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EXHIBIT 1
FORM OF UNDERWRITING AGREEMENT
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EXHIBIT 1
CDW COMPUTER CENTERS, INC.
632,064 Shares Common Stock*
UNDERWRITING AGREEMENT
February __, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
As Representatives of the
Several Underwriters Named
in Schedule A
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. CDW Computer Centers, Inc., an Illinois
corporation (the "Company"), has an authorized capital stock consisting of
5,000,000 shares of Preferred Stock, $1.00 par value, of which as of the
closing of the offering of shares contemplated by this Agreement no shares will
have been issued, and 75,000,000 shares of Common Stock, $.01 par value (the
"Common Stock"), of which immediately prior to the closing of the offering of
shares contemplated by this Agreement 21,524,984 shares will be outstanding.
Certain stockholders of the Company propose to sell 632,064 shares of the
Company's issued and outstanding Common Stock, to the several underwriters
named in Schedule A as it may be amended by the Pricing Agreement hereinafter
defined (the "Underwriters"), who are acting severally and not jointly. Of the
632,064 shares of Common Stock, certain officers of the Company (the
"Management Selling Stockholders" named in Schedule B) propose to sell 500,000
shares, and certain employees of the Company (the "MPK Plan Selling
Stockholders" named in Schedule B) propose to sell 132,064 shares. The
Management Selling Stockholders and the MPK Plan Selling Stockholders are
collectively referred to herein as the "Selling Stockholders." Collectively,
such total of 632,064 shares of Common Stock proposed to be sold by the Selling
Stockholders are hereinafter referred to as the "Firm Shares." In addition,
the Management Selling Stockholders propose to grant to the Underwriters an
option to purchase up to 50,000 additional __________________
* Plus an option to acquire up to 50,000 additional shares from the
Management Selling Stockholders to cover overallotments.
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shares of Common Stock (the "Option Shares") as provided in Section 5 hereof.
The Firm Shares and, to the extent such option is exercised, the Option Shares,
are hereinafter collectively referred to as the "Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon as you deem advisable after the registration statement
hereinafter referred to becomes effective, if it has not yet become effective,
and the Pricing Agreement hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, the Selling Stockholders and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company, the Selling Stockholders and the
Representatives and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the Shares will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date
of the execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
The Company and each of the Selling Stockholders hereby confirm their
agreements with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the several Underwriters that:
(a) Registration statements on Form S-3 (File Nos. 333-20935 and
333-____) and a related preliminary prospectus with respect to the Shares
have been prepared and filed with the Securities and Exchange Commission
(the "Commission") by the Company in conformity with the requirements of
the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "1933 Act;" all references
herein to specific rules are rules promulgated under the 0000 Xxx); and
the Company has so prepared and has filed such amendments thereto, if any,
and such amended preliminary prospectuses as may have been required to the
date hereof. If the Company has elected to rely upon Rule 430A, it will
prepare and file either (i) a final prospectus pursuant to Rule 424(b)
that discloses the information previously omitted from the prospectus in
reliance upon Rule 430A or (ii) a term sheet or abbreviated term sheet
(the "Term Sheet") as described in and pursuant to Rules 434 and 424(b)
that supplements the preliminary prospectus
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included in the Registration Statement at the time it becomes effective
omitting information in reliance upon Rule 430A (the "Preliminary
Prospectus"). There have been or will promptly be delivered to you four
signed copies of such registration statement and amendments, together with
four copies of all documents incorporated by reference therein, four
copies of each exhibit filed therewith, and conformed copies of such
registration statement and amendments (but without exhibits) and of the
related preliminary prospectus or prospectuses and final forms of
prospectus or the Term Sheet and Preliminary Prospectus for each of the
Underwriters.
Such registration statements and prospectus as amended on file with
the Commission at the time the registration statement became or becomes
effective, including (i) the information deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule
430A(b) and (ii) a registration statement, if any, filed pursuant to Rule
462(b) relating to the Shares, if applicable, are hereinafter called the
"Registration Statement" and the "Prospectus," respectively, except that
if (i) the prospectus filed by the Company pursuant to Rule 424(b) differs
from the prospectus on file at the time the Registration Statement became
or becomes effective, the term "Prospectus" shall refer to the Rule 424(b)
prospectus from and after the time it is filed with the Commission or
transmitted to the Commission for filing or (ii) if a Term Sheet is used,
the term "Prospectus" shall refer to the Term Sheet filed by the Company
pursuant to Rule 424(b) together with the Preliminary Prospectus. The
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder are hereinafter collectively referred to as
the "Exchange Act." Any reference herein to any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-3 under the 1933 Act
("Incorporated Documents"), as of the date of such preliminary prospectus
or Prospectus, as the case may be. Any document filed by the Company
under the Exchange Act after the effective date of the Registration
Statement or the date of the Prospectus and incorporated by reference in
the Prospectus shall be deemed to be included in that Registration
Statement and the Prospectus as of the date of such filing.
The Incorporated Documents, when filed with the Commission, conformed
or will conform in all material respects to the requirements for the
Exchange Act and none of such documents, as of the date of such
Incorporated Document, contained or will contain an 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.
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(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to
the requirements of the 1933 Act, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, included or
will include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
Company makes no representation or warranty as to information contained in
or omitted from any preliminary prospectus, the Registration Statement,
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in the preparation thereof.
(c) Each of the Company and its subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of its place of incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Prospectus;
the Company and its subsidiary are duly qualified to do business as
foreign corporations under the corporation law of, and are in good
standing as such in, each jurisdiction in which they own or lease
properties, have an office, or in which business is conducted and such
qualification is required except in any such case where the failure to so
qualify or be in good standing would not have a material adverse effect
upon the Company and its subsidiary as a whole; and no proceeding of which
the Company has knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
(d) Except as disclosed in the Registration Statement, the Company
owns directly one hundred percent (100%) of the
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issued and outstanding capital stock of its subsidiary, free and clear of
any claims, liens, encumbrances or security interests and all of such
capital stock has been duly authorized and validly issued and is fully
paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof included or incorporated by reference in the Prospectus; and there
is no commitment, plan or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of capital
stock of the Company or its subsidiary, or any security or other
instrument which by its terms is convertible into or exchangeable for
capital stock of the Company or its subsidiary, except as described in the
Prospectus. Except as described in the Prospectus, there is outstanding
no security or other instrument that by its terms is convertible into or
exchangeable for capital stock of the Company or its subsidiary.
