investors.
(b) All registration fees and expenses, including reasonable
legal fees and disbursements of counsel for the Underwriters incurred
in connection with qualifying or registering all or any part of the
Shares for offer and sale under the Blue Sky Laws and the clearing of
the public offering and the underwriting arrangements evidenced hereby
with the NASD, which legal fees shall not exceed $10,000.
(c) All fees and expenses related to printing of the
certificates for the Shares, and all transfer taxes, if any, with
respect to the sale and delivery of the Shares.
SECTION 10. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters under this Agreement shall be
subject to the accuracy of the representations and warranties on the part of the
Company, the Principal Shareholders and the Selling Shareholders herein set
forth as of the date hereof and as of each Closing Date, to the accuracy of the
statements of the Company's officers, the Selling Shareholders and the
Attorneys-in-Fact on behalf of the Selling Shareholders made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Shareholders of their respective obligations hereunder, and to the following
additional conditions, unless waived in writing by the Representatives:
(a) The Registration Statement shall have been declared
effective by the Commission not later than _____ p.m., Washington, D.
C. time, prior to the date on the date of this Agreement, or such later
time as shall have been consented to by the Representatives, which
consent shall be deemed to have been given if the Registration
Statement shall have been declared effective on or before the date and
time requested in the acceleration request submitted on behalf of the
Representatives pursuant to Rule 461 under the Act; all filings
required by Rules 424(b) and 430A under the Act shall have been timely
made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued by the Commission or any state
securities commission nor, to the knowledge of the Company or the
Principal Shareholders, shall any proceedings for that purpose have
been initiated or threatened; and any request of the Commission or any
state
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securities commission for inclusion of additional information in the
Registration Statement, or otherwise, shall have been complied with to the
satisfaction of the Representatives. [Note: Date and time of effectiveness of
Registration Statement may vary depending on use or nonuse of Rule 430A.]
(b) Since the dates as of which information is given in the
Registration Statement:
(i) there shall not have occurred any change or development
involving, or which could be expected to involve, a Material Adverse
Effect, whether or not arising from transactions in the ordinary course
of business; and
(ii) the Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood, windstorm,
accident or other calamity (whether or not insured) or from any court or
governmental action, order or decree,
the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the opinion of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(c) The Representatives shall not have advised the Company that the
Registration Statement or the Prospectus contains an untrue statement of fact
that, in the opinion of the Representatives or counsel for the Underwriters, is
material, or omits to state a fact that, in the opinion of the Representatives
or such counsel, is material and is required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(d) The Representatives shall have received an opinion of Xxxxxxx,
Xxxxxxxx & Xxxxxxx, counsel for the Company, addressed to the Representatives,
as the representatives of the Underwriters, and dated the First Closing Date or
the Second Closing Date, as the case may be, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority
to own, lease and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and the
Registration Statement; the Company is duly registered and qualified to
do business as a foreign corporation under the laws of, and is in good
standing as such in, each jurisdiction in which such registration or
qualification is required, except where the failure to so register or
qualify would not have a Material Adverse Effect;
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(ii) The authorized capital stock of the Company
consists of 30,000,000 Common Shares, without par value, and
1,000,000 Preferred Shares, without par value, and all such
stock conforms as to legal matters to the descriptions thereof
in the Prospectus and the Registration Statement;
(iii) The issued and outstanding shares of capital
stock of the Company immediately prior to the issuance and sale
of the Shares to be sold by the Company hereunder have been
duly authorized and validly issued, are fully paid and
nonassessable, and there are no preemptive, preferential or,
except as described in the Prospectus, other rights to
subscribe for or purchase any shares of capital stock of the
Company, and to such counsel's knowledge, no shares of capital
stock of the Company have been issued in violation of such
rights;
(iv) Except for the Subsidiaries, the Company has no
subsidiaries, and the Company does not own any equity interest
in or control, directly or indirectly, any other corporation,
limited liability company, partnership, joint venture,
association, trust or other business organization except as
described in the Prospectus and the Registration Statement;
each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with full corporate power
and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in
the Prospectus and the Registration Statement; each Subsidiary
is duly registered or qualified to do business as a foreign
corporation under the laws of, and is in good standing as such
