2,900,000 Shares of Common Stock
SUIZA FOODS CORPORATION
UNDERWRITING AGREEMENT
___________________, 1997
BEAR, XXXXXXX & CO. INC.
X.X. XXXXXXX & SONS, INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Suiza Foods Corporation, a corporation organized and existing under
the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named
in Schedule I hereto (the "Underwriters") 2,200,000 shares of its common
stock, par value $.01 per share (the "Common Stock"), and certain stockholders
of the Company named in Schedule II hereto (the "Selling Stockholders")
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters 700,000 shares of the Common Stock, for an aggregate of 2,900,000
shares of Common Stock (the "Firm Shares"). The Selling Stockholders also
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters, for the sole purpose of covering over-allotments in connection
with the sale of the Firm Shares, at the option of the Underwriters, up to an
additional 435,000 shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein as the "Shares". The Shares are more fully described in the Registration
Statement referred to below.
1. Representations and Warranties.
A. The Company represents and warrants to, and agrees with, the
Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and an amendment
or amendments thereto, on Form S-1 (No. 333-18263), for the registration
of the Shares under the Securities Act of 1933, as amended (the "Act").
Such registration statement, including the prospectus, financial statements
and schedules, exhibits and all other documents filed as a part thereof,
as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof
as of the time of effectiveness pursuant to paragraph (b) of Rule 430A and
paragraph (d) of Rule 434 of the Rules and Regulations of the Commission
under the Act (the "Regulations"), is herein called the "Registration
Statement," and the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations or filed as part of the
Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "Prospectus". The term
"preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 or 430A of the Regulations.
(b) Neither the Commission nor the Blue Sky or securities authority
of any jurisdiction has issued a stop order suspending the effectiveness
of the Registration Statement, preventing or suspending the use of any
preliminary prospectus, the Prospectus, the Registration Statement or any
amendment or supplement thereto, refusing to permit the effectiveness of
the Registration Statement or suspending the registration or qualification
of the Shares, nor, to the Company's knowledge, has any of such authorities
instituted or threatened to institute any proceedings with respect to a
stop order.
(c) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant
to Rule 424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date (as hereinafter respectively defined),
if any, the Registration Statement and the Prospectus and any amendments
thereof and supplements thereto complied or will comply in all material
respects with the applicable provisions of the Act and the Regulations and
does not or will not contain an untrue statement of a material fact and
does not or will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case
of the Prospectus, in light of the circumstances under which they were
made, not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the registration
statement for the registration of the Shares or any amendment thereto to
pursuant to Rule 424(a) of the Regulations) and when any amendment thereof
or supplement thereto was first filed with the Commission, such preliminary
prospectus and any amendments thereof and supplements thereto complied in
all material respects with the applicable provisions of the Act and the
Regulations and did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein in light of the
circumstances under which they were made not misleading. No representation
and warranty is made in this subsection (c), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related preliminary prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through you as herein stated expressly for use in connection with the
preparation thereof. If Rule 434 is used, the Company will comply with
the requirements of Rule 434.
(d) Deloitte & Touche LLP, who have certified the financial
statements and schedules included in the Registration Statement, are
independent public accountants with regard to the Company as required by
the Act and the Regulations.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a
-2-
material adverse change that would affect the Company's ability to perform
its obligations under this Agreement, the Company's condition (financial
or other) or the results of operations of the Company and its subsidiaries
taken as a whole, whether or not arising from transactions in the ordinary
course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has incurred or undertaken any
liabilities or obligations, direct or contingent, which are material to
the Company and its subsidiaries taken as a whole, except for liabilities
or obligations that were incurred or undertaken in the ordinary course of
business or are disclosed or reflected in the Registration Statement and
the Prospectus.
(f) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement has
been duly and validly executed and delivered by the Company.
(g) The execution and delivery do not, and the performance of this
Agreement and the consummation of the transactions contemplated hereby
will not, (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to,
any material agreement, instrument, franchise, license or permit to which
the Company or any of its subsidiaries is a party or by which any of such
corporations or their respective properties or assets may be bound or
(ii) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its subsidiaries or, to
the extent binding on the Company or its properties or assets, any material
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court
or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the
Shares to be issued, sold and delivered by the Company hereunder, except
the registration under the Act of the Shares and such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses
and permits as may be required by the National Association of Securities
Dealers, Inc. (the "NASD"), or under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(h) All of the outstanding shares of Common Stock are duly and
validly authorized and issued, fully paid and nonassessable and were not
issued and are not now in violation of or subject to any preemptive rights.
The Shares, when issued, delivered and sold in accordance with this
Agreement, will be duly and validly issued and outstanding, fully paid
and nonassessable, and will not have been issued in violation of or be
subject to any preemptive rights. The Company had, at September 30, 1996,
an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. The Common Stock, the Firm
Shares, and the Additional Shares, when issued, will conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(i) All offers and sales of (i) the Common Stock by the Company
(other than the Shares); (ii) any other securities of the Company;
(iii) any securities of Suiza Holdings, L.P.,
-3-
Suiza Holdings, Inc., Suiza Dairy Corporation, Suiza Fruit Corporation
and Xxxx Plastics Manufacturing Corp. after December 13, 1993; (iv) any
securities of Xxxxx Holdings, L.P., Xxxxx Holdings, Inc., OC Holdings,
Inc., and Xxxxx Farms, L.P., after April 13, 1994; and (v) any securities
of Reddy Ice Corporation after September 1992 were (A) issued and sold
pursuant to a registration statement declared effective under the Act or
(B) at all relevant times exempt from the registration requirements of the
Act and, in either case, were the subject of an available exemption from
the registration requirements of applicable state securities or Blue Sky
laws.