(f) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company or any subsidiary is a
party or by which the Company, any subsidiary or the property of any of
them may be bound or affected, or any order, rule or regulation applicable
to the Company or any subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over
the Company or any subsidiary or any of their respective properties, or
any order of any court or governmental agency or authority entered in any
proceeding to which the Company or any subsidiary was or is now a party or
by which it is bound. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or the
Pricing Agreement or the consummation of the transactions contemplated
herein or therein, except for compliance with the 1933 Act and blue sky
laws applicable to the public offering of the Shares by the several
Underwriters and clearance of such offering with the National Association
of Securities Dealers, Inc. (the "NASD"). This Agreement has been duly
executed and delivered by the Company.
(g) Coopers & Xxxxxxx L.L.P. who have expressed their opinion with
respect to certain of the financial statements
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and schedules included in the Registration Statement, are independent
accountants as required by the 1933 Act.
(h) The consolidated financial statements and schedules of the
Company and its subsidiary included or incorporated by reference in the
Registration Statement present fairly the financial position of the
Company and its subsidiary as of the respective dates of such financial
statements, and the results of operations and cash flows of the Company
and its subsidiary for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed in the
Prospectus; the supporting schedules included or incorporated by reference
in the Registration Statement present fairly the information required to
be stated therein. The financial information set forth or incorporated by
reference in the Prospectus under the caption "Selected Financial and
Operating Data" presents fairly on the basis stated in the Prospectus, the
information set therein; and the pro forma information included or
incorporated by reference in the Prospectus presents fairly the
information shown therein, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma information,
has been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
under the circumstances.
(i) Neither the Company nor any subsidiary is in violation of its
charter or in default under any consent decree, or in default with respect
to any material provision of any lease, loan agreement, franchise,
license, permit or other contract obligation to which it is a party; and
there does not exist any state of facts which constitutes an event of
default as defined in such documents or which, with notice or lapse of
time or both, would constitute such an event of default, in each case,
except for defaults which neither singly nor in the aggregate are material
to the Company and its subsidiary taken as a whole.
(j) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company or any
subsidiary is or may be a party or of which material property owned or
leased by the Company or any subsidiary is or may be the subject, or
related to environmental or discrimination matters that are not disclosed
in the Prospectus, or which question the validity of this Agreement or the
Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
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(k) There are no holders of securities of the Company having rights
to registration thereof, preemptive rights or rights of first refusal to
purchase Common Stock.
(l) The Company and its subsidiary have good and marketable title to
all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and its subsidiary
taken as a whole. The Company and its subsidiary hold their respective
leased properties which are material to the Company and its subsidiary
taken as a whole under valid and binding leases.
(m) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
(n) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set
forth in or contemplated by the Prospectus, the Company and its
subsidiary, taken as a whole, have not incurred any material liabilities
or obligations, direct or contingent, nor entered into any material
transactions not in the ordinary course of business and there has not been
any material adverse change in their condition (financial or otherwise),
business, assets, operations or prospects, nor any change in their capital
stock, nor any material change in short-term debt or long-term debt.
(o) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options,
warrants or convertible securities) for a period of 90 days after this
Agreement becomes effective without the prior written consent of Xxxxxxx
Xxxxx & Company, L.L.C., acting on behalf of the Representatives. The
Company has obtained similar agreements from the Selling Stockholders and
each director and executive officer of the Company that is not a Selling
Stockholder.
(p) There is no material 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 which is not described or
filed as required.
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(q) The Company together with its subsidiary owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all trademarks, copyrights and other proprietary rights ("Trade
Rights") material to the business of the Company and its subsidiary taken
as a whole and neither the Company nor its subsidiary has granted any lien
or encumbrance on, or granted any right of license (other than in the
ordinary course of its business) with respect to, any such Trade Rights.
Neither the Company nor its subsidiary has received any notice of
infringement, misappropriation or conflict from any third party as to such
material Trade Rights that has not been resolved or disposed of and
neither the Company nor its subsidiary has infringed, misappropriated or
otherwise conflicted with material Trade Rights of any third parties,
which infringement, misappropriation or conflict would have a material
adverse effect upon the condition (financial or otherwise), business,
assets, operations or prospects of the Company and its subsidiary taken as
a whole.
(r) The conduct of the business of the Company and its subsidiary is
in compliance in all respects with applicable federal, state, local and
foreign laws and regulations, except where the failure to be in compliance
would not have a material adverse effect upon the condition (financial or
otherwise), business, assets, operations or prospects of the Company and
its subsidiary taken as a whole.
(s) The Company and its subsidiary have filed all necessary federal
and state income and franchise tax returns and have paid all taxes shown
as due thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company is threatened to be, asserted against the Company
or its subsidiary or any of their respective properties or assets that
would or could be expected to adversely affect the financial condition,
assets, operations or prospects of the Company and its subsidiary taken as
a whole.
(t) The Shares have been authorized for trading over-the-counter on
the Nasdaq National Market.
(u) The Company is not, and does not intend to conduct its business
in a manner in which it would become, an "investment company" as defined
in Section 3(a) of the Investment Company Act of 1940, as amended.
(v) The Company and its subsidiary are in compliance with Florida
blue sky law relating to disclosure of issuers doing business with Cuba.
The Company is not presently doing business with the government of Cuba or
with any person or affiliate located in Cuba and will notify the Florida
Department of Banking and Finance, Division of Securities and
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Investor Protection, if the Company or its subsidiary commence doing
business with the government of Cuba or any person or affiliate located in
Cuba.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
STOCKHOLDERS.
(a) Each Selling Stockholder severally represents and warrants to, and
agrees with, the Company and the Underwriters that:
(i) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder.
(ii) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement and the Pricing Agreement will not contravene
any provision of applicable law, or any agreement or other
instrument binding upon such Selling Stockholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Stockholder, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by such
Selling Stockholder of its obligations under this Agreement and the
Pricing 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.
(iii) Such Selling Stockholder has, and on the First Closing
Date or the Second Closing Date hereinafter defined, as the case may
be, will have, valid marketable title to the Shares proposed to be
sold by such Selling Stockholder hereunder on such date and full
right, power and authority to enter into this Agreement and the
Pricing Agreement and to sell, assign, transfer and deliver such
Shares hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, equities, claims and community property rights;
and upon delivery of and payment for such Shares hereunder, the
Underwriters will acquire valid marketable title thereto, free and
clear of all voting trust arrangements, liens, encumbrances,
equities, claims and community property rights.