in, each jurisdiction in which such registration or
qualification is required, except where the failure to so
register or qualify would not have a Material Adverse Effect;
the issued and outstanding shares of the capital stock of each
Subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and there are no preemptive,
preferential or, to such counsel's knowledge, other rights to
subscribe for or purchase any shares of capital stock of any
Subsidiary, and to such counsel's knowledge, no shares of
capital stock of any Subsidiary have been issued in violation
of such rights; the Company owns directly and, to such
counsel's knowledge, beneficially, all of the issued and
outstanding capital stock of each Subsidiary, free and clear of
any and all liens, claims, encumbrances and security interests;
(v) The certificates for the Shares to be delivered
hereunder are in due and proper form and conform to the
requirements of applicable law; and when duly countersigned by
the Company's transfer agent, and delivered to the
Representatives or upon the order of the Representatives
against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Shares to
be sold by the Company represented thereby will be duly
authorized and validly issued, fully paid and nonassessable,
and free of any preemptive, preferential or other rights to
subscribe for or purchase Common Shares;
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(vi) The Registration Statement has become effective
under the Act, and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
initiated or are threatened under the Act or any Blue Sky Laws;
the Registration Statement and the Prospectus and any amendment
or supplement thereto, including any document incorporated by
reference in the Registration Statement, (except for the
financial statements and other statistical or financial data
included therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act; the conditions for use of Form S-3,
set forth in the General Instructions thereto, have been
satisfied; no facts have come to the attention of such counsel
which lead it to believe that either the Registration Statement
or the Prospectus or any amendment or supplement thereto,
including any document incorporated by reference in the
Registration Statement, contains any untrue statement of a
material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of
the First Closing Date or the Second Closing Date, as the case
may be, contained any untrue statement of a material fact or
omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were
made (except for the financial statements and other financial
data included therein as to which such counsel need express no
opinion); to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened, including,
without limitation, any such proceedings that are related to
environmental or employment discrimination matters, required to
be described in the Registration Statement or the Prospectus
which are not so described or which question the validity of
this Agreement or any action taken or to be taken pursuant
thereto, nor is there any transaction, relationship, agreement,
contract or other document of a character required to be
described in the Registration Statement or the Prospectus, or
required to be filed under the Exchange Act if upon such filing
they would be incorporated, in whole or in part, by reference
therein, or to be filed as an exhibit to or incorporated by
reference in the Registration Statement by the Act, which is
not described, filed or incorporated by reference as required;
(vii) The Company has full corporate power and
authority to enter into and perform this Agreement; the
performance of the Company's obligations hereunder and the
consummation of the transactions described herein have been
duly authorized by the Company by all necessary corporate
action and this Agreement has been duly executed and delivered
by and on behalf of the Company, and is a legal, valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except that rights to
indemnity or contribution may be limited by applicable law and
except as enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws
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affecting creditors' rights generally, and by equitable
principles limiting the right to specific performance or other
equitable relief; no consent, approval, authorization or other
order or decree of any court, regulatory or governmental body,
arbitrator, administrative agency or other instrumentality of
the United States or other country or jurisdiction having
jurisdiction over the Company is required for the execution and
delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement (except for
compliance with the Act, the Exchange Act, applicable Blue Sky
Laws (as to which such counsel need not express any opinion)
and the clearance of the underwriting arrangements by the
NASD);
(viii) The execution, delivery and performance of this
Agreement by the Company will not: (A) violate any provisions
of the Articles of Incorporation or Code of Regulations of the
Company or any Subsidiary; (B) violate any provisions of, or
result in the breach, modification or termination of, or
constitute a default under, any agreement, lease, franchise,
license, indenture, permit, mortgage, deed of trust, other
evidence of indebtedness or other instrument known to such
counsel to which the Company or any Subsidiary is a party or by
which the Company or such Subsidiary, or any of their
respective owned or leased property is bound, and which is
filed or incorporated by reference as an exhibit to the
Registration Statement; or (C) violate any statute, ordinance,
order, rule, decree or regulation of any court, regulatory or