(j) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation or organization. Each of the Company
and its subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have
a material adverse effect on the Company and its subsidiaries taken as a
whole. Each of the Company and its subsidiaries has all requisite power
and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, franchises, licenses and permits of
and from all public, regulatory or governmental agencies and bodies, to
own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus, including, but not limited to, all permits, licenses or other
approvals required of them under applicable federal and state food
manufacturing, processing and distribution, occupational safety and health
and environmental laws and regulations to conduct their respective
businesses (except where the failure to obtain such consents, approvals,
authorizations, orders, registrations, qualifications, franchises,
licenses and permits could not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole), and
no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially financially
burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(k) All of the outstanding capital stock of the Company's
subsidiaries are duly and validly issued, fully paid and nonassessable and
are owned by the Company free and clear of any liens, mortgages, pledges,
charges, security interests, claims, encumbrances and other defects in
title whatsoever, except for those created or imposed under the Senior
Credit Facility (as defined in the Prospectus).
(l) Neither the Company nor any of its subsidiaries is in violation
of its certificate of incorporation or by-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any material bond, debenture, note or other
evidence of indebtedness or in any material contract, indenture, mortgage,
deed of trust, loan or credit agreement, lease, joint venture or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which any of their properties may be bound, which default
would have, singly or in the aggregate, a material adverse effect on the
Company and its subsidiaries taken as a whole, or in violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any
court or governmental agency or body, the violation of which would have,
singly or in the aggregate, a material adverse effect on the Company and
its subsidiaries taken as a whole, including, but not limited to, any
federal or state law or regulation relating to manufacturing, processing
and distributing dairy, ice or other food products, to occupational safety
and health or to the storage, handling or transportation of hazardous or
toxic materials.
-4-
(m) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or its
subsidiaries is subject or which is pending or, to the knowledge of the
Company, contemplated against the Company or any of its subsidiaries
which might result in any material adverse change or any development
involving a material adverse change that would affect the Company's
ability to perform its obligations under this Agreement, the Company's
condition (financial or other) or the results of operations of the
Company and its subsidiaries taken as a whole or which is required to be
disclosed in the Registration Statement and the Prospectus.
(n) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the shares of Common Stock to facilitate the sale or
resale of the Shares.
(o) The historical financial statements, including the notes
thereto, and schedules included in the Registration Statement and the
Prospectus present fairly, on the basis stated therein, the financial
position of the Company and the pre-acquisition companies of the
Combined Entities (as defined in the Prospectus) as of the dates of such
financial statements and the results of such operations for the periods
specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, except as otherwise disclosed in the Registration Statement; the
schedules included in the Registration Statement present fairly the
information required to be stated therein; and the other historical
financial data of the Company and its subsidiaries included in the
Registration Statement and the Prospectus are materially accurate and
prepared on a basis consistent with such financial statements and
schedules and the books and records of the Company.
(p) Except as described in the Registration Statement and the
Prospectus, no holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the
Shares contemplated hereby.
(q) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(r) The Common Stock currently outstanding is included, and upon
notice of issuance or sale, as the case may be, the Firm Shares to be
issued and sold by the Company will be approved for inclusion, on the
Nasdaq National Market.
(s) The Company and its subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the
financial statements hereinabove described and elsewhere in the
Prospectus, subject to no lien, mortgage, pledge, charge, security
interest, claim, encumbrance or other defect in title of any kind except
those, if any, created or imposed under the Senior Credit Facility, or
reflected in such financial statements or elsewhere in the Prospectus or
such as are not material to the Company and its subsidiaries taken as a
whole. The Company and its subsidiaries hold their respective leased
properties that are material to the Company and its subsidiaries taken
as whole under valid and binding leases, except for such imperfections
in title to the leasehold estates as are not material and do not
interfere with the use made and proposed to be made of such properties
by the Company and its subsidiaries.
-5-
(t) The Company, together with its subsidiaries, owns and
possesses all right, title and interest in and to, or has duly licensed
from third parties a valid and enforceable right to use, all trademarks,
copyrights, patents, trade secrets and other proprietary rights
(collectively, the "Trade Rights") presently employed by the Company and
its subsidiaries in connection with their business as described in the
Prospectus, whether such Trade Rights are registered or unregistered,
except where the failure to own, possess or license the same would not
have a material adverse effect on the Company and its subsidiaries taken
as a whole. None of the Company or its subsidiaries have received any
notice of infringement, misappropriation or conflict from any third
party as to the material Trade Rights which has not yet been resolved or
disposed of and none of the Company or its subsidiaries have infringed,
misappropriated or otherwise conflicted with the Trade Rights of any
third parties, which infringement, misappropriation or conflict would
have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and its subsidiaries
taken as a whole.
(u) There are no agreements, contracts, leases or other documents
of a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or by the Regulations that have not
been described or referred to therein or filed as required.
(v) The Company and its subsidiaries have filed all necessary
federal, state and Puerto Rico income and franchise tax returns required
to be filed through the date hereof and have paid all taxes when due,
except where the failure to file or pay such taxes, in the aggregate,
could not reasonably be expected to have a material adverse effect on
the Company and its subsidiaries taken as a whole and there is no tax
deficiency that has been, or to the knowledge of the Company might be,
asserted against the Company and its subsidiaries, or their respective
properties or assets, that would have a material adverse effect on the
Company's ability to perform its obligations under this Agreement, the
Company's condition (financial or other) or the results of operations of
the Company or its subsidiaries taken as a whole.
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls that, taken as a whole, are sufficient to
provide reasonable assurance that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any of its subsidiaries has
been refused any insurance coverage sought or applied for; and neither
the Company nor any of its subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business.
(y) No labor disputes with the employees of the Company or its
subsidiaries exist or are threatened or imminent that could result in a
material adverse change that would affect the Company's ability to
perform its obligations under this Agreement, the Company's condition
-6-
(financial or other) or the results of operations of the Company or its
subsidiaries taken as a whole, except as described in the Prospectus.
(z) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida), relating to
doing business with the Government of Cuba or any person or affiliate
located in Cuba.
