Exhibit 1.1
4,600,000 SHARES
TECHNITROL, INC.
COMMON STOCK, $0.125 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
__________, 2002
_____________, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Technitrol, Inc., a Pennsylvania corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") 4,600,000 shares of its common stock, $0.125 par value per share
(the "FIRM SHARES"). The Company also proposes to issue and sell to the several
Underwriters not more than an additional 690,000 shares of its common stock,
$0.125 par value per share (the "ADDITIONAL SHARES"), if and to the extent that
you, as Managers of the offering, shall have determined to exercise, on behalf
of the Underwriters, the right to purchase such shares of common stock granted
to the Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares of
common stock, $0.125 par value per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and all
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documents incorporated therein by reference, is hereinafter referred to as the
"REGISTRATION STATEMENT"; the prospectus in the form first used to confirm sales
of Shares is hereinafter referred to as the "PROSPECTUS." If the Company has
filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act)
and incorporated by reference in the Prospectus complied at the time of
the filing thereof or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder, (ii) the Registration Statement, when it
became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a
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material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a Material Adverse Effect. As used in this
Agreement, the term "Material Adverse Effect" shall mean any material
adverse effect upon the condition, financial or otherwise, or upon the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole. As used in this Agreement, the term "subsidiary"
shall mean a "majority-owned subsidiary" as defined in Rule 405 of the
Securities Act.
(d) Each subsidiary of the Company has been duly organized, is
validly existing as a corporation, limited liability company or other
type of business entity (including any foreign equivalents thereof) in
good standing under the laws of the jurisdiction of its organization,
has the requisite power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a
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Material Adverse Effect; all of the issued shares of capital stock,
membership interests or other ownership interests of each subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, except nominal qualifying shares as required by local law,
free and clear of all liens, encumbrances or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered and paid for in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene (i) any provision of applicable law, (ii) the
certificate of incorporation or by-laws of the Company, (iii) any
agreement or other instrument binding upon the Company or any of its
subsidiaries or (iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, except, in the case of each of (i), (iii) and (iv), for any
contravention which would not result in a Material Adverse Effect; no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky
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laws of the various states in connection with the offer and sale of the
Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required
pursuant to Item 103 of Regulation S-K to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
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(n) Except as disclosed in the Prospectus, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, result in a Material Adverse Effect.
(o) Except as disclosed in the Prospectus, there are no costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, result in a Material Adverse
Effect.
(p) Except for the obligation to register the securities
purchasable upon exercise of the rights under the Company's Rights
Agreement, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Securities Act
with respect to any securities of the Company or to require the Company
to include such securities with the Shares registered pursuant to the
Registration Statement.
(q) [Intentionally omitted]
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(r) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(s) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and
all other material properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by them; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any material leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them, except to the extent that the enforceability of the rights and
remedies of the Company or any of its subsidiaries under any such lease
may be limited by bankruptcy, insolvency or similar laws generally
affecting the rights of creditors and by equitable principles limiting
the right to specific performance or other equitable relief.
(t) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
would have a Material Adverse Effect.
(u) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, all trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") material to the business of the Company
and its subsidiaries taken as a whole, and have not received any
written notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries,
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would individually or in the aggregate have a Material Adverse Effect.
(v) The financial statements included in each Registration
Statement and the Prospectus present fairly, in all material respects,
the financial position of the Company and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows
for the periods shown, and such financial statements have been prepared
in conformity with the generally accepted accounting principles in the
United States applied on a consistent basis and the schedules included
in each Registration Statement present fairly, in all material
respects, the information required to be stated therein.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have the right to purchase, severally and not jointly, up to 690,000 Additional
Shares in the aggregate at the Purchase Price. You may exercise this right on
behalf of the Underwriters in whole or from time to time in part by giving
written notice of each election to exercise the option not later than 30 days
after the date of this Agreement. Any exercise notice shall specify the number
of Additional Shares to be purchased by the Underwriters and the date on which
such shares are to be purchased. Each purchase date must be at least one
business day after the written notice is given and may not be earlier than the
Closing Date (as defined below) for the Firm Shares nor later than ten business
days after the date of such notice. Additional Shares may be purchased as
provided in Section 4 hereof solely for the purpose of covering over-allotments
made in connection with the
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offering of the Firm Shares. On each day, if any, that Additional Shares are to
be purchased (an "Option Closing Date"), each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased on such
Option Closing Date as the number of Firm Shares set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 90 days after the date of the Prospectus, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) issuances of shares of Common Stock
pursuant to the conversion or exchange of convertible or exchangeable securities
or the exercise of warrants or options, in each case outstanding on the date
hereof, (C) grants of employee or director stock options or issuances of shares
of Common Stock to employees or directors pursuant to the terms of a plan in
effect on the date hereof, or (D) issuances of shares of Common Stock pursuant
to the Company's Rights Agreement or dividend reinvestment plan.
3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The
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Company is further advised by you that the Shares are to be offered to the
public initially at $_____________ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not in
excess of $______ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $_____ a share, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on ____________,
2002,(1) or at such other time on the same or such other date, not later than
_________, 2002,(2) as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
corresponding notice described in Section 2 or at such other time on the same or
on such other date, in any event not later than _______, 2002,(3) as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE".
The Firm Shares and Additional Shares shall be registered in
such names and in such denominations as you
-------------------
(1) Insert date 3 business days or, in the event the offering is priced
after 4:30 p.m. Eastern Time, 4 business days after date of Underwriting
Agreement.
(2) Insert date 5 business days after the date inserted in accordance with
note 1 above.
(3) Insert date 10 business days after the expiration of the green shoe
option.
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shall request in writing not later than one full business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be. The Firm
Shares and Additional Shares shall be delivered to you on the Closing Date or an
Option Closing Date, as the case may be, for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters duly paid, against payment of the
Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 4:00 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in
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your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, in which such officer shall state that: Section
5(a)(i) above has been satisfied; the representations and warranties of
the Company contained in this Agreement are true and correct in all
material respects (except for those already qualified by materiality,
which shall be true and correct in all respects) as of the Closing Date
(except for those representations and warranties which address matters
only as of a particular date, which shall remain true and correct as of
such date); and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP ("Xxxxxxxx Ronon")
outside counsel for the Company, dated the Closing Date, to the effect
that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material
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adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iv) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(vi) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
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(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Shares;
(ix) the statements relating to legal matters,
documents or proceedings included in (A) the Prospectus under
the captions "Risk Factors," "Business-Litigation,"
"Description of Capital Stock" and "Underwriters" and (B) the
Registration Statement in Items 14 and 15, in each case fairly
summarize in all material respects such matters, documents or
proceedings;
(x) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be
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filed as exhibits to the Registration Statement that are not
described or filed as required;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
required to register as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xii) the Company and its subsidiaries (A) are in
compliance with any and all applicable Environmental Laws, (B)
have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to
conduct their respective businesses and (C) are in compliance
with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and
(xiii) nothing has come to the attention of such
counsel that causes such counsel to believe that (A) the
Registration Statement or the Prospectus (except for the
financial statements and financial schedules and other
financial and statistical data included therein, as to which
such counsel need not express any belief) do not comply as to
form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) the Registration Statement or the
Prospectus included therein (except for the financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any belief) at the time the Registration Statement
became
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effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(C) the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data
included therein, as to which such counsel need not express
any belief) as of its date or as of the Closing Date contained
or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation ("WSGR"), counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in Sections 5(c)(___),
5(c)(___), 5(c)(___) (but only as to the statements in the Prospectus
under "Underwriters") and 5(c)(___) above.
With respect to Section 5(c)(___) above, WSGR may state that
their beliefs are based upon their participation in the preparation of
the Registration Statement and Prospectus and any amendments or
supplements thereto (other than the documents incorporated by
reference) and upon review and discussion of the contents thereof
(including documents incorporated by reference), but are without
independent check or verification except as specified.
The opinion of Xxxxxxxx Ronon described in Section 5(c) above
shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
(e) The Underwriters shall have received, on each of the
date hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from KPMG, LLP, independent public accountants,
containing statements and information of
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the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in, or incorporated by reference into,
the Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(f) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain officers and directors of
the Company relating to sales and certain other dispositions of shares
of Common Stock or certain other securities, delivered to you before
the date hereof, shall be in full force and effect on the Closing Date,
and the "lock-up" agreements, each substantially in the form of Exhibit
B hereto, between you and certain shareholders of the Company listed on
Exhibit B, relating to sales and certain other dispositions of shares
of Common Stock or certain other securities, delivered to you before
the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Shares to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Shares.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four (4) signed copies
of the Registration Statement (including exhibits thereto and documents
incorporated by reference) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto but including
documents incorporated by reference) and,
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during the period mentioned in paragraph (c) below, as many copies of
the Prospectus, any documents incorporated by reference, and any
supplements and amendments thereto as you may reasonably request. The
terms "supplement" and "amendment" or "amend" as used in this Agreement
shall include all documents subsequently filed by the Company with the
Commission pursuant to the Exchange Act that are deemed to be
incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense (except as provided below),
to the Underwriters and to the dealers (whose names and addresses you
will furnish to the Company) to which Shares may have been sold by you
on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law;
19
provided, however, in case any Underwriter is required to deliver a
prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare and furnish such prospectus or
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(d) To endeavor to qualify the Shares for offer and sale under
(or obtain exemptions from the application of) the securities or Blue
Sky laws of such jurisdictions as you shall reasonably request;
provided, however, that 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 or
where it would be subject to taxation as a foreign corporation.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending [March __], 2003 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the
20
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection
with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for
offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification
and in connection with the Blue Sky or Legal Investment memorandum,
(iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association
of Securities Dealers, Inc., (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form
8-A relating to the Common Stock and all costs and expenses incident to
listing the Shares on the New York Stock Exchange, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution", and the last paragraph of
Section 9 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their
21
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may
make.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, each person, if any, who controls
any Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and each affiliate of the Company within the meaning of Rule 405
under the Securities Act, to the same extent as the foregoing indemnity from the
Company to such Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
22
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel reasonably required) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the
case of parties indemnified pursuant to Section 7(a), and by the Company, in the
case of parties indemnified pursuant to Section 7(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any
23
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(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
7(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the proceeds (after deducting underwriting discounts
and commissions) from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the Underwriters
on the other hand 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
24
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any
25
affiliate of any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
8. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets, currency exchange rates or controls or any calamity
or crisis that, in your judgment, is material and adverse and which, singly or
together with any other event specified in this clause (v), makes it, in your
judgment, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the
26
number of Firm Shares set forth opposite their respective names in Schedule I
bears to the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or
27
refusal on the part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or faxed and confirmed to
the Underwriters, c/o Morgan Xxxxxxx & Co. Incorporated, at 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000, Attention: Investment Banking (fax: 000-000-0000), or, if sent
to the Company, will be mailed, delivered or faxed and confirmed to it at
Technitrol, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Attention: General Counsel (fax: 000-000-0000).
13. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
28
Very truly yours,
Technitrol, Inc.
By:______________________________________
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:________________________________
Name:
Title:
29
SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
[NAMES OF OTHER UNDERWRITERS]
---------------
Total ........
===============
EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 2002
Technitrol, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
As an inducement to Xxxxxx Xxxxxxx & Co., Incorporated, Xxxx Xxxxx
Xxxx Xxxxxx, Incorporated and Credit Suisse First Boston Corporation (together,
the "Underwriters") to execute the Underwriting Agreement, pursuant to which an
offering will be made that is intended to result in an orderly market for the
Common Stock, $0.125 par value per share (the "SECURITIES") of Technitrol, Inc.,
and any successor (by merger or otherwise) thereto, (the "COMPANY"), the
undersigned hereby agrees that from the date hereof and until 90 days after the
public offering date set forth on the final prospectus used to sell the
Securities (the "PUBLIC OFFERING DATE") pursuant to the Underwriting Agreement,
to which the Company will become party, the undersigned will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, any
shares of Securities or securities convertible into or exchangeable or
exercisable for any shares of Securities, enter into a transaction which would
have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Securities, whether any such aforementioned transaction is to be settled by
delivery of the Securities or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of Xxxxxx Xxxxxxx
& Co., Incorporated. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx & Co., Incorporated, it will not, during the
period commencing on the date hereof and ending 90 days after the Public
Offering Date, make any demand for or exercise any right with respect to, the
registration of
any Securities or any security convertible into or exercisable or exchangeable
for the Securities.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
the undersigned in the open market will not be subject to this Agreement. A
transfer of Securities to a family member or trust or as a bona fide gift may be
made, provided the transferee agrees to be bound in writing by the terms of this
Agreement prior to such transfer.
In furtherance of the foregoing, the Company and its transfer
agent and registrar are hereby authorized to decline to make any transfer of
shares of Securities if such transfer would constitute a violation or breach of
this Agreement.
This Agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned. This
Agreement shall lapse and become null and void if the Public Offering Date shall
not have occurred on or before April 30, 2002 or earlier upon either the
Underwriters or the Company notifying the other in writing that they or it will
not proceed with the public offering.
Very truly yours,
_________________________________________
Name:
EXHIBIT B
[FORM OF LOCK-UP LETTER FOR XXXXXX FAMILY TRUST - SURVIVOR'S SHARE, THE
XXXXXXXX XXXXX XXXXXX CHARITABLE REMAINDER UNITRUST, DATED JUNE 20, 2000
AND THE XXXXXX FAMILY TRUST - RESIDUARY TRUST SHARE]
____________, 2002
Technitrol, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
As an inducement to Xxxxxx Xxxxxxx & Co., Incorporated, Credit
Suisse First Boston Corporation and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
(together, the "Underwriters") to execute the Underwriting Agreement, pursuant
to which an offering will be made that is intended to result in an orderly
market for the Common Stock, $0.125 par value per share (the "SECURITIES") of
Technitrol, Inc., and any successor (by merger or otherwise) thereto, (the
"COMPANY"), the undersigned hereby agrees that from the date hereof and until 90
days after the public offering date set forth on the final prospectus used to
sell the Securities (the "PUBLIC OFFERING DATE") pursuant to the Underwriting
Agreement, to which the Company will become party, the undersigned will not
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any shares of Securities or securities convertible into or
exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, or to enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior written
consent of Xxxxxx Xxxxxxx & Co., Incorporated. In addition, the undersigned
agrees that, without the prior written consent of Xxxxxx Xxxxxxx & Co.,
Incorporated, it will not, during the period commencing on the date hereof and
ending 90 days after the Public Offering Date, make any demand for or exercise
any right with respect to, the registration of any Securities or any security
convertible into or exercisable or exchangeable for the Securities.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
the undersigned in the open market will not be subject to this Agreement. In
addition, it is agreed and understood that up to 200,000 shares owned in the
aggregate by the Xxxxxx Family Trust - Survivor's Share, the Xxxxxxxx Xxxxx
Xxxxxx Charitable Remainder Unitrust, dated June 20, 2000 and the Xxxxxx Family
Trust - Residuary Trust Share shall not be subject to this Agreement. A transfer
of Securities to a family member or trust or as a bona fide gift may be made,
provided the transferee agrees to be bound in writing by the terms of this
Agreement prior to such transfer.
In furtherance of the foregoing, the Company and its transfer
agent and registrar are hereby authorized to decline to make any transfer of
shares of Securities if such transfer would constitute a violation or breach of
this Agreement.
This Agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned. This
Agreement shall lapse and become null and void if the Public Offering Date shall
not have occurred on or before April 30, 2002 or earlier upon either the
Underwriters or the Company notifying the other in writing that they or it will
not proceed with the public offering.
Very truly yours,
..................................................................
By:
..................................................................
Name:
Trustee
By:
..................................................................
Name:
Trustee