governmental body, arbitrator, administrative agency or other
instrumentality of the United States or other country or
jurisdiction having jurisdiction over the Company or any
Subsidiary (assuming compliance with all applicable federal and
state securities laws);
(ix) To such counsel's knowledge, except as described
in the Prospectus, there are no holders of Common Shares or
other securities of the Company, or securities that are
convertible or exchangeable into Common Shares or other
securities of the Company, that have rights to the registration
of such securities under the Act or any Blue Sky Laws;
(x) The Common Shares have been designated for
inclusion as a National Market security on the Nasdaq National
Market and are registered under the Exchange Act;
(xi) Neither the Company nor any Subsidiary is, nor
with the giving of notice or passage of time or both would be,
in violation of its respective Articles of Incorporation or
Code of Regulations or, to such counsel's knowledge, in default
in any material respect in the performance of any agreement,
lease, franchise, license, permit, mortgage, deed of trust,
evidence of indebtedness or other instrument, or any other
document that is filed as an exhibit to or incorporated by
reference in the Registration Statement, to which the Company
or any Subsidiary is subject or bound;
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(xii) Neither the Company nor any Subsidiary is an
"investment company", an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company", as
such terms are defined in the Investment Company Act of 1940,
as amended, and, upon its receipt of any proceeds from the sale
of the Shares, the Company will not become or be deemed to be
an "investment company" thereunder;
(xiii) The description or incorporation by reference
in the Registration Statement and the Prospectus of statutes,
law, regulations, legal and governmental proceedings, and
contracts and other legal documents described or incorporated
by reference therein fairly and correctly present, in all
material respects, the information required to be included
therein by the Act; and
(xiv) All offers and sales by the Company of its
capital stock before the date hereof were at all relevant times
duly registered under or exempt from the registration
requirements of the Act, and were duly registered under or the
subject of an available exemption from the registration
requirements of any applicable Blue Sky Laws.
In rendering such opinion, counsel for the Company may rely, to the
extent counsel deems such reliance proper, as to matters of fact upon
certificates of officers of the Company and of governmental officials, and
copies of all such certificates shall be furnished to the Representatives and
for the Underwriters on or before each Closing Date.
(e) The Representatives shall have received an opinion from
______________, counsel for the Selling Shareholders, dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that:
(i) Each of this Agreement and the Durable Power of
Attorney and Custody Agreement has been duly authorized,
executed and delivered by or on behalf of each Selling
Shareholder and such agreement constitutes the valid and
binding agreement of such Selling Shareholder, enforceable in
accordance with its respective terms, except that rights to
indemnity or contribution thereunder may be limited by
applicable law and except as enforceability of such agreement
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting the rights of
creditors and by equitable principles limiting the right to
specific performance or other equitable relief;
(ii) The execution and delivery of this Agreement and
the Durable Power of Attorney and Custody Agreement and the
consummation of the transactions herein and therein
contemplated will not, to such counsel's knowledge, constitute
a breach, or be in contravention, of any provision of any
agreement, franchise, license, indenture, mortgage, deed of
trust or other instrument to which such Selling Shareholder is
a party or by which such Selling Shareholder or such Selling
Shareholder's property may be
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bound or affected, or any statute, rule or regulation
applicable to such Selling Shareholder, or violate any order or
decree of any court, regulatory or governmental body,
administrative body or instrumentality of the United States or
other jurisdiction having jurisdiction over such Selling
Shareholder or any of such Selling Shareholder's property,
which violation would reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
business, properties, net worth or results of operations of
such Selling Shareholder;
(iii) Such Selling Shareholder has full legal right,
power and authority, and has secured any consent, approval,
authorization and order required to enter into and perform this
Agreement and the Durable Power of Attorney and Custody
Agreement and to sell, assign, transfer and deliver title to
the Shares to be sold by such Selling Shareholder as provided
herein; and upon delivery to the Underwriters or upon the order
of the Representatives against payment of the agreed
consideration therefor in accordance with the provisions of
this Agreement, to such counsel's knowledge, the Underwriters
will acquire good and marketable title to the Shares to be sold
hereunder by such Selling Shareholder, free and clear of all
voting trust arrangements, liens, encumbrances, security
interests, equities, claims and community or marital property
rights; and
(iv) To such counsel's knowledge, the information
concerning the Selling Shareholders contained in the Prospectus
under the caption "Principal and Selling Shareholders" complies
in all material respects with the Act.
In rendering such opinion, counsel for the Selling Shareholders may
rely, to the extent counsel deems such reliance proper, as to matters of fact
upon certificates of the Selling Shareholders, and copies of all such
certificates shall be furnished to the Representatives and counsel for the
Underwriters on or before each Closing Date.
(f) The Representatives shall have received an opinion of Xxxx,
Stettinius & Hollister, counsel for the Underwriters, dated the First
Closing Date or the Second Closing Date, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement and other related matters as the Representatives
may require, and the Company shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as
they request for the purpose of enabling them to pass upon such
matters.
(g) The Representatives shall have received on each Closing
Date, a certificate of Xxxxxx X. Ready, Chairman of the Board and
President, and Xxxxxx X. Xxxxxxx, Chief Financial Officer and
Treasurer, of the Company, to the effect that:
(i) The representations and warranties of the Company
and the Principal Shareholders set forth in section 2 hereof
are true and correct as of the date of this Agreement and as of
the date of such certificate, and the
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Company has complied with all the agreements and satisfied all
the conditions to be performed or satisfied by it at or prior
to the date of such certificate;
(ii) The Commission has not issued an order
preventing or suspending the use of the Prospectus or any
Preliminary Prospectus or any amendment or supplement thereto;
no stop order suspending the effectiveness of the Registration
Statement has been issued; and to the knowledge of the
respective signatories, no proceedings for that purpose have
been initiated or are pending or contemplated under the Act or
under the Blue Sky Laws of any jurisdiction;
(iii) The Company and each such individual signing
such certificate has carefully examined the Registration
Statement and the Prospectus, and any amendment or supplement
thereto, including any documents filed under the Exchange Act
and deemed to be incorporated by reference in the Registration
Statement, and such documents contain all statements required
to be stated therein, and do not include 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, in light of the circumstances under which they were
made, not misleading, and since the date on which the
Registration Statement was initially filed, no event has
occurred that was required to be set forth in an amended or
supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth, and there has been no
document required to be filed under the Exchange Act that upon
such filing would be deemed to be incorporated by reference in
the Registration Statement that has not been so filed; and
(iv) Since the date on which the Registration
Statement was initially filed with the Commission, there shall
not have occurred any change or development involving, or which
could be expected to involve, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course
of business, except as disclosed in the Prospectus and the
Registration Statement as heretofore amended or (but only if
the Representatives expressly consent thereto in writing) as
disclosed in an amendment or supplement thereto filed with the
Commission and delivered to the Representatives after the
execution of this Agreement; since such date and except as so
disclosed or in the ordinary course of business, the Company
has not incurred any liability or obligation, direct or
indirect, or entered into any transaction which is material to
the Company; since such date and except as so disclosed, there
has not been any change in the outstanding capital stock of the
Company, or any change that is material to the Company in the
short-term debt or long-term debt of the Company; since such
date and except as so disclosed, the Company has not acquired
any of the Common Shares or other capital stock of the Company
nor has the Company declared or paid any dividend, or made any
other distribution, upon its outstanding Common Shares payable
to shareholders of record on a date prior to such Closing Date;
since such date and except as so
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disclosed, the Company has not incurred any material contingent
obligations, and no material litigation is pending or
threatened against the Company; and, since such date and except
as so disclosed, the Company has not sustained any material
loss or interference from any strike, fire, flood, windstorm,
accident or other calamity (whether or not insured) or from any
court or governmental action, order or decree.
The delivery of the certificate provided for in this subsection
(g) shall be and constitute a representation and warranty of the
Company as to the facts required in the immediately foregoing clauses
(i), (ii), (iii) and (iv) to be set forth in said certificate.
(h) The Representatives shall have received a certificate from
each Selling Shareholder (which may be signed by such Selling
Shareholder's Attorneys-in-Fact, or either of them), dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that: (i) the representations and warranties of such Selling
Shareholder in Section 3 of this Agreement are true and correct as of
the date of this Agreement and as of the date of such certificate, as
if again made on and as of such Closing Date, and such Selling
Shareholder has complied with all of the agreements and satisfied all
of the conditions to be performed or satisfied by such Selling
Shareholder at or prior to such Closing Date; and (ii) such Selling
Shareholder has no reason to believe that the Registration Statement or
any amendment thereto, including any documents filed under the Exchange
Act and deemed to be incorporated by reference in the Registration
Statement, at the time it was declared effective by the Commission
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, in light of the circumstances under which they
were made, not misleading, or that the Prospectus, as amended or
supplemented, including any documents filed under the Exchange Act and
deemed to be incorporated by reference in the Registration Statement,
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(i) At the time this Agreement is executed and also on each
Closing Date, there shall be delivered to the Representatives a letter
addressed to the Representatives, as representatives of the
Underwriters, from Price Waterhouse LLP, the Company's independent
accountants, the first letter to be dated the date of this Agreement,
the second letter to be dated the First Closing Date and the third
letter (if applicable) to be dated the Second Closing Date, which shall
be in form and substance satisfactory to the Representatives and shall
contain information as of a date within five days of the date of such
letter. There shall not have been any change or decrease set forth in
any of the letters referred to in this subsection (i) which makes it
impracticable or inadvisable in the judgment of the Representatives to
proceed with the public offering or purchase of the Shares as
contemplated hereby.
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(j) The Shares shall have been qualified or registered for sale
under the Blue Sky Laws of such jurisdictions as shall have been
specified by the Representatives, the underwriting terms and
arrangements for the offering shall have been cleared by the NASD, and
the Common Shares shall have been designated for inclusion as a Nasdaq
National Market security on the Nasdaq National Market and shall have
been registered under the Exchange Act.
(k) Such further certificates and documents as the
Representative[s] may reasonably request (including certificates of
officers of the Company).
All such opinions, certificates, letters and documents shall be
in compliance with the provisions hereof only if they are satisfactory to the
Representatives and to Xxxx, Xxxxxxxxxx & Xxxxxxxxx, counsel for the
Underwriters. The Company and the Selling Shareholders shall furnish the
Representatives with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Representatives may reasonably
request.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at either Closing Date is not so satisfied, this
Agreement at the election of the Representatives will terminate upon
notification to the Company and the Attorneys-in-Fact, or any one of them, for
the Selling Shareholders without liability on the part of any Underwriter,
including the Representatives, the Company or the Selling Shareholders except
for the provisions of section 7(n) hereof, the expenses to be paid by the
Company pursuant to section 9 hereof and except to the extent provided in
section 12 hereof.
SECTION 11. MAINTAIN EFFECTIVENESS OF REGISTRATION
STATEMENT. The Company will use its best efforts and the Selling
Shareholders will use their best efforts to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement, and, if such
stop order is issued, to obtain as soon as possible the lifting thereof.
SECTION 12. INDEMNIFICATION.
(a) The Company and each of the Principal Shareholders, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act, from and against any losses, claims, damages, expenses,
liabilities or actions in respect thereof ("Claims"), joint or several, to which
such Underwriter or each such controlling person may become subject under the
Act, the Exchange Act, Blue Sky Laws or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in settlement
of any litigation), insofar as such Claims arise out of or are based upon any
breach of any representation, warranty or covenant made by the Company and the
Principal Shareholders in this Agreement, or any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or in any application filed under any Blue Sky Law or other document
executed by the Company for that purpose or based upon written information
furnished by the Company and filed
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in any state or other jurisdiction to qualify any or all of the Shares under the
securities laws thereof (any such document, application or information being
hereinafter called a "Blue Sky Application") or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Company and each of the Principal Shareholders, jointly and severally, agree to
reimburse each Underwriter and each such controlling person for any reasonable
legal fees or other expenses incurred by such Underwriter or any such
controlling person in connection with investigating or defending any such Claim;
provided, however, that the Company and the Principal Shareholders will not be
liable in any such case to the extent that: any such Claim arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or supplement thereto or in any Blue Sky Application in reliance
upon and in conformity with the written information furnished to the Company
pursuant to section 5 of this Agreement. The indemnification obligations of the
Company and each of the Principal Shareholders as provided above are in addition
to and in no way limit any liabilities the Company and each of the Principal
Shareholders may otherwise have.
(b) Each of the Selling Shareholders, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter and each
controlling person from and against any Claims to which such Underwriter or each
such controlling person may become subject under the Act, the Exchange Act, Blue
Sky Laws or other federal or state statutory laws or regulations, at common law
or otherwise (including payments made in settlement of any litigation), insofar
as such Claims arise out of or are based upon any breach of any representations,
warranty or covenant made by such Selling Shareholder in this Agreement.
(c) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors and each of its officers
who signs the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act and each Principal
Shareholder against any Claim to which the Company, or any such director,
officer, controlling person or Principal Shareholder may become subject under
the Act, the Exchange Act, Blue Sky Laws or other federal or state statutory
laws or regulations, at common law or otherwise (including payments made in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter and Xxxxx), insofar as such Claim arises out of or
is based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any Blue Sky
Application, or arises out of or is based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any Blue Sky Application, in reliance solely upon and in conformity with
the written information furnished by the Representatives to the Company pursuant
to section 5 of this Agreement. Each Underwriter will severally indemnify and
hold harmless the Company, each principal Shareholder and each Selling
Shareholder and shall reimburse any reasonable legal fees
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or other expenses incurred by the Company, or any such director, officer,
controlling person, Principal Shareholder or Selling Shareholder in connection
with investigating or defending any such Claim, and from any and all Claims
solely resulting from failure of an Underwriter to deliver a Prospectus, if the
person asserting such Claim purchased Shares from such Underwriter and a copy of
the Prospectus (as then amended if the Company shall have furnished any
amendments thereto) was not sent or given by or on behalf of such Underwriter to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended) would have cured the defect giving rise to such
Claim. The indemnification obligations of each Underwriter as provided above are
in addition to any liabilities any such Underwriter may otherwise have.
Notwithstanding the provisions of this section, no Underwriter shall be required
to indemnify or reimburse the Company, or any officer, director, controlling
person or Principal Shareholder in an aggregate amount in excess of the total
price at which the Shares purchased by any such Underwriter hereunder were
offered to the public, less the amount of any damages such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(d) Each Selling Shareholder, severally and not jointly, agrees
to indemnify and hold harmless the Company, each of its directors and each of
its officers who signs the Registration Statement, and each person, if any,
controlling the Company within the meaning of the Act or the Exchange Act to the
same extent as the foregoing indemnity from the Company to each Underwriter set
forth in subsection (a) of this section. In case any Claim shall be brought or
asserted against the Company, its directors, such officers or any such
controlling person, in respect of which indemnity may be sought against any
Selling Shareholder, such Selling Shareholder shall have the rights and duties
given to the Company, and the Company, such directors or officers and any such
controlling person shall have the rights and duties given to the Underwriters by
subsection (a) of this section.
(e) Promptly after receipt by an indemnified party under this
section of notice of the commencement of any action in respect of a Claim, such
indemnified party will, if a Claim in respect thereof is to be made against an
indemnifying party under this section, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve an indemnifying party from any liability it may have to
any indemnified party under this section or otherwise. In case any such action
is brought against any indemnified party, and such indemnified party notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that he, she or it may wish,
jointly with all other indemnifying parties, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to the
indemnified party and/or other indemnified parties which are different from or
additional to those available to any indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties.
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(f) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this section for any legal fees or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, unless:
(i) the indemnified party shall have employed separate
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the last sentence of subsection (e) of
this section;
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the indemnified
party's notice to the indemnifying party of commencement of the action;
or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(g) If the indemnification provided for in this section is
unavailable to an indemnified party under subsection (a), (b), (c) or (d) hereof
in respect of any Claim referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, each Principal Shareholder
and the Underwriters from the offering of the Shares; or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above,
but also the relative fault of the Company, each Principal Shareholder
and the Underwriters in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable
considerations.
The relative benefits received by each of the Company, each
Principal Shareholder and the Underwriters shall be deemed to be in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the amount of the underwriting discounts and commissions
per share appearing on the cover page of the Prospectus bears to the public
offering price per share appearing thereon, and the Company (including its
officers and directors and controlling persons), and the Principal Shareholders,
are responsible for the remaining portion. The relative fault of the Company,
each Principal Shareholder and the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, such Principal Shareholder or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct
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or prevent such statement or omission. The amount paid or payable by a party as
a result of the Claims referred to above shall be deemed to include, subject to
the limitations set forth in subsections (e) and (f) of this section, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
(h) The Company, the Principal Shareholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this section were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method or allocation which does not take into account the equitable
considerations referred to in subsection (f) of this section. Notwithstanding
the other provisions of this section, unless guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act), no
Underwriter shall be required to contribute any amount that is greater than the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this section are several in proportion to their
respective underwriting commitments and not joint.
(i) The indemnifying party shall not be liable for any
settlement of any claim affected without its written consent.
SECTION 13. DEFAULT OF UNDERWRITERS. It shall be a
condition to the obligations of each Underwriter to purchase the Shares in the
manner as described herein, that, except as hereinafter provided in this
section, each of the Underwriters shall purchase and pay for all the Shares
agreed to be purchased by such Underwriter hereunder upon tender to the
Representatives of all such Shares in accordance with the terms hereof. If any
Underwriter or Underwriters default in their obligations to purchase Shares
hereunder on either the First Closing Date or the Second Closing Date and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of Shares which the Underwriters are obligated to purchase on such
Closing Date, the Representatives may make arrangements for the purchase of such
Shares by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date the nondefaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Shares which such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default and
the aggregate number of Shares with respect to which such default or defaults
occur is greater than ten percent (10%) of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, and arrangements
satisfactory to the Representatives for the purchase of such Shares by other
persons are not made within thirty-six hours after such default, this Agreement
will terminate without liability on the part of any nondefaulting Underwriter,
the Company and any Principal Shareholder except for the expenses to be paid by
the Company pursuant to section 9 hereof and except to the extent provided in
section 12 hereof.
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In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, for not more than seven business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 14. EFFECTIVE DATE. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto. Such execution and delivery shall include an executed copy of this
Agreement sent by telecopier, facsimile transmission or other means of
transmitting written documents.
SECTION 15. TERMINATION. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof, this Agreement
may be terminated by the Representatives prior to or on the First Closing Date
and the over-allotment option from the Company and the Selling Shareholders
referred to in section 6 hereof, if exercised, may be cancelled by the
Representatives at any time prior to or on the Second Closing Date, if in the
judgment of the Representatives, payment for and delivery of the Shares is
rendered impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been
generally established on the New York Stock Exchange or the American
Stock Exchange, or trading in securities generally shall have been
suspended or materially limited on either such exchange or on the
Nasdaq National Market or a general banking moratorium shall have been
established by either federal or state authorities in New York, Ohio or
Wisconsin;
(b) any event shall have occurred or shall exist which makes
untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or which is not
reflected in the Registration Statement but should be reflected therein
to make the statements or information contained therein not misleading
in any material respect; or
(c) an outbreak or escalation of hostilities or other national
or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have
accelerated to such extent, in the judgment of the Representatives, as
to have a material adverse effect on the financial markets of the
United States, or to make it impracticable or inadvisable to proceed
with completion of the sale of and payment for the Shares as provided
in this Agreement.
Any termination pursuant to this Section shall be without
liability on the part of any Underwriter to the Company and any Principal
Shareholder, or on the part of the Company and any Principal Shareholder to any
Underwriter, except for expenses to be
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paid by the Company pursuant to section 9 hereof or reimbursed by the Company
pursuant to section 7(n) hereof and except as to indemnification to the extent
provided in section 12 hereof.
SECTION 16. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations,
warranties, covenants and other statements of the Company, of its officers or
directors, of the Principal Shareholders, of the Selling Shareholders, and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, Principal Shareholder, Selling Shareholder or the
Company or any of its or their partners, officers, directors or any controlling
person, as the case may be, and will survive delivery of and payment for the
Shares sold hereunder.
SECTION 17. NOTICES. All communications hereunder will
be in writing and, if sent to the Representatives, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to Xxxxxx X.
Xxxxx & Co. Incorporated at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxxxx X. Xxxx, with a copy to Xxxxxxx X. Xxxxxx, Esq., Xxxx,
Stettinius & Hollister, 000 Xxxxxx Xxxxxx, 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000 and if sent to the Company, will be mailed, delivered, telecopied
(with receipt confirmed) or telegraphed and confirmed to the Company at 00000
Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000, Attention: President, with a copy to
Xxxxxxx, Xxxxxxxx & Xxxxxxx, 1800 Provident Tower, Xxx Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.; and, if sent to the
Selling Shareholders, will be mailed, delivered, telecopied (with receipt
confirmed) or telegraphed and confirmed to the Attorneys-in-Fact, or either of
them, in care of the Company, with copies to
______________________________________________________; and, if sent to the
Principal Shareholders, will be mailed, delivered, telecopied (with receipt
confirmed) or telegraphed and confirmed to each such Principal Shareholder c/o
the Company, with copies to _________________________________________________.
SECTION 18. SUCCESSORS. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in section 12 hereof
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 19. PARTIAL UNENFORCEABILITY. If any section,
paragraph, clause or provision of this Agreement is for any reason determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
SECTION 20. APPLICABLE LAW; COUNTERPARTS. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Wisconsin without reference to conflict of law principles
thereunder. This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument, and shall be effective when at
least one counterpart hereof shall have been executed by or on behalf of each
party hereto.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, each of the
Principal Shareholders, each of the Selling Shareholders and the several
Underwriters, including the Representatives, all in accordance with its terms.
Very truly yours,
LSI INDUSTRIES INC.
By:
--------------------------------------------
Xxxxxx X. Ready, Chairman of the Board
and President
THE PRINCIPAL SHAREHOLDERS:
-----------------------------------------------
Xxxxxx X. Ready
-----------------------------------------------
Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxx, Xx.
THE SELLING SHAREHOLDERS:
-----------------------------------------------
Xxxxxx X. Ready
-----------------------------------------------
Xxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxx
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-----------------------------------------------
Xxxx X. Xxxxxx, Xx.
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
XXXXXX X. XXXXX & CO. INCORPORATED
X.X. XXXXXXX & SONS, INC.
THE OHIO COMPANY
By: XXXXXX X. XXXXX & CO. INCORPORATED
Acting as Representatives of the several
Underwriters (including themselves) identified
in Schedule II annexed hereto.
By:
---------------------------------------
Authorized Representative
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LSI INDUSTRIES INC.
Schedule I
----------
Number of Firm Number of Optional
Shares Shares
------ ------
The Company 1,100,000 165,000
The Selling Shareholders:
Xxxxxx X. Ready --------- -------
Xxxxx X. Xxxxxx --------- -------
Xxxxxx X. Xxxxxxx --------- -------
Xxxx X. Xxxxxx, Xx. --------- -------
Total . . . . . . . . . . . . . . . . . . . . . . 1,800,000 270,000
========= =======
41
LSI INDUSTRIES INC.
Schedule II
-----------
Number of Firm
Shares to
Name of Underwriter be Purchased
------------------- ------------
Xxxxxx X. Xxxxx & Co. Incorporated . . . . . . . . . . . . . . . . .
X.X. Xxxxxxx & Sons, Inc. . . . . . . . . . . . . . . . . . . . . . .
The Ohio Company . . . . . . . . . . . . . . . . . . . . . . . . . .
42
LSI INDUSTRIES INC.
Schedule III
Number of Common
Name of Shareholder Shares
------------------- ------