B. Each Selling Stockholder, severally and not jointly,
represents and warrants to, and agrees with, each of the several Underwriters
that:
(a) Such Selling Stockholder has (i) caused a certificate or
certificates for the number of Shares to be sold by such Selling
Stockholder hereunder to be delivered to the Company, endorsed in blank
or with blank stock powers duly executed, with signatures appropriately
guaranteed, such certificate or certificates to be held in the custody
of the Company, in accordance with the terms of a custody agreement in
the form heretofore delivered to you, for delivery pursuant to the
provisions hereof on the Closing Date and the Additional Closing Date,
if any, and (ii) granted an irrevocable power of attorney to the
Company, as such Selling Stockholder's attorney-in-fact (the
"Attorney-In-Fact") in the form heretofore delivered to you (the custody
agreement, together with the irrevocable power of attorney, executed by
such Selling Stockholder being hereinafter collectively referred to as
the "Custody Agreement").
(b) The execution, delivery and performance of this Agreement and
the Custody Agreement by or on behalf of such Selling Stockholder and
the consummation of the transactions contemplated hereby and thereby
will not (i) violate or conflict with the charter or bylaws or
applicable trust agreement or partnership agreement of such Selling
Stockholder if it is a corporation, trust or a partnership, (ii)
conflict with or result in the breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) or require consent under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of such Selling Stockholder pursuant to the
terms of any material agreement, trust agreement, partnership agreement,
instrument, franchise, license or permit to which such Selling
Stockholder is a party or by which such Selling Stockholder or any of
such Selling Stockholder's property or assets may be bound, or (iii)
violate or conflict with any material judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over such Selling
Stockholder or such Selling Stockholder's properties or assets.
(c) Such Selling Stockholder has, and at the time of delivery of
the Shares to be sold by such Selling Stockholder, such Selling
Stockholder will have, full legal right, power, authority and capacity,
and, except as required under the Act and state securities and Blue Sky
laws, all necessary consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits of and from
all public, regulatory or governmental agencies and bodies, as are
required for the execution, delivery and performance of this Agreement
and the Custody Agreement and the consummation of the transactions
contemplated hereby and thereby, including the sale, assignment,
transfer and delivery of the Shares to be sold, assigned, transferred
and delivered by such Selling Stockholder hereunder.
(d) Each of this Agreement and the Custody Agreement has been duly
authorized (if applicable) and duly and validly executed and delivered
by such Selling Stockholder and is a valid and binding obligation of
such Selling Stockholder, enforceable against such Selling Stockholder
-7-
in accordance with its terms, except to the extent that rights to
indemnity hereunder may be limited by applicable federal or state
securities laws or the public policy underlying such laws and except to
the extent the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by equitable principles.
(e) Such Selling Stockholder has good, valid and marketable title
to the Shares to be sold by such Selling Stockholder pursuant to this
Agreement, free and clear of all liens, pledges, encumbrances, claims,
security interests, stockholders' agreements, voting trusts, other
defects in title whatsoever and restrictions on transfer (other than
those restrictions on transfer imposed by the Act and the securities or
Blue Sky laws of certain jurisdictions), with full power to sell and
deliver such Shares hereunder, and, upon the delivery of and payment for
such Shares as herein contemplated, each of the Underwriters will
acquire good, valid and marketable title to the Shares purchased by it
from such Selling Stockholder, free and clear of all liens, pledges,
encumbrances, claims, security interests, stockholders agreements,
voting trusts, other defects in title whatsoever and restrictions on
transfer (other than those restrictions on transfer imposed by the Act
and the securities or Blue Sky laws of certain jurisdictions).
(f) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which constituted or which was
designed to constitute or which might be reasonably expected to cause or
result in stabilization or manipulation of the price of the shares of
Common Stock.
(g) When the Registration Statement shall become effective, when
any amendment to the Registration Statement becomes effective, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) of
the Regulations, and when any amendment of or supplement to the
Prospectus is filed with the Commission and at the Closing Date and the
Additional Closing Date, if any, such parts of the Registration
Statement and the Prospectus and any amendments thereof and supplements
thereto that relate to such Selling Stockholder and are based upon
information furnished to the Company by or on behalf of such Selling
Stockholder expressly for use therein will not contain an untrue
statement of a material fact and will not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were
made, not misleading.
(h) The share ownership shown in the Prospectus under the caption
"Selling Stockholders" with respect to such Selling Stockholder is
correct.
(i) Except as described in the Registration Statement and the
Prospectus, or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, such Selling Stockholder (i) does not have any
preemptive right, co-sale right or right of first refusal or other
similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Stockholders to the Underwriters
pursuant to this Agreement, and (ii) does not own any warrants, options
or similar rights to acquire, and does not have any right or arrangement
to acquire, any capital stock, rights, warrants, options or other
securities from the Company.
(j) Except as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, such Selling Stockholder does not possess any
registration rights with respect to any securities of the Company.
-8-
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company and the Selling Stockholders, severally and not
jointly, agree to sell to the Underwriters and the Underwriters, severally
and not jointly, agree to purchase from the Company and the Selling
Stockholders, at a purchase price per share of $________, the number of Firm
Shares set forth opposite the respective names of the Underwriters in
Schedule I hereto plus any additional number of Shares which such Underwriter
may become obligated to purchase pursuant to the provisions of Section 9
hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the office of Bear,
Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by you and the Company, at 10:00 A.M. on
the third or fourth business day (as permitted under Rule 15c6-1 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (unless
postponed in accordance with the provisions of Section 9 hereof) following
the date of the effectiveness of the Registration Statement (or, if the
Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth business day (as permitted under Rule 15c6-1 of the Exchange Act)
after the determination of the initial public offering price of the Shares),
or such other time not later than ten business days after such date as shall
be agreed upon by you and the Company (such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made to
the Company and to the Selling Stockholders by wire transfers of same day
funds, against delivery to you for the respective accounts of the
Underwriters of certificates for the Firm Shares to be purchased by them.
Certificates for the Firm Shares shall be registered in such name or names
and in such authorized denominations as you may request in writing at least
two full business days prior to the Closing Date. The Company will permit
you to examine and package such certificates for delivery at least one full
business day prior to the Closing Date.
(c) In addition, the Selling Stockholders, severally and not
jointly, hereby grant to the Underwriters the option to purchase, severally
and not jointly, up to 435,000 Additional Shares at the same purchase price
per share to be paid by the Underwriters to the Company for the Firm Shares
as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option
may be exercised at any time (but not more than once), in whole or in part,
on or before the thirtieth day following the date of the Prospectus, by
written notice by you to the Company and the Selling Stockholders. Such
notice shall set forth the aggregate number of Additional Shares as to which
the option is being exercised and the date and time, as reasonably determined
by you, when the Additional Shares are to be delivered (such date and time
being herein sometimes referred to as the "Additional Closing Date");
PROVIDED, HOWEVER, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date
on which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be
registered in such name or names and in such authorized denominations as you
may request in writing at least two full business days prior to the
Additional Closing Date. The Company will permit you to examine and package
such certificates for delivery at least one full business day prior to the
Additional Closing Date.
If the Underwriters exercise such option in part, the Additional
Shares shall be sold with each Selling Stockholder selling shares in the
proportion that the number of shares of such Selling Stockholder subject to
such option bears to the total number of shares subject to such option
granted by the Selling Stockholders. The number of Additional Shares to be
sold to each Underwriter shall be the
-9-
number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number increased as
set forth in Section 9 hereof) bears to the aggregate number of Firm Shares
being purchased, subject, however, to such adjustments to eliminate any
fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made to the Selling
Stockholders by wire transfers of same day funds at the office of Bear,
Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
location as may be mutually acceptable, upon delivery of the certificates for
the Additional Shares to you for the respective accounts of the Underwriters.
3. OFFERING. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms set forth in the Prospectus.
4. COVENANTS.
A. The Company covenants and agrees with the Underwriters that:
(a) If the Registration Statement has not yet been declared
effective the Company will use its reasonable best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A or Rule 434 is used or the filing
of the Prospectus or supplement to the Prospectus is otherwise required
under Rule 424(b) or Rule 434, the Company will file the Prospectus
(properly completed) or such supplement to the Prospectus pursuant to
Rule 424(b) or Rule 434 within the prescribed time period and will
provide evidence satisfactory to you of such timely filing. If the
Company elects to rely on Rule 434, the Company will prepare and file a
term sheet that complies with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iii) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any
proceedings therefor, (iv) of the receipt of any comments from the
Commission, and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If the Commission shall propose or enter a
stop order at any time, the Company will make every reasonable effort to
prevent the issuance of any such stop order and, if issued, to obtain
the lifting of such order as soon as possible. The Company will not file
any amendment to the Registration Statement or any amendment of or
supplement to the Prospectus (including the prospectus required to be
filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration
Statement to which you shall reasonably object in writing after being
timely furnished in advance a copy thereof. The Company will notify you
of the mailing or the delivery to the Commission for filing of any
amendment of or supplement to the Registration Statement or the
Prospectus as soon as reasonably practicable after such filing.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as
a result of which the Prospectus as then amended
-10-
or supplemented includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to
comply with the Act or the Regulations, the Company will notify you
promptly and prepare and file with the Commission an appropriate
amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission and will use its
reasonable best efforts to have any amendment to the Registration
Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you two signed copies of
the Registration Statement, including exhibits and all amendments
thereto, and the Company will promptly deliver to each of the
Underwriters such number of copies of any preliminary prospectus, the
Prospectus, the Registration Statement, and all amendments of and
supplements to such documents, if any, as you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in
effect for so long as required for the distribution thereof; except that
in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation or to execute a general consent to
service of process.
(e) The Company will make generally available (within the meaning
of Section 11(a) of the Act) to its security holders and to you as soon
as practicable, but not later than 45 days after the end of its fiscal
quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying
with the provisions of Rule 158 of the Regulations) covering a period of
at least twelve consecutive months beginning after the effective date of
the Registration Statement.
(f) During the period of 90 days from the date of the Prospectus,
the Company will not, without the prior written consent of Bear, Xxxxxxx
& Co. Inc. ("Bear Xxxxxxx"), issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, directly or
indirectly, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock), and the Company will
obtain the undertaking of each of its officers and directors and such of
its stockholders as have been heretofore designated by you and listed on
Schedule III attached hereto (the "Designated Stockholders") not to
engage, without your prior written consent, in any of the aforementioned
transactions on their own behalf, other than (i) the Company's sale of
Shares hereunder, (ii) the Company's issuance of Common Stock upon the
exercise of presently outstanding stock options, (iii) grants of options
to purchase Common Stock or awards of restricted stock pursuant to
option and restricted stock plans in existence on the date hereof,
provided such options are not exercisable within such 90-day period, and
(iv) the pledge of shares of Common Stock by any such officers,
directors or stockholders, provided that the pledgee agrees in writing
to be bound by the same restrictions in the event of foreclosure on the
pledged shares.
(g) Registration rights with respect to Common Stock that have
been granted by the Company to its directors, officers, or Designated
Stockholders are not exercisable prior to April 22, 1997 unless the
public market price of the Common Stock at the time of such exercise is
at least $16.80 per share.
-11-
(h) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i)
all reports to its stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with
the Commission or any national securities exchange.
(i) The Company will apply the net proceeds from the sale of the
Shares in the manner described in "Use of Proceeds" in the Prospectus.
(j) The Company will not, within one year from the date of this
Prospectus, take, directly or indirectly, any action designed to, or
which might reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or otherwise in violation of
applicable securities laws.
B. Each Selling Stockholder covenants and agrees with the several
Underwriters that:
(a) During a period of 90 days from the effective date of the
Registration Statement, no Selling Stockholder (including such Selling
Stockholder's successors, assigns, heirs and legatees) will, without the
prior written consent of Bear Xxxxxxx, sell, offer or agree to sell, or
otherwise dispose of, directly or indirectly, any Common Stock other
than in accordance with the terms of this Agreement. Except as otherwise
expressly provided in the immediately preceding sentence, such Selling
Stockholder agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
shares of Common Stock held by such Selling Stockholder during such
90-day period without your prior written consent.
(b) In the event that the Underwriters exercise their option to
purchase the Additional Shares, such Selling Stockholder will advise the
Attorney-in-Fact before the Additional Closing Date if any statement to
be made on behalf of such Selling Stockholder in the certificate
contemplated by Section 6(f) would be inaccurate if made as of the
Additional Closing Date.
(c) Such Selling Stockholder will cooperate with the Company in
endeavoring to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and will make such applications, file
such document and furnish such information as may be reasonably required
for that purpose.
5. PAYMENT OF EXPENSES. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the
Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders
hereunder, including those in connection with (i) preparing, printing,
duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any preliminary prospectus, the Prospectus and any amendments or supplements
thereto (including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this
Agreement and the Agreement Among Underwriters) and all other documents
related to the public offering of the Shares (including those supplied to the
Underwriters in quantities as hereinabove stated), (ii) the issuance,
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the qualification of the
Shares under state or foreign securities or Blue Sky laws, including the
costs of printing and mailing a preliminary and final "Blue Sky Survey" and
the fees of counsel for the Underwriters and such counsel's disbursements in
relation thereto, (iv) quotation of the Shares on the Nasdaq National Market,
(v) filing fees of the Commission and the NASD, (vi) the cost of printing
certificates representing the Shares and (vii) the cost and charges of any
transfer agent or
-12-
registrar; provided, however, that each Selling Stockholder will pay any
transfer or other taxes payable with respect to the sale of its Shares
hereunder.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein contained, as of the date hereof and as of the Closing Date (or in the
case of the Additional Shares, as of the Additional Closing Date), to the
absence from any certificates, opinions, written statements or letters
furnished to you or to Gardere & Xxxxx, L.L.P., ("Underwriters' Counsel")
pursuant to this Section 6 of any misstatement or omission, 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 not
later than 5:30 P.M., New York time, on the date of this Agreement, or at
such later time and date as shall have been consented to in writing by you;
if the Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus or a supplement to the Prospectus shall have been
filed with the Commission in a timely fashion in accordance with Section 4(a)
hereof; and, at or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the opinion of
Xxxxxx & Xxxx, L.L.P., counsel for the Company, dated the Closing Date
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation or partnership, as
the case may be, in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Company and its subsidiaries
is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a
material adverse effect on the Company and its subsidiaries taken as a
whole. Each of the Company and its subsidiaries has all requisite
corporate authority to own, lease and license its respective properties
and conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus. All of the issued and
outstanding capital stock of each subsidiary of the Company has been
duly and validly issued and is fully paid and nonassessable, was not
issued in violation of preemptive rights under the Delaware General
Corporation Law, the laws of Puerto Rico, the certificates of
incorporation or the bylaws of each of the Company's subsidiaries or, to
such counsel's knowledge, any other agreement or instrument and, to such
counsel's knowledge, is owned directly or indirectly by the Company,
free and clear of any material lien, encumbrance, claim, security
interest, restriction on transfer, shareholders' agreement, voting trust
or other defect of title whatsoever, except those created or imposed
under the Senior Credit Facility which would have a material adverse
effect on the Company.
(ii) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock, including without limitation the Firm Shares and
Additional Shares, if any, sold by the Selling Stockholders hereunder,
are duly and validly authorized and issued, are fully paid and
nonassessable and were
-13-
not issued in violation of or subject to any preemptive rights. The
Firm Shares to be delivered by the Company on the Closing Date have been
duly and validly authorized and, when delivered by the Company in
accordance with this Agreement, will be duly and validly issued, fully
paid and nonassessable and will not have been issued in violation of or
subject to any preemptive rights under the Delaware General Corporation
Law, the Company's certificate of incorporation or its bylaws or, to
such counsel's knowledge, any other agreement or instrument. The Common
Stock, the Firm Shares and the Additional Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(iii) The form of certificates for the Shares complies in
all material respects with the requirements of the Delaware General
Corporation Law and the Company's bylaws.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) To the knowledge of such counsel, there is no litigation
or governmental or other action, suit, proceeding or investigation
before any court or before or by any public, regulatory or governmental
agency or body pending, or, to such counsel's knowledge, threatened
against, or involving the properties or business of, the Company or its
subsidiaries which is of a character required to be disclosed in the
Registration Statement and the Prospectus which has not been properly
disclosed therein.
(vi) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
by the Company and its subsidiaries do not (A) conflict with or result
in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any material agreement,
instrument, franchise, license or permit known to such counsel to which
the Company or any of its subsidiaries is a party or by which any of
such corporations or their respective properties or assets may be bound,
except for the creation or imposition of any liens, charges or
encumbrances pursuant to the Senior Credit Facility as disclosed in the
Prospectus, or (B) violate or conflict with any provision of the
certificate of incorporation or bylaws of the Company or any of its
subsidiaries, or, to the knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties
or assets. To the knowledge of such counsel, no consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental, or regulatory
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (1)
such as may be required by the NASD or under state securities or Blue
Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters (as to which such counsel need express no opinion)
and (2) such as have been made or obtained under the Act.
(vii) The Registration Statement and the Prospectus and
any amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which no opinion
-14-
need be rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(viii) The Registration Statement is effective under the
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereof has been issued and no proceedings therefor have been
initiated or threatened by the Commission and all filings required by
Rule 424(b) of the Regulations have been made within the time period
required by such Rule 424(b).
(ix) The descriptions in the Registration Statement and the
Prospectus of the provisions of the certificate of incorporation and
bylaws of the Company accurately reflect, in all material respects, such
provisions.
(x) The descriptions in the Registration Statement and the
Prospectus, as regards any part of the Registration Statement or the
Prospectus not purporting to be made on authority of an expert, of the
provisions of statutes, regulations, government proceedings, agreements
and contracts, if any, accurately reflect, in all material respects,
such provisions.
(xi) To the knowledge of such counsel, neither the Company nor
any of its subsidiaries is in violation of its certificate of
incorporation or bylaws and neither the Company nor any of its
subsidiaries is in default under (and no event has occurred which with
notice, lapse of time or both would constitute a breach of or a default
under) any agreement, license, mortgage, deed of trust, loan or credit
agreement, indenture or instrument filed as an exhibit to the
Registration Statement, which violation or default would have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(xii) To the knowledge of such counsel after due inquiry,
there are no agreements, contracts, leases or documents of a character
required to be described or referred to in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration
Statement by the Act or by the Regulations that are not described or
referred to therein or filed as required.
(xiii) Neither the Company nor any of its subsidiaries is
an "investment company" or a company "controlled" by an "investment
company"," within the meaning of the Investment Company Act of 1940 and,
upon its receipts of any proceeds from the sale of the Shares, will not
become or be deemed to be an "investment company" thereunder.
(xiv) In addition, such opinion shall also contain a
statement that such counsel has participated in conferences with
officers and representatives of the Company, representatives of the
independent public accountants for the Company and the Underwriters at
which the contents and the Prospectus and related matters were
discussed, have participated in the preparation of the Registration
Statement and the Prospectus and, although such counsel is not passing
upon, and does not assume responsibility for and has not verified, the
accuracy, completeness and fairness of, the statements contained in the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, on the basis of the foregoing and without
independent check or verification, no facts have come to the attention
of such counsel which would lead such counsel to believe that either the
Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A(b) and Rule 434(d), if
applicable), or any amendment thereof made prior to the
-15-
Closing Date as of the date of such amendment, contained an untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date
as of the date of such amendment or supplement) and as of the Closing
Date contained as of the date thereof or contains at the Closing Date an
untrue statement of a material fact or omitted as of the date thereof or
omits at the Closing Date to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial
and statistical data included in the Registration Statement and the
Prospectus).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to
Underwriters' Counsel, familiar with the applicable laws, provided that
copies of any such opinions shall be delivered to Underwriters' Counsel; and
(B) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing of the
Company and its subsidiaries, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The opinion of
such counsel for the Company shall state that the opinion of any such other
counsel is in form satisfactory to such counsel for the Company and, in their
opinion, you and they are entitled in relying thereon.
(c) At the Closing Date and Additional Closing Date, if any, you
shall have received the favorable opinion of ______________________________,
counsel for the Selling Stockholders, dated the Closing Date or the
Additional Closing Date, as the case may be, addressed to the Underwriters
and in form and substance satisfactory to Underwriters' Counsel, to the
effect that:
(i) This Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of each Selling Stockholder.
(ii) To the knowledge of such counsel, each Selling
Stockholder that is not a natural person has the requisite power
and authority to enter into and to perform its obligations under
this Agreement and the Custody Agreement and to sell, transfer,
assign and deliver the Shares to be sold by such Selling
Stockholder pursuant hereto.
(iii) The Shares to be sold by the Selling Stockholders to
the Underwriters pursuant to this Agreement have been duly and
validly authorized and issued, are fully paid and nonassessable.
(iv) To the knowledge of such counsel, no consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits are required for the execution, delivery and
performance of this Agreement and the Custody Agreement, and the
consummation of the transactions contemplated hereby by any Selling
Stockholder, except for (1) such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to
-16-
which such counsel need express no opinion), and (2) such as have
been made or obtained under the Act.
(v) To the knowledge of such counsel, upon the delivery of
and payment for the Shares to be sold by the Selling Stockholders
pursuant to this Agreement as herein contemplated, and assuming
each Underwriter takes delivery without knowledge of any adverse
claims, such Underwriter will be a bona fide purchaser with respect
to such shares within the meaning of Article VIII of the UCC and
will acquire all rights of such Selling Stockholder in such Shares,
free and clear of all adverse claims.
In rendering its opinion hereunder, such counsel may rely: (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to
Underwriters' Counsel and familiar with the applicable laws and (B) as to
matters of fact, to the extent they deem proper, on certificates of the
Selling Stockholders, provided that copies of any such certificates shall be
delivered to Underwriters' Counsel. The opinion of such counsel for the
Selling Stockholders shall state that the opinion of any such other counsel
is in form satisfactory to such counsel for the Selling Stockholders and, in
their opinion, you and they are justified in relying thereon. A copy of the
opinion of any such other counsel shall be attached to the opinion of such
counsel for the Selling Stockholders.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory
in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale
of the Firm Shares by the Company, the Registration Statement and the
Prospectus and such other related matters as you may reasonably require, and
the Company and the Selling Stockholders shall have furnished to
Underwriters' Counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as
of the Closing Date the representations and warranties of the Company set
forth in Section 1 hereof are accurate and (iii) as of the Closing Date the
obligations of the Company to be performed hereunder on or prior thereto have
been duly performed.
(f) At the Closing Date and the Additional Closing Date, if any,
you shall have received a certificate executed by the Attorney-in-Fact on
behalf of the Selling Stockholders, dated the Closing Date or the Additional
Closing Date, as the case may be, to the effect that the representations and
warranties of such Selling Stockholders set forth in Section 1 hereof are
accurate, and that as of the Closing Date or the Additional Closing Date, as
the case may be, the obligations of such Selling Stockholders to be performed
hereunder on or prior thereto have been duly performed.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter from Deloitte & Touche LLP,
independent public accountants for the Company, dated, respectively, as of
the date of this Agreement and as of the Closing Date, addressed to the
Underwriters and in form and substance satisfactory to you, to the effect
that:
-17-
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Act and the Regulations
and stating that the answer to Item 10 of the Registration Statement is
correct insofar as it relates to them.
(ii) In their opinion, the financial statements and schedules
of the Company and the pre-acquisition companies of the Combined
Entities included in the Registration Statement and the Prospectus and
covered by their opinion therein comply as to form in all material
respects with the applicable accounting requirements of the Act and the
applicable published rules and regulations of the Commission thereunder.
(iii) On the basis of procedures consisting of a reading of
the latest available monthly consolidated financial statements of the
Company and its subsidiaries, reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company and
its subsidiaries and the committees of such boards subsequent to
December 31, 1995, inquiries of officers and other employees of the
Company and its subsidiaries who have responsibility for financial and
accounting matters of the Company and its subsidiaries with respect to
transactions and events subsequent to December 31, 1995, and other
specified procedures and inquiries to a date not more than five days
prior to the date of such letter, nothing has come to their attention
that would cause them to believe that: (A) with respect to the period
subsequent to December 31, 1995, there were, as of the date of the most
recent available monthly consolidated financial statements of the
Company and its subsidiaries, and as of a specified date not more than
five days prior to the date of such letter, any changes in the capital
stock, increases in long-term indebtedness or decreases in consolidated
net current assets or stockholders' equity of the Company or its
subsidiaries, in each case as compared with the amounts shown in the
most recent balance sheet presented in the Registration Statement and
the Prospectus, except for changes or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; (B) that during the period from
January 1, 1996 to the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries,
and to a specified date not more than five days prior to the date of
such letter, there was any decrease, as compared with the corresponding
period in the prior fiscal year, in total net sales, total income before
income taxes or net income, except for decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; and (C) the unaudited pro forma
financial information of the Company included in the Registration
Statement and Prospectus do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation
S-X under the Act and the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such pro forma
financial information.
(iv) They have compared specific dollar amounts, numbers of
shares, percentages of net sales and earnings, and other financial
information pertaining to the Company and its subsidiaries set forth in
the Registration Statement and the Prospectus, which have been specified
by you prior to the date of this Agreement, to the extent that such
amounts, numbers, percentages and information may be derived from the
general accounting and financial records of the Company and its
subsidiaries, or from schedules furnished by the Company, and excluding
any questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries
and other appropriate procedures specified by you set forth in such
letter, and found them to be in agreement.
-18-
(h) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from Deloitte & Touche LLP,
independent public accountants for Swiss Dairy, a Corporation ("Swiss Dairy")
as of the date of this Agreement and as of the Closing Date addressed to the
Underwriters and in form and substance satisfactory to you, to the effect
that:
(i) They are independent certified accountants with respect
to Swiss Dairy, within the meaning of the Act and the Regulations and stating
that the answer to Item 10 of the Registration Statement is correct insofar
as it relates to them.
(ii) In their opinion, the financial statements and schedules
of Swiss Dairy included in the Registration Statement and the Prospectus and
covered by their opinion therein comply as to form in all material respects
with the applicable accounting requirements of the Act and the applicable
published rules and regulations of the Commission thereunder.
(i) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from KPMG Peat Marwick, LLP,
independent public accountants for Xxxxxxx & Compania, Inc. ("Xxxxxxx"), as
of the date of this Agreement and as of the Closing Date addressed to the
Underwriters and in form and substance satisfactory to you, to the effect
that:
(i) They are independent certified accountants with respect
to Xxxxxxx within the meaning of the Act and the Regulations and stating that
the answer to Item 10 of the Registration Statement is correct insofar as it
relates to them.
(ii) In their opinion, the financial statements and schedules
of Xxxxxxx included in the Registration Statement and the Prospectus and
covered by their opinion therein comply as to form in all material respects
with the applicable accounting requirements of the Act and the applicable
published rules and regulations of the Commission thereunder.
(j) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from Xxxxxxx, Xxxxxx & Co.,
independent public accountants for Model Dairy, Inc. ("Model Dairy"), as of
the date of this Agreement and as of the Closing Date addressed to the
Underwriters and in form and substance satisfactory to you, to the effect
that:
(i) They are independent certified accountants with respect
to Model Dairy, within the meaning of the Act and the Regulations and stating
that the answer to Item 10 of the Registration Statement is correct insofar
as it relates to them.
(ii) In their opinion, the financial statements and schedules
of Model Dairy included in the Registration Statement and the Prospectus and
covered by their opinion therein comply as to form in all material respects
with the applicable accounting requirements of the Act and the applicable
published rules and regulations of the Commission thereunder.
(k) Prior to the Closing Date and the Additional Closing Date, if
any, the Company and the Selling Stockholders shall have furnished to you
such further information, certificates and documents as you may reasonably
request.
(l) You shall have received from each person who is a director or
officer of the Company or a Designated Stockholder an agreement to the effect
that such person will not, directly or
-19-
indirectly, without the prior written consent of Bear Xxxxxxx, offer, sell,
offer or agree to sell, grant any option to purchase or otherwise dispose (or
announce any offer, sale, grant of an option to purchase or other
disposition) of any shares of Common Stock (or any securities convertible
into, exercisable for or exchangeable or exercisable for shares of Common
Stock) for a period of 90 days after the date of the Prospectus, other than
the pledge of shares of Common Stock by any such director, officer or
Designated Stockholder, provided that the pledgee agrees in writing to be
bound by such restrictions in the event of foreclosure on the pledged shares.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company and the Selling
Stockholders in writing, or by telephone, telex or telegraph, confirmed in
writing.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several,
to which they or any of them may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, as originally filed or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any supplement
thereto or amendment thereof, 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; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent
but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of any Underwriter through you expressly for use therein; and
PROVIDED FURTHER, that the indemnification rights in this Section 7(a) with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, liability, claim, damage or expense arising from
the sale of Shares by such Underwriter to any person if a copy of the
Prospectus, as amended or supplemented, shall not have been delivered or sent
to such person within the time required by the Act, and the untrue statement
or alleged untrue statement or omission or alleged omission of a material
fact contained in such preliminary prospectus was corrected in the
Prospectus, as amended or supplemented, provided that the Company delivered
the Prospectus, as amended or supplemented, to the several Underwriters on a
timely basis to permit such delivery or sending. This indemnity agreement
will be in addition to any liability which the Company may otherwise have
including under this Agreement. The Company will not, without the prior
written consent of Underwriters purchasing more than 50% of the Firm Shares,
settle or compromise or consent to the entry of any judgment in any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Underwriter or
any person who
-20-
controls such Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling person
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Selling Stockholder, severally and not jointly (in the
proportion that the number of Shares sold by such Selling Stockholder bears
to the total number of Shares sold pursuant hereto), agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, against any losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related preliminary prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to such Selling Stockholder furnished to the Company by such Selling
Stockholder, directly or through such Selling Stockholder's representative,
expressly for use therein. This indemnity will be in addition to any
liability which any such Selling Stockholder may otherwise have, including
under this Agreement. In no case shall any Selling Stockholder be liable or
responsible for any amount that exceeds the net proceeds actually received by
it from the sale of its Shares pursuant to this Agreement.
(c) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the
Company, each Selling Stockholder, each of the officers of the Company who
shall have signed the Registration Statement, and each other person, if any,
who controls the Company or any Sellling Stockholder within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any
losses, liabilities, claims, damages and expenses whatsoever (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred
in investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), jointly or several, to which they or
any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through you expressly for use
therein. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The
Underwriters will not, without the prior written consent of the Company
settle or compromise or consent to the entry of any judgment in any pending
or threatened
-21-
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Company, the Selling Stockholders, or
each of the directors of the Company, each of the officers of the Company who
shall have signed the Registration Statement or each person who controls the
Company or any Selling Stockholder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes
an unconditional release of the Company, the Selling Stockholders, each such
director, each such officer and each such controlling person from all
liability arising out of such claim, action, suit or proceeding. The Company
and each Selling Stockholder acknowledge that the statements set forth in the
last paragraph of the cover page and in the nine paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the
Registration Statement as originally filed or in any amendment thereof, any
related preliminary prospectus or the Prospectus or in any amendment thereof
or supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
it from any liability which it may have under this Section 7, except to the
extent that the indemnifying party has been prejudiced in any material
respect by such failure or from any liability which it may have otherwise).
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 therein, and to the extent it may elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action (in which case such indemnifying party shall pay such fees and
expenses), (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to
one or all of the indemnifying parties (in which case the indemnifying
parties shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the indemnifying parties. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof
is for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company,
the Selling Stockholders and the Underwriters shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but
after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company and any Selling Stockholder any contribution
received by the Company or such Selling Stockholder from persons, other than
the Underwriters, who may also be liable for contribution, including persons
who control the Company or any Selling Stockholder
-22-
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, officers of the Company who signed the Registration Statement and
directors of the Company) to which the Company, one or more of the Selling
Stockholders and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits received by
the Company, the Selling Stockholders and the Underwriters from the offering
of the Shares or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportion as
is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company, the Selling Stockholders and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed to be
in the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and (y) the total proceeds from the offering (net of
underwriting discounts and commissions, but before deducting expenses)
received by the Selling Stockholders and (z) the underwriting discounts and
commissions received by the Underwriters, respectively, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company, the Selling Stockholders and of the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Selling Stockholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8, (i) in no case shall any Underwriter be liable or responsible for
any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) in no case shall any
Selling Stockholder be liable or responsible for any amount that exceeds the
proceeds actually received by him from the sale of his Shares pursuant to
this Agreement, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, each person, if any, who controls a Selling Stockholder
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act shall have the same rights to contribution as such Selling Stockholder,
and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i), (ii) and (iii) of this Section
8. Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party
or parties under this Section 8, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 8 or
otherwise. No party shall be liable for contribution with respect to any
action or claim settled without its consent; PROVIDED, HOWEVER, that such
consent was not unreasonably withheld.
9. Default by an Underwriter.
-23-
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and
if the Firm Shares or Additional Shares with respect to which such default
relates do not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the number
of Firm Shares or Additional Shares, respectively, such Firm Shares or
Additional Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase such
Firm Shares or Additional Shares, as the case may be, to which such default
relates on the terms contained herein. In the event that within 5 calendar
days after such a default you do not arrange for the purchase of the Firm
Shares or Additional Shares, as the case may be, to which such default
relates as provided in this Section 9, this Agreement or, in the case of a
default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the
Additional Shares shall thereupon terminate, without liability on the part of
the Selling Stockholders with respect thereto (except in each case as
provided in Sections 5, 7(a) and 8 hereof) or the Underwriters, but nothing
in this Agreement shall relieve a defaulting Underwriter or Underwriters of
its or their liability, if any, to the other Underwriters, the Company and
the Selling Stockholders for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as
aforesaid, you or the Company shall have the right to postpone the Closing
Date or Additional Closing Date, as the case may be, for a period, not
exceeding five business days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus or in any
other documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus
which, in the opinion of Underwriters' Counsel, may thereby be made necessary
or advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements of the Underwriters, the Selling
Stockholders and the Company contained in this Agreement, including the
agreements contained in Section 5, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling person thereof or
by or on behalf of the Company, any of its officers and directors or any
Selling Stockholder or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in
Sections 5, 7, 8 and 11(d) hereof shall survive the termination of this
Agreement, including termination pursuant to Section 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective at such time after
notification of the effectiveness of the Registration Statement as you, the
Company and the Selling Stockholders shall agree
-24-
upon the purchase price per Share. If the purchase price per Share has not
been agreed upon prior to 5:00 p.m., New York time, on the seventh full
business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company,
the Selling Stockholders or the Underwriters except as herein expressly
provided. Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by notifying you and the Selling Stockholders or by
joint action only of the Selling Stockholders directly or the
Attorney-in-Fact on behalf of all the Selling Stockholders by notifying the
Company and you or by you by notifying the Company and the Selling
Stockholders. Notwithstanding the foregoing, the provisions of Sections 1,
5, 7 and 8 hereof shall survive termination pursuant to this Section 11.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing
Date, as the case may be, by notice to the Company and the Selling
Stockholders from you, if (i) the Company shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed hereunder; or (ii) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or
securities in general; or (iii) trading in the Common Stock shall have been
suspended or materially limited on the Nasdaq National Market, or minimum or
maximum prices shall have been fixed or maximum ranges for prices shall have
been required on the Nasdaq National Market, the listing of the Common Stock
on the Nasdaq National Market shall have been terminated, or the Company
shall have been notified that such suspension or termination is being
contemplated; or (iv) trading on the New York Stock Exchange, American Stock
Exchange or Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on such
exchanges by such exchanges or by order of the Commission or any other
regulatory body or governmental authority having jurisdiction; or (v) a
banking moratorium has been declared by a state or federal authority or if
any new restriction materially adversely affecting the distribution of the
Firm Shares or the Additional Shares, as the case may be, shall have become
effective; or (vi) (A) the United States becomes engaged in hostilities
(other than those hostilities, if any, in which the United States may be
engaged on the date of this Agreement) or there is an escalation of
hostilities involving the United States or there is a declaration of a
national emergency or war by the United States or (B) there shall have been
material and adverse change in political, financial or economic conditