Exhibit 1
GC&D DRAFT OF 2/27/97 CUNO INCORPORATED
2,000,000 Shares of Common Stock*
UNDERWRITING AGREEMENT
----------------------
[March] ___, 1997
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX GULL XXXXXXX & XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
As Representatives of the Several Underwriters
Identified in Schedule I Annexed Hereto
c/o Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
1. INTRODUCTORY. CUNO Incorporated, a Delaware corporation (the
"Company"), proposes to sell 2,000,000 shares (the "Firm Shares") of common
stock, $.001 par value per share (the "Common Stock"), to the several
underwriters identified in Schedule I annexed hereto (the "Underwriters"), who
are acting severally and not jointly. In addition, the Company has agreed to
grant to the Underwriters an option to purchase up to 300,000 additional shares
of Common Stock (the "Optional Shares") as provided in section 5 hereof. The
Firm Shares and, to the extent such option is exercised, the Optional Shares are
hereinafter collectively referred to as the "Shares."
You, as representatives of the Underwriters (the "Representatives"), have
advised the Company that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon hereafter as in your judgment is
advisable and that the public offering price of the Shares initially will be
[$_____] per share.
The Company hereby confirms its agreements with the Underwriters as
follows:
______________________
* Plus an option to acquire up to 300,000 additional shares of Common Stock
from the Company to cover over-allotments.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees 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 of 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 certificate of incorporation or articles of incorporation
and by-laws, as amended or restated ("Certificate of Incorporation" and "By-
laws," 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 shares of Common Stock issued and outstanding immediately prior to
the issuance and sale of the Shares 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 shares of Common Stock
(including the Shares), and no shares of Common Stock have been issued in
violation of such rights. The Shares to be issued and sold 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 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 Stock or other securities of the Company or any Subsidiary, or of
securities that are convertible or exchangeable into Common Stock or
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other securities of the Company or any Subsidiary, that have rights to the
registration of such Common Stock 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 Certificate of Incorporation or By-laws 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
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of the 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-1 (Reg. No. 333-_______) with
respect to the Shares, including a preliminary form of prospectus, has been
carefully prepared by the Company in conformity with the requirements of the Act
and has been filed with the Securities and Exchange Commission (the
"Commission"). 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." 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, together with three
copies of each exhibit filed therewith, 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 has 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, 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
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
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therein or necessary to make the statements therein 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) Ernst & Young LLP, which has expressed its opinion with respect to the
consolidated financial statements and schedules filed with the Commission and
included as a part of each Preliminary Prospectus, the Prospectus or the
Registration Statement are independent accountants as required by the Act.
(h) The consolidated financial statements and the related notes thereto
included 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 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 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.
(i) 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 Certificate of Incorporation or By-laws; (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
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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.
(j) There are no legal or governmental proceedings or investigations
pending or, to the knowledge of the Company, 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 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.
(k) 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.
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(l) 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 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.
(m) 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, 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.
(n) 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 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.
(o) 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.
(p) The Company or a Subsidiary owns or possesses adequate rights to use
all patents, patent applications, trademarks, service marks, trade names,
trademark
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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.
(q) 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.
(r) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent, and neither
the Company nor any Subsidiary is a party to any collective bargaining agreement
and, to the knowledge of the Company, 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.
(s) 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.
(t) 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 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.
(u) [EXCEPT FOR THE COMPANY'S [NAME EACH GROUP HEALTH, LIFE,
DISABILITY OR OTHER WELFARE PLAN] AND ITS [NAME ANY CONTRIBUTORY OR
NONCONTRIBUTORY DEFINED
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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.
(v) 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.
(w) 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 Stock, 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.
(x) The Common Stock has been registered pursuant to Section 12(g) of
the Exchange Act. The Shares have been listed on the National Market System of
The Nasdaq Stock Market ("Nasdaq"), subject to notice of issuance.
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(y) 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.
(z) 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.
(aa) The Company has obtained for the benefit of the Underwriters
the agreement (the "Lock-up Agreement"), enforceable by Xxxxxx X. Xxxxx &
Co. Incorporated ("Baird"), of each of the officers and directors of the
Company, that for a period of 90 days after the date of the Prospectus,
such persons will not, without the prior written consent of Baird, 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 shares of Common Stock or any other Company capital stock,
rights to purchase Common Stock or any other Company capital stock or
securities or instruments convertible into or exchangeable for Common Stock
or other Company capital stock.
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 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
8(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.
3. 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.
4. 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.
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5. 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 I
annexed hereto 2,000,000 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 I
annexed hereto bears to the total number of Firm Shares to be purchased by
all of the Underwriters under this Agreement.
(b) On the First Closing Date (as hereinafter defined), the Company
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 it 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. 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 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, 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.
(c) 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 hereby agrees 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
300,000 Optional Shares from the Company 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, 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, the names and
denominations in which the certificates for such shares are to be
registered and the date
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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. 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.
(d) The Representatives have advised the Company 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 to in this Agreement, "Closing Date"
shall mean either the First Closing Date or the Second Closing Date.
6. 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 and any Prospectus
included in the Registration Statement shall be in a form approved by the
Representatives. 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 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
12
the Underwriters 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)) 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 any time to supplement the
Prospectus to comply with the 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 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 Stock nor will the Company
declare or pay any dividend or make any other distribution upon its Common
Stock payable to stockholders 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
13
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, in each case as
soon as available and in such quantities as the Representatives may
reasonably request.
(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 stockholders 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 take all necessary or appropriate action within its power
to maintain the authorization for trading of the Common Stock as a Nasdaq
National Market security, or take such action to authorize the Common Stock
for listing on the New York Stock Exchange or the American Stock Exchange,
for a period of at least thirty-six months after the date of the
Prospectus.
14
(k) Except for the issuance and sale by the Company of Common Stock
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 stock options pursuant to the Company's 1996 Stock Incentive Plan
and Non-Employee Directors' Stock Plan, copies of which are filed as
exhibits to or incorporated by reference in the Registration Statement, and
provided that none of such options shall be exercisable during the 90-day
period herein described, the Company shall not, for a period of 90 days
after the date of the Prospectus, without the prior written consent of
Baird, 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) shares of Common Stock; (ii)
rights to purchase shares of Common Stock; or (iii) securities that are
convertible or exchangeable into shares of Common Stock.
(l) The Company will maintain a transfer agent and, if required by
law or the rules of The Nasdaq Stock Market or any national securities
exchange on which the Common Stock is listed, a registrar (which, if
permitted by applicable laws and rules, may be the same entity as the
transfer agent) for its Common Stock. The Company shall, as soon as
practicable after the date hereof, use its best efforts to obtain listing
in Standard and Poor's Stock Guide, or such other recognized securities
manuals for which it may qualify for listing, and the Company shall use its
best efforts to maintain such listings for at least five years after the
First Closing Date.
(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 or affecting the Company shall occur as a result of which, in
the opinion of Baird, the market price of the Common Stock 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 Baird advising the Company of any
of the matters set forth above, promptly consult with Baird concerning the
advisability and substance of, and, if the Company and Baird determine that
it is appropriate, disseminate, a press release or other public statement
responding to or commenting on, such rumor, publication or event.
(n) The Company will comply or cause to be complied with the
conditions to the obligations of the Underwriters in section 8 hereof.
7. 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
15
including such fees and disbursements described in subsection (b) of this
section 7) 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 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], 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 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.
(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.
8. 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 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 made pursuant to the provisions hereof, to
the performance by the Company of its 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 5:30 p.m., Washington, D. C. time, prior to
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, shall any proceedings for
that purpose have been initiated or threatened; and any request of the
Commission or any state securities commission for inclusion of
16
additional information in the Registration Statement, or otherwise, shall
have been complied with to the satisfaction of the Representatives.
(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;
(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; and
(iii) there shall not have occurred any change in the long-term
debt or capital stock of the Company.
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 not misleading.
(d) The Representatives shall have received an opinion of Xxxxxx
Xxxxxx & Zavis, 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
17
qualification is required, except where the failure to so register or
qualify would not have a Material Adverse Effect;
(ii) The authorized capital stock of the Company consists of
50,000,000 shares of Common Stock, par value $.001 per share, and
2,000,000 shares of Preferred Stock, par value $.001 per share, 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 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
18
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 shares of Common Stock;
(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 (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; 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 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 necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (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 to be filed as an exhibit
to the Registration Statement by the Act, which is not described or
filed 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; 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
19
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 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 Certificate
or Articles of Incorporation or By-laws 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 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 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 Stock or other securities
of the Company, or securities that are convertible or exchangeable
into Common Stock 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 Stock is a National Market Security on The Nasdaq
Stock Market and is 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 Certificate of Incorporation or By-laws 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 the Registration
Statement, to which the Company or any Subsidiary is subject or bound;
(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
20
the Shares, the Company will not become or be deemed to be an
"investment company" thereunder;
(xiii) The description in the Registration Statement and the
Prospectus of statutes, laws, regulations, legal and governmental
proceedings, and contracts and other legal documents described 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 of Xxxxxxx,
Carton & Xxxxxxx, 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 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.
(f) The Representatives shall have received on each Closing Date, a
certificate of Xxxx X. Xxxxxx, President and Chief Executive Officer,
Xxxxxx X. Xxxxxx, Senior Vice President, Treasurer and Chief
Financial Officer, of the Company, to the effect that:
(i) The representations and warranties of the Company 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 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
under the Blue Sky Laws of any jurisdiction;
21
(iii) Each of the respective signatories has carefully examined
the Registration Statement and the Prospectus, and any amendment or
supplement thereto, and such documents contain all statements required
to be stated therein, and do not 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 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
(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 Stock 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 Stock payable to
stockholders of record on a date prior to such Closing Date; since
such date and except as so 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 (f) 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.
(g) 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 Ernst & Young LLP,
the Company's
22
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 (g) 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.
(h) 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 Shares shall have been
designated for inclusion as a Nasdaq National Market Security on the Nasdaq
Stock Market.
(i) Such further certificates and documents as the Representatives may
reasonably request (including certificates of officers of the Company).
(j) Each of the officers and directors of the Company has entered into
a Lock-Up Agreement.
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 Xxxxxxx, Carton & Xxxxxxx, counsel for the Underwriters.
The Company 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
without liability on the part of any Underwriter, including the Representatives,
the Company except for the provisions of section 6(n) hereof, the expenses to be
paid by the Company pursuant to section 7 hereof and except to the extent
provided in section 10 hereof.
9. Maintain Effectiveness Of Registration Statement. The Company will use
its 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.
10. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
the Act or
23
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 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 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 agrees to reimburse each Underwriter and each such controlling person
for any 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 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 4 of this
Agreement as required by this Agreement. The indemnification obligations of the
Company as provided above are in addition to and in no way limit any liabilities
the Company may otherwise have.
(b) 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 against any Claim to which the
Company, or any such director, officer or 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, if such settlement is effected with the
written consent of such Underwriter and Baird), 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
24
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 4 of this Agreement. 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 or controlling person 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.
(c) 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 10 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 (who shall not, except with consent of the
indemnified party, be counsel to the indemnifying party) 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. No
indemnifying party shall without the written consent of the indemnified party
effect a settlement or compromise of or consent to the entry of any judgment
with respect to any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to an admission of fault,
culpability or failure to act, by or on behalf of any indemnified party.
(d) 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
25
legal fees or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation, 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 (c) 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.
(e) If the indemnification provided for in this section is
unavailable or insufficient to an indemnified party under subsection (a) or
(b) 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 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 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 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) is responsible for the remaining portion. The relative fault of the
Company 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 or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct 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 (c) and (d) of this section,
26
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
(f) The Company 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 (d) of this section. Notwithstanding the other provisions of
this section, no Underwriter shall be required to contribute any amount
that is greater than the amount bywhich 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.
11. 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 or the Company,
except for the expenses to be paid by the Company pursuant to section 7 hereof
and except to the extent provided in section 10 hereof.
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
27
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.
12. 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.
13. 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 referred to in section 5 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 Stock Market or a general
banking moratorium shall have been established by either federal or state
authorities in New York, Connecticut 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;
(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; or
(d) a downgrade shall have occurred in the rating accorded the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization" as that term is defined by the Securities
and Exchange Commission for purposes of Rule 436(g)(2) under the Act or
such organization shall have publicly
28
announced that it has under surveillance or review, with possible negative
implications, its rating of the Company's debt securities or preferred
stock.
Any termination pursuant to this Section shall be without liability on the
part of any Underwriter to the Company, or on the part of the Company to any
Underwriter, except for expenses to be paid by the Company pursuant to section 7
hereof or reimbursed by the Company pursuant to section 6(n) hereof and except
as to indemnification to the extent provided in section 10 hereof.
14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective
indemnities, agreements, representations, warranties, covenants and other
statements of the Company, of its officers or directors, 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 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.
15. 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 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X.
Xxxxxxxx, Managing Director, with a copy to Xxxxx X. Xxxxxxxx, Esq., Xxxxxxx,
Carton & Xxxxxxx, 000 X. Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; and if sent to
the Company, will be mailed, delivered, telecopied (with receipt confirmed) or
telegraphed and confirmed to the Company at 000 Xxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, with a copy to Xxxxxx Xxxxxx &
Xxxxx, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
16. 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 10 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.
17. 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.
18. 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.
29
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 and the several Underwriters,
including the Representatives, all in accordance with its terms.
Very truly yours,
CUNO INCORPORATED
By:___________________________
Xxxx X. Xxxxxx, President
30
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
XXXXXX X. XXXXX & CO. INCORPORATED
XXXXXX GULL XXXXXXX & XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
By: XXXXXX X. XXXXX & CO. INCORPORATED
Acting as Representatives of the several
Underwriters (including themselves) identified
in Schedule I annexed hereto.
By: ____________________________________
Authorized Representative
31
Cuno Incorporated
Schedule I
----------
Number of Firm
Shares to
be Purchased
Name of Underwriter --------------
-------------------
Xxxxxx X. Xxxxx & Co. Incorporated.............
Xxxxxx Gull Xxxxxxx & XxXxxxxx Inc.............
Xxxxxxx, Sachs & Co............................
_________
Total 2,000,000
32