(iv) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which might be
reasonably expected to cause or result, under the Exchange Act or
otherwise, in stabilization or
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manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(v) Such Management Selling Stockholder agrees with the Company
and the Underwriters not to sell, contract to sell or otherwise
dispose of any Common Stock for a period of 90 days after this
Agreement becomes effective without the prior written consent of
Xxxxxxx Xxxxx & Company, L.L.C., acting on behalf of the
Representatives.
(vi) Such Selling Stockholder has executed and delivered a
Power of Attorney (the "Power of Attorney") among such Selling
Stockholder, Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx (the "Agents"),
naming the Agents as such Selling Stockholder's attorneys-in-fact
(and, by the execution by any Agent of this Agreement, such Agent
hereby represents and warrants that he has been duly appointed as
attorney-in-fact by the Selling Stockholders pursuant to the Power
of Attorney) for the purpose of entering into and carrying out this
Agreement and the Pricing Agreement, and the Power of Attorney has
been duly executed by such Selling Stockholder and a copy thereof
has been delivered to you.
(vii) Such Selling Stockholder further represents, warrants and
agrees that such Selling Stockholder has deposited in custody, under
a Custody Agreement (the "Custody Agreement") with Xxxxx X. Xxxxxxx,
Xx., as custodian (the "Custodian"), certificates in negotiable form
for the Shares to be sold hereunder by such Selling Stockholder, for
the purpose of further delivery pursuant to this Agreement. Such
Selling Stockholder agrees that the Shares to be sold by such
Selling Stockholder on deposit with the Custodian are subject to the
interests of the Company, the Underwriters and the other Selling
Stockholders, that the arrangements made for such custody, and the
appointment of the Agents pursuant to the Power of Attorney are to
that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder and under the Power of Attorney and the
Custody Agreement shall not be terminated except as provided in this
Agreement, the Power of Attorney or the Custody Agreement by any act
of such Selling Stockholder, by operation of law or by the death or
incapacity of such Selling Stockholder. If any individual Selling
Stockholder should die or become incapacitated, or if any other
event should occur before the delivery of the Shares hereunder, the
documents evidencing Shares then on deposit with the Custodian shall
be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity or other
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event had not occurred, regardless of whether or not the Custodian
shall have received notice thereof. Each Agent has been authorized
by such Selling Stockholder to execute and deliver this Agreement
and the Pricing Agreement and the Custodian has been authorized to
receive and acknowledge receipt of the proceeds of sale of the
Shares to be sold by such Selling Stockholder against delivery
thereof and otherwise act on behalf of such Selling Stockholder.
The Custody Agreement has been duly executed by such Selling
Stockholder and a copy thereof has been delivered to you.
(b) Each of Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx severally
represents and warrants to, and agrees with, the Company and the
Underwriters to the same effect as the representations and warranties of
the Company set forth in Section 2 of this Agreement.
(c) Each of Xxxxxx X. Xxxx and Xxxx X. Xxxxxxx severally represents
and warrants to the Company and the Underwriters that to their knowledge
neither the Registration Statement nor the Prospectus, nor any amendment
or supplement thereto, included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or on the First Closing Date, as
hereinafter defined, a properly completed and executed United States Treasury
Department Form W-8 or W-9 (or other applicable form of statement specified by
Treasury Department regulations in lieu thereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represents and warrants
to the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under the heading "Underwriting" in the Prospectus was
furnished to the Company by and on behalf of the Underwriters for use in
connection with the preparation of the Registration Statement and is correct
and complete in all material respects.
SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Selling Stockholders, severally
and not jointly, agree to sell to the Underwriters named in Schedule A hereto,
and the
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Underwriters agree, severally and not jointly, to purchase from the Selling
Stockholders the respective number of Firm Shares set forth opposite the names
of the Selling Stockholders in Schedule B hereto at the price per share set
forth in the Pricing Agreement. The obligation of each Underwriter to each
Selling Stockholder shall be to purchase from such Selling Stockholder the
number of full shares which (as nearly as practicable, as determined by you)
bears to that number of Firm Shares set forth opposite the name of such Selling
Stockholder in Schedule B hereto, the same proportion as the number of Shares
set forth opposite the name of such Underwriter in Schedule A hereto bears to
the total number of Firm Shares to be purchased by all Underwriters under this
Agreement. The public offering price and the purchase price shall be set forth
in the Pricing Agreement.
At 9:00 A.M., Chicago time, on the third or fourth full business day, as
applicable under Rule 15c6-1 of the Exchange Act, following the date of this
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company, the Company and
the Selling Stockholders will deliver to you at the offices of Winston &
Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, or through the facilities of
The Depository Trust Company for the accounts of the several Underwriters,
certificates representing the Firm Shares to be sold by them, respectively,
against payment of the purchase price therefor by Federal or other funds
immediately available to an account or accounts designated by the Selling
Stockholders. Such time of delivery and payment is herein referred to as the
"First Closing Date." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Custodian prior to 10:00 A.M., Chicago time, on the second full
business day preceding the First Closing Date, and will be made available at
the Company's expense for checking and packaging by the Representatives at
10:00 A.M., Chicago time, on the first full business day preceding the First
Closing Date. Payment for the Firm Shares so to be delivered shall be made at
the time and in the manner described above at the offices of Winston & Xxxxxx.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Management Selling Stockholders hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 50,000 Option Shares, at the same purchase price per share to be paid for
the Firm Shares, for use solely in covering any overallotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time (but not more than once) within
30 days after the date of this Agreement upon notice by you to the Company and
the Agents setting forth the aggregate number of Option Shares as to which the
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Underwriters are exercising the option, the names and denominations in which
the certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may
not be earlier than the First Closing Date), being herein referred to as the
"Second Closing Date," shall be determined by you, but if at any time other
than the First Closing Date, shall not be earlier than three nor later than 10
full business days after delivery of such notice of exercise. The maximum
number of Option Shares to be purchased from each such Management Selling
Stockholder is set forth in Schedule B hereto. If less than the maximum number
of Option Shares are to be purchased hereunder each such Management Selling
Stockholder agrees to sell the number of Option Shares purchased by the
Underwriters pursuant to this paragraph times a fraction the numerator of which
is the maximum number of Option Shares to be purchased from such Management
Selling Stockholder as set forth on Schedule B hereto and the denominator of
which is the maximum number of Option Shares to be purchased from all
Management Selling Stockholders as set forth on Schedule B hereto (subject to
such adjustments to eliminate any fractional share purchases as you in your
absolute discretion may make). The number of Option Shares to be purchased by
each Underwriter shall be determined by multiplying the number of Option Shares
to be sold by the Management Selling Stockholders pursuant to such notice of
exercise by a fraction, the numerator of which is the number of Firm Shares to
be purchased by such Underwriter as set forth opposite its name in Schedule A
and the denominator of which is the total number of Firm Shares (subject to
such adjustments to eliminate any fractional share purchases as you in your
absolute discretion may make). Certificates for the Option Shares will be made
available at the Company's expense for checking and packaging at 10:00 A.M.,
Chicago time, on the first full business day preceding the Second Closing Date.
The manner of payment for and delivery of the Option Shares shall be the same
as for the Firm Shares as specified in the preceding paragraph.
You have advised the Selling Stockholders that each Underwriter has
authorized you to accept delivery of its Shares, to make payment and to give
receipt therefore. You, individually and not as the Representatives of the
Underwriters, may make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by you 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 hereunder.
SECTION 6. COVENANTS OF THE COMPANY. The Company covenants and agrees
that:
(a) The Company will advise you and the Selling Stockholders promptly
of the issuance by the Commission of any
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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 you and the Selling Stockholders 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 will not file any amendment or
supplement to the Registration Statement, to any preliminary prospectus or
to the Prospectus of which you and the Selling Stockholders have not been
furnished with a copy prior to such filing or to which you reasonably
object.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result
of which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b), to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, 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 promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(c) Neither the Company nor its subsidiary will, prior to the earlier
of the Second Closing Date or termination or expiration of the related
option, incur any liability or obligation, direct or contingent, or enter
into any material transaction, other than in the ordinary course of
business, except as contemplated by the Prospectus.
(d) Neither the Company nor its subsidiary will acquire any capital
stock of the Company prior to the earlier of the
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Second Closing Date or termination or expiration of the option
relating to the Option Shares nor will the Company declare or pay any
dividend or make any other distribution upon the Common Stock payable to
stockholders of record on a date prior to the earlier of the Second
Closing Date or termination or expiration of the option relating to the
Option Shares, except in either case as contemplated by the Prospectus.
(e) As soon as practicable, but in any event not later than August
15, 1998, the Company will make generally available to its security
holders and the Representatives an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
effective date of the Registration Statement, which will satisfy the
provisions of the last paragraph of Section 11(a) of the 1933 Act and Rule
158 under the 1933 Act.
(f) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to the Representatives and
counsel for the Underwriters at its expense, subject to the provisions of
subsection (b) hereof, signed copies of the Registration Statement
(including exhibits thereto), and to each Underwriter copies of the
Registration Statement (without exhibits thereto) and the Prospectus, each
preliminary prospectus, the Incorporated Documents and all amendments and
supplements to any such documents in each case as soon as available and in
such quantities as you may reasonably request, for the purposes
contemplated by the 1933 Act.
(g) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for 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 currently qualified or where it would be subject to
taxation as a foreign corporation.
(h) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission; and (ii) as soon as available, of each report of the
Company mailed to its stockholders.
(i) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately
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following the execution and delivery of the Pricing Agreement, the Company
will prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A, Rule 424(b) and/or Rule 434, copies of an
amended prospectus or Term Sheet, or, if required by such Rule 430A and/or
Rule 434, a post-effective amendment to the registration statement
(including an amended prospectus), containing all information so omitted.
If required, the Company will prepare and file, or transmit for filing, a
Rule 462(b) registration statement not later than the date of execution of
the Pricing Agreement. If a Rule 462(b) registration statement is filed,
the Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule 111.
(j) The Company will use its best efforts to maintain the designation
of the Shares to be sold hereunder on the Nasdaq National Market, unless
the Company's board of directors determines otherwise. The Company will
pay the fee of the NASD in connection with the review of the offering.
(k) The Company will promptly deliver to the Representatives copies
of all correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Shares under the
1933 Act.
(l) Prior to the First Closing Date, the Company will issue no press
release or other communication directly or indirectly and hold no press
conference with respect to the Company or its subsidiary or with respect
to the financial condition, results of operations, business, properties,
assets or liabilities of any of them, or the offering of the Shares,
without your prior written consent, which consent shall not be
unreasonably withheld.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as
to all of its provisions or is terminated, the Company and the Selling
Stockholders agree to pay (i) all costs, fees and expenses (other than legal
fees and disbursements of counsel for the Underwriters and the expenses
incurred by the Underwriters) incurred in connection with the performance of
the Company's obligations hereunder, including without limiting the generality
of the foregoing, all fees and expenses of legal counsel for the Company and of
the Company's independent accountants, all costs and expenses incurred in
connection with the preparation, printing, filing and distribution of the
Registration Statement, each preliminary prospectus and the Prospectus
(including all Incorporated Documents, exhibits and financial statements) and
all amendments and supplements provided for herein, this Agreement, the Pricing
Agreement and a blue sky
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memorandum, (ii) all costs, fees and expenses (including legal fees and
disbursements of counsel for the Underwriters not to exceed $5,000) incurred by
the Underwriters in connection with qualifying all or any part of the Shares
for offer and sale under blue sky laws, including the preparation of a blue sky
memorandum relating to the Shares and clearance of such offering with the NASD;
and (iii) all fees and expenses of the Company's transfer agent, printing of
the certificates for the Shares and all transfer taxes, if any, with respect to
the sale and delivery of the Shares to the several Underwriters.
The provisions of this Section shall not affect any agreement
which the Company and the Selling Stockholders may make for the allocation or
sharing of such expenses and costs.
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date
shall be subject to the accuracy of the representations and warranties on the
part of the Company and the Selling Stockholders herein set forth as of the
date hereof and as of the First Closing Date or the Second Closing Date, as the
case may be, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 8:30 A.M.,
Chicago time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but
in no event later than 1:00 P.M., Chicago time, on the third full business
day following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending or, to the knowledge of the Company, the Selling Stockholders or
you, shall be contemplated by the Commission. If the Company has elected
to rely upon Rule 430A and/or Rule 434, the information concerning the
public offering price of the Shares and price-related information shall
have been transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed period and the Company will provide evidence
satisfactory to the Representatives of such timely filing (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rules 430A
and 424(b)). If a Rule 462(b) registration statement is required, such
registration
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statement shall have been transmitted to the Commission for filing and
become effective within the prescribed time period and, prior to the First
Closing Date, the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form
of the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings
and other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company or its subsidiary, whether or not arising in the
ordinary course of business, which, in the judgment of the
Representatives, makes it impractical or inadvisable to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Saitlin, Xxxxxx, Xxxxx & Samotny Ltd.,
counsel for the Company and for the Selling Stockholders, addressed
to the Underwriters and dated the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Illinois
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with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and the
Company has been duly qualified to do business as a foreign
corporation under the corporation law of, and is in good
standing as such in, every jurisdiction where the ownership or
leasing of property, or the conduct of its business requires
such qualification except where the failure so to qualify
would not have a material adverse effect upon the condition
(financial or otherwise), business, assets, operations or
prospects of the Company and its subsidiary taken as a whole;
(2) an opinion to the same general effect as clause (1)
of this subparagraph (i) in respect of each subsidiary of the
Company;
(3) all of the issued and outstanding capital stock of
each subsidiary of the Company has been duly authorized,
validly issued and is fully paid and nonassessable, and,
except as disclosed in the Registration Statement, the Company
owns directly 100 percent of the outstanding capital stock of
each subsidiary, and to the best knowledge of such counsel,
such stock is owned free and clear of any claims, liens,
encumbrances or security interests and there are no
outstanding rights, subscriptions, warrants, calls, preemptive
rights, options or other agreements of any kind with respect
to the capital stock of each subsidiary of the Company;
(4) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus (except for subsequent issuances, if
any, pursuant to stock options or other rights referred to in
the Prospectus), conforms as to legal matters in all material
respects to the description thereof included or incorporated
by reference in the Registration Statement and Prospectus;
(5) the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is
fully paid and nonassessable and free of preemptive rights or
rights of first refusal;
(6) the Shares to be sold hereunder have been duly and
validly authorized and qualified for
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trading over-the-counter on the Nasdaq National Market;
(7) the Registration Statement has become effective under
the 1933 Act, and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
1933 Act, and the Registration Statement (including the
information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b) and/or Rule
434, if applicable), the Prospectus and each amendment or
supplement thereto (except for the financial statements and
other statistical or financial data included or incorporated
by reference therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act; such counsel have no reason to
believe that either the Registration Statement (including the
information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b) and/or Rule
434, if applicable) or the Prospectus, or the Registration
Statement or the Prospectus as amended or supplemented (except
as aforesaid), as of their respective effective or issue
dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus as amended or supplemented, if applicable,
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 to state any material fact necessary to make
the statements therein not misleading in light of the
circumstances under which they were made; and such counsel
does not know of any legal or governmental proceedings pending
or threatened required to be described in the Prospectus which
are not described as required, nor of any contracts or
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described
or filed, as required;
(8) all documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied
as to form in all material
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respects with the requirements of the Exchange Act; and such
counsel has no reason to believe that any of such documents,
when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents
were so filed, not misleading; such counsel need express no
opinion as to the financial statements or other financial or
statistical data contained in any such document;
(9) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been
duly authorized by all necessary corporate action and this
Agreement and the Pricing Agreement have been duly executed
and delivered by and on behalf of the Company, and are legal,
valid and binding agreements of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable to
equitable and similar remedies and except as to those
provisions relating to indemnities for liabilities arising
under the 1933 Act as to which no opinion need be expressed;
and no approval, order, authorization or consent of any public
board, agency, or instrumentality of the United States or of
any state or other jurisdiction is necessary in connection
with the performance by the Company of its obligations under
this Agreement (other than under the 1933 Act, applicable blue
sky laws and the rules of the NASD);
(10) to the best of such counsel's knowledge after due
inquiry, neither the Company nor its subsidiary is in breach
of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a breach of,
or default under), any indenture, mortgage, deed of trust,
credit agreement or other agreement or instrument to which the
Company or its subsidiary are a party or by which any of them
or their respective properties may be bound or affected, where
such breach or default could have a material adverse effect on
the condition (financial or otherwise), business, assets,
operations or prospects of the Company and its subsidiary,
taken as a whole;
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(11) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a
default under, any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument known to such
counsel, of the Company or its subsidiary or by which the
property of any of them is bound and which contravention or
default would be material to the Company and its subsidiary
taken as a whole; or violate any of the provisions of the
charter or bylaws of the Company or its subsidiary or, so far
as is known to such counsel, violate any statute, order, rule
or regulation of any regulatory or governmental body having
jurisdiction over the Company or its subsidiary;
(12) the descriptions in the Registration Statement of
laws, regulations and rules, of legal and governmental
proceedings and of contracts, agreements, leases and other
documents including, without limitation, under the headings
"Risk Factors -- Legal Proceedings" and "Business -- Legal
Proceedings" have been reviewed by such counsel and are
accurate in all material respects, and comply as to form in
all material respects with the applicable requirements of the
1933 Act and the rules and regulations thereunder;
(13) except as disclosed in the Prospectus, no person has
the right, contractual or otherwise, to cause the Company to
issue or register pursuant to the 1933 Act, any shares of
capital stock of the Company, upon the issue and sale of the
Shares to be sold by the Selling Stockholders to the
Underwriters pursuant to this Agreement, nor does any person
have preemptive rights, rights of first refusal, or other
rights to purchase any capital stock of the Company;
(14) neither the Company nor its subsidiary is an
"investment company" or a person "controlled by" an
"investment company" within the meaning of the Investment
Company Act;
(15) with respect to each Selling Stockholder this
Agreement and the Pricing Agreement have been duly authorized,
executed and delivered by or on behalf of each such Selling
Stockholder; the Agents and the Custodian for each such
Selling Stockholder have been duly and validly authorized to
carry out all transactions contemplated herein on behalf of
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each such Selling Stockholder; and the performance of this
Agreement and the Pricing Agreement and the consummation of
the transactions herein contemplated by each such Selling
Stockholder will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument known to such
counsel to which each such Selling Stockholder is a party or
by which any are bound or to which any of the property of each
such Selling Stockholder is subject, or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over each such Selling
Stockholder or any of their properties; and to such counsel's
knowledge, no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement and the Pricing Agreement in connection with the
sale of Shares to be sold by each such Selling Stockholder
hereunder, except such as have been obtained under the 1933
Act and such as may be required under applicable blue sky laws
in connection with the purchase and distribution of such
Shares by the Underwriters and the clearance of such offering
with the NASD;
(16) each such Selling Stockholder has full right, power
and authority to enter into this Agreement and the Pricing
Agreement and is the sole record holder of the Shares to be
sold by such Selling Stockholder under this Agreement and, to
such counsel's knowledge, possesses full right, power and
authority to sell, assign, transfer and deliver such Shares
hereunder. Immediately prior to the consummation of the
transactions described in this Agreement, each such Selling
Stockholder was the sole registered owner of the Shares to be
sold hereunder by such Selling Stockholder. Upon registration
of such Shares in the Underwriters' name(s) in the stock
records of the Company and assuming the Underwriters have
purchased such Shares in good faith and without notice of any
adverse claim, the Underwriters will have acquired all of such
Selling Stockholder's rights in such Shares free of any
adverse claim, any lien in favor of the Company and any
restrictions on transfer imposed by the Company. Such counsel
is not aware of any such adverse claim, lien in favor of the
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Company or restrictions on transfer imposed by the Company;
and
(17) this Agreement and the Pricing Agreement are legal,
valid and binding agreements of each such Selling Stockholder
except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights and by the exercise
of judicial discretion in accordance with general principles
applicable to equitable and similar remedies and except with
respect to those provisions relating to indemnities for
liabilities arising under the 1933 Act, as to which no opinion
need be expressed.
In rendering such opinion, such counsel may state that they are
relying upon the certificate of American Stock Transfer and Trust
Company, the transfer agent for the Common Stock, as to the number
of shares of Common Stock at any time or times outstanding, and that
insofar as their opinion under clause (7) above relates to the
accuracy and completeness of the Prospectus and Registration
Statement, it is based upon a general review with the Company's
representatives and independent accountants of the information
contained therein, without independent verification by such counsel
of the accuracy or completeness of such information. Such counsel
may also rely upon the opinions of other competent counsel and, as
to factual matters, on certificates of the Selling Stockholders and
of officers of the Company and of state officials, in which case
their opinion is to state that they are so doing and copies of said
opinions or certificates are to be attached to the opinion unless
said opinions or certificates (or, in the case of certificates, the
information therein) have been furnished to the Representatives in
other form.
(ii) Such opinion or opinions of Winston & Xxxxxx, counsel for
the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the incorporation of the
Company, the Registration Statement and the Prospectus and other
related matters as you may reasonably 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.
(iii) A certificate of the Chief Executive Officer and the
Chief Financial Officer of the Company, dated the
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First Closing Date or the Second Closing Date, as the case may be,
to the effect that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as
of the date of this Agreement and as of the First Closing Date
or the Second Closing Date, as the case may be, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or
any amendment thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued;
and to the best knowledge of the respective signers, no
proceedings for that purpose have been instituted or are
pending or contemplated under the 1933 Act; and
(3) subsequent to the date of the most recent financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus (exclusive of any
supplement thereto), and except as set forth or contemplated
in the Prospectus (exclusive of any supplement thereto), (A)
neither the Company nor its subsidiary has incurred any
material liabilities or obligations, direct or contingent, nor
entered into any material transactions not in the ordinary
course of business, and (B) there has not been any material
adverse change in the condition (financial or otherwise),
business, assets, operations or prospects of the Company and
its subsidiary taken as a whole, or any change in the capital
stock or short-term debt or long-term debt of the Company and
its subsidiary taken as a whole.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty
of the Company as to the facts required in the immediately foregoing
clauses (1), (2) and (3) of this subparagraph to be set forth in
said certificate.
(iv) A certificate of each Selling Stockholder dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that the representations and
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warranties of such Selling Stockholder set forth in Section 3 of
this Agreement are true and correct as of such date and each Selling
Stockholder has complied with all the agreements and satisfied all
the conditions on the part of such Selling Stockholder to be
performed or satisfied at or prior to such date.
(v) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representatives of the Underwriters, from Coopers & Xxxxxxx L.L.P.,
independent accountants, the first one to be dated the date of the
Pricing Agreement, the second one to be dated the First Closing Date
and the third one (in the event of a second closing) to be dated the
Second Closing Date, to the effect set forth in Schedule C. There
shall not have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with
the public offering or purchase of the Shares as contemplated
hereby.
(vi) At the time the Pricing Agreement is executed, there shall
be delivered to you a letter substantially in the form of Exhibit B
hereto from each director and executive officer of the Company that
is not a Selling Stockholder, in which each such person agrees not
to sell, contract to sell or otherwise dispose of any Common Stock
or securities convertible into Common Stock (except Common Stock
issued pursuant to currently outstanding options) for a period of 90
days after the date of such letter without the prior written consent
of Xxxxxxx Xxxxx & Company, L.L.C., acting on behalf of the
Representatives.
(vii) Such further information, certificates and documents as
you may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to counsel for the Underwriters, which approval shall not be unreasonably
withheld. The Company shall furnish you with such manually signed or conformed
copies of such opinions, certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company and
the Selling Stockholders without liability on the part of any Underwriter or
the Company or
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any Selling Stockholder, except for the expenses to be paid or
reimbursed by the Company pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof.
SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the
sale to the Underwriters of the Shares on the First Closing Date is not
consummated because any condition of the Underwriters' obligations hereunder is
not satisfied or because of any refusal, inability or failure on the part of
the Company or the Selling Stockholders to perform any agreement herein or to
comply with any provision hereof, unless such failure to satisfy such condition
or to comply with any provision hereof is due to (i) the default or omission of
any Underwriter, or (ii) the bad faith failure of counsel for the Underwriters
to deliver the opinion required pursuant to Section 8(f)(ii) hereof, the
Company agrees to reimburse you and the other Underwriters upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been reasonably incurred by you and them in connection with the
proposed purchase and the sale of the Shares. Any such termination shall be
without liability of any party to any other party except that the provisions of
this Section, Section 7 and Section 11 shall at all times be effective and
shall apply.
SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the Company
and the Selling Stockholders will use your, its and their best efforts to cause
the Registration Statement to become effective, if it has not yet become
effective, and to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 11. INDEMNIFICATION. (a) The Company and each Management
Selling Stockholder, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company and/or such Management Selling
Stockholders, as the case may be), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A, if
applicable, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission
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or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and will
reimburse each Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action or pursuing its rights to indemnification provided
by this Section 11; provided, however, that neither the Company nor any
Management Selling Stockholder will be liable in any such case to the extent
that (i) any such loss, claim, damage or liability 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 any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use therein; or
(ii) if such statement or omission was contained or made in any preliminary
prospectus and corrected in the Prospectus and (1) any such loss, claim, damage
or liability suffered or incurred by any Underwriter (or any person who
controls any Underwriter) resulted from an action, claim or suit by any person
who purchased Shares that are the subject thereof from such Underwriter in the
offering and (2) such Underwriter failed to deliver or provide a copy of the
Prospectus to such person at or prior to the confirmation of the sale of such
Shares in any case where such delivery is required by the 1933 Act. This
indemnity agreement will be in addition to any liability that the Company and
the Management Selling Stockholders may otherwise have.
Without limiting the full extent of the Company's agreement to indemnify
each Underwriter, as herein provided, each Management Selling Stockholder shall
be liable under the indemnity agreements contained in paragraph (a) of this
Section only for an amount not exceeding the proceeds received by such
Management Selling Stockholder from the sale of Shares hereunder. The Company
and the Management Selling Stockholders may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which each of them shall be
responsible.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, and each Management Selling
Stockholder against any losses, claims, damages or liabilities to which the
Company, or any such director, officer or controlling person or Management
Selling Stockholder may become subject under the 1933 Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation, if
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such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are 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 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, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus,
the Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with Section 4 of this Agreement or any other written information
furnished to the Company by such Underwriter through the Representatives
specifically for use in the preparation thereof; and will reimburse any legal
or other expenses reasonably incurred by the Company, or any such director,
officer or controlling person or Management Selling Stockholder in connection
with investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, 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 of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying
parties may have conflicting interests which would make it inappropriate for
the same counsel to represent both of them, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defense
and otherwise to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to
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assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Representatives in the case of paragraph (a) representing all
indemnified parties not having different or additional defenses or potential
conflicting interest among themselves who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any 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 arising out of such proceeding.
Prior to making demand on the Management Selling Stockholders to
satisfy his or her obligations under Section 11(a), an indemnified party must
first make a written demand on the Company requesting that the Company satisfy
its obligations hereunder. If (i) the Company does not agree to satisfy such
demands by notifying the indemnified party in writing within seven days after
receipt of such demand, or (ii) after such seven day period, the indemnified
party, in its sole judgment, believes that the Company has not, or is not,
fully complying with its obligations hereunder, then the indemnified party may,
but is under no obligation to do so, make demand on the Management Selling
Stockholders to satisfy his or her obligations hereunder. An indemnified
party's failure to comply with the provisions of this paragraph shall not
relieve the Company or the Management Selling Stockholders from any liability
which it may have to any indemnified party.
(d) If the indemnification provided for in this Section is unavailable
to an indemnified party under paragraph (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the
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Company, the Selling Stockholders 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, the Selling Stockholders and the Underwriters 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
respective relative benefits received by the Company, the Selling Stockholders
and the Underwriters shall be deemed to be in the same proportion in the case
of the Company and the Selling Stockholders, as the total price paid to the
Selling Stockholders for the Shares by the Underwriters (net of underwriting
discount but before deducting expenses), and in the case of the Underwriters as
the underwriting discount received by them bears to the total of such amounts
paid to the Selling Stockholders and received by the Underwriters as
underwriting discount in each case as contemplated by the Prospectus. The
relative fault of the Company and the Selling Stockholders and the Underwriters
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the Company or by the Selling
Stockholders or by 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 losses, claims, damages and liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section, no Underwriter shall be required to contribute any amount in excess of
the amount by which the total underwriting discount applicable to the Shares
underwritten by it and distributed 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 to omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) 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.
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(e) The provisions of this Section shall survive any termination of
this Agreement.
SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Selling Stockholders to sell and deliver the
Shares hereunder, and of each Underwriter to purchase the Shares hereunder,
that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all 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 the First Closing
Date or the Second Closing Date, as the case may be, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10 percent of the total number of Shares which the
Underwriters are obligated to purchase on the First Closing Date or the Second
Closing Date, as the case may be, the Representatives may make arrangements
satisfactory to the Selling Stockholders for the purchase of such Shares by
other persons, including any of the Underwriters, but if no such arrangements
are made by such 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 date. If any Underwriter or Underwriters so default and the aggregate
number of Shares with respect to which such default or defaults occur is more
than the above percentage and arrangements satisfactory to the Representatives
and the Selling Stockholders for the purchase of such Shares by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the Selling
Stockholders, except for the expenses to be paid by the Company pursuant to
Section 7 hereof and except to the extent provided in Section 11 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, the Company or the Selling Stockholders shall have the right
to postpone the First Closing Date or the Second Closing Date, as the case may
be, for not more than seven business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 13. EFFECTIVE DATE. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
8:30 A.M., Chicago time, on the day
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following the date upon which the Pricing Agreement is executed and delivered,
unless such a day is a Saturday, Sunday or holiday (and in that event this
Agreement shall become effective at such hour on the business day next
succeeding such Saturday, Sunday or holiday); but this Agreement shall
nevertheless become effective at such earlier time after the Pricing Agreement
is executed and delivered as you may determine on and by notice to the Company
and the Selling Stockholders or by release of any Shares for sale to the
public. For the purposes of this Section, the Shares shall be deemed to have
been so released upon the release for publication of any newspaper
advertisement relating to the Shares or upon the release by you of telegrams
(i) advising Underwriters that the Shares are released for public offering, or
(ii) offering the Shares for sale to securities dealers, whichever may occur
first.
SECTION 14. TERMINATION. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
and the Selling Stockholders or by you by notice to the Company and the Selling
Stockholders at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be without
liability on the part of the Company or the Selling Stockholders to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or of
any Underwriter to the Company or the Selling Stockholders.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 5, if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or minimum
prices shall have been established on such exchange, or (ii) a banking
moratorium shall have been declared by Illinois, New York, or United States
authorities, or (iii) there shall have been an outbreak of major armed
hostilities between the United States and any foreign power which in the
opinion of the Representatives makes it impractical or inadvisable to offer or
sell the Shares. Any termination pursuant to this paragraph (b) shall be
without liability on the part of any Underwriter to the Company or the Selling
Stockholders or on the part of the Company to any Underwriter or the Selling
Stockholders (except for expenses to be paid or reimbursed pursuant to Section
7 hereof and except to the extent provided in Section 11 hereof).
SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and
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effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, or the Selling Stockholders as the case may be, and will
survive delivery of and payment for the Shares sold hereunder.
SECTION 16. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telecopied and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Fax (000) 000-0000, with a copy to Xxxxxx X. Xxxx,
Esq., Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Fax
(000) 000-0000; if sent to the Company will be mailed, delivered or telecopied
and confirmed to CDW Computer Centers, Inc., 0000 Xxxx Xxxx Xxxx Xxxx, Xxxxxxx
Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Chief Executive Officer,
Fax (000) 000-0000, with a copy to Xxxx X. Xxxxxx, Esq., Saitlin, Xxxxxx, Xxxxx
& Samotny Ltd., 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Fax
(000) 000-0000 and if sent to the Selling Stockholders will be mailed,
delivered or telegraphed and confirmed to the Agents at the addresses they have
previously furnished to the Company and the Representatives.
SECTION 17. SUCCESSORS. This Agreement and the Pricing 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
11, and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 18. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 19. PARTIAL UNENFORCEABILITY. If any section, paragraph 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 or provision hereof.
SECTION 20. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois, without giving effect to principles of conflicts of laws.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholders and the several Underwriters including you, all in accordance with
its terms.
Very truly yours,
CDW COMPUTER CENTERS, INC., an
Illinois corporation
By _________________________________
Chief Executive Officer
SELLING STOCKHOLDERS
listed in Schedule B
By:__________________________
Agent and Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
XXXXXXX Xxxxx & Company, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
Acting as Representatives of the
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By __________________________
Partner
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EXHIBIT A
CDW COMPUTER CENTERS, INC.
632,064 Shares Common Stock*
PRICING AGREEMENT
February __, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
As Representatives of the
Several Underwriters
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated, February __,
1997 (the "Underwriting Agreement") relating to the sale by the Selling
Stockholders and the purchase by the several Underwriters for whom Xxxxxxx
Xxxxx & Company, L.L.C., Xxxxxxxxxx Securities and Xxxxxxx, Xxxxxx & Xxxxxxxxx,
L.L.C. are acting as representatives (the "Representatives"), of the above
Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 5 of the Underwriting Agreement, the Company and
each of the Management Selling Stockholders agree with the Representatives as
follows:
1. The public offering price per share for the Shares to be sold by the
Management Selling Stockholders shall be $_______.
2. The purchase price per share for the Shares to be paid by the several
Underwriters to the Management Selling __________________
* Plus an option to acquire up to 50,000 additional shares from the
Management Selling Stockholders to cover overallotments.
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Stockholders shall be $______, being an amount equal to the public offering
price set forth above less $_______ per share.
Pursuant to Section 5 of the Underwriting Agreement, the Company and
each of the MPK Plan Selling Stockholders agree with the Representatives that
the public offering price per share and the purchase price per share to be paid
by the several Underwriters for the Shares shall be $________.
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, the Selling
Stockholders and the several Underwriters, including you, all in accordance
with its terms.
Very truly yours,
CDW COMPUTER CENTERS, INC.,
an Illinois corporation
By __________________________________
Chief Executive Officer
SELLING STOCKHOLDERS
listed in Schedule B
By:__________________________
Agent and Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX Xxxxx & Company, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
Acting as Representatives of the
several Underwriters named in Schedule A
By: Xxxxxxx Xxxxx & Company, L.L.C.
By __________________________
Partner
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EXHIBIT B
[Letterhead of each director and
executive officer of CDW Computer Centers, Inc.
that is not a Selling Stockholder]
CDW Computer Centers, Inc.
Public Offering of Common Stock
February __, 1997
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
As Representatives of the
Several Underwriters
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among CDW Computer
Centers, Inc., an Illinois corporation (the "Company"), each of the Selling
Stockholders named therein and you as representatives (the "Representatives")
of a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to sell, contract to sell or
otherwise dispose of any Common Stock or securities convertible into Common
Stock for a period of 90 days after the date hereof without the prior written
consent of Xxxxxxx Xxxxx & Company, L.L.C., acting on behalf of the
Representatives.
If for any reason the Underwriting Agreement shall be terminated prior to
the First Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Very truly yours,
[Signature of each applicable
director and executive officer]
[Name and address of each
applicable director and
executive officer]
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SCHEDULE A
Number of
Firm Shares
to be
Purchased
-----------
Underwriter
-----------
Xxxxxxx Xxxxx & Company, L.L.C................. _______
Xxxxxxxxxx Securities.......................... _______
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.,........... _______
____________
Total ........................ 632,064
============
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SCHEDULE B
Maximum
Number of Number of
Firm Option
Shares Shares
to be Sold to be Sold
----------- ----------
Selling Stockholders:
--------------------
Management Selling Stockholders:
Xxxxxxx X. Xxxxxx .................. 363,563 36,356
Xxxxxxx X. Xxxxx ................... 103,504 10,350
Xxxxxx X. Xxxx ..................... 21,955 2,196
Xxxx X. Xxxxxxx .................... 10,978 1,098
MPK Plan Selling Stockholder:
Xxxx X. Xxxxx ...................... 6,251
Xxxxxx X. Xxxxxx ................... 5,909
[List remaining MPK Plan Participants]
_______ ________
Total ................................. 632,064 50,000
======= ========
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SCHEDULE C
Comfort Letter of Coopers & Xxxxxxx L.L.P.
(1) They are independent public accountants with respect to the Company
and its subsidiary within the meaning of the 1933 Act and the answer to Item 10
of the Registration Statement, insofar as it relates to them, is correct.
(2) In their opinion the consolidated financial statements and
schedules of CDW Computer Centers, Inc. and subsidiary included or incorporated
by reference in the Registration Statement and the consolidated financial
statements of the Company from which the information presented under the
caption "Selected Combined Financial Data" has been derived, which are stated
therein to have been examined by them, comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiary responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1996, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiary since December 31, 1996, a reading of the latest
available interim unaudited consolidated financial statements of the Company
and its subsidiary (with an indication of the date thereof) and other
procedures as specified in such letter, nothing came to their attention which
caused them to believe that (i) the unaudited consolidated financial statements
of the Company and its subsidiary included or incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act or that such unaudited
financial statements are not fairly presented in accordance with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included or incorporated by reference
in the Registration Statement, and (ii) at a specified date not more than five
days prior to the date thereof in the case of the first letter and not more
than two business days prior to the date thereof in the case of the second and
third letters, there was any change in the capital stock or long-term debt or
short-term debt (other than normal payments) of the Company and its subsidiary
on a consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the latest
unaudited balance sheet of the Company included or incorporated by reference in
the Registration Statement
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or for the period from the date of such balance sheet to a date not more than
five days prior to the date thereof in the case of the first letter and not
more than two business days prior to the date thereof in the case of the second
and third letters, there were any decreases, as compared with the corresponding
period of the prior year, in consolidated net sales, consolidated income before
income taxes or in the total or per share amounts of consolidated net income
except, in all instances, for changes or decreases which the Prospectus
discloses have occurred or may occur or which are set forth in such letter.
(4) On the basis of reading the unaudited pro forma financial statement
data included or incorporated by reference in the Registration Statement and
the Prospectus, carrying out specified procedures, inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters, and proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma financial
statement data, nothing came to their attention which caused them to believe
that the pro forma financial statement data does not comply in form in all
material respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X of or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such statements.
(5) They have carried out specified procedures, which have been agreed
to by the Representatives, with respect to certain information included or
incorporated by reference in the Prospectus specified by the Representatives,
and on the basis of such procedures, they have found such information to be in
agreement with the general accounting records of the Company and its
subsidiary.
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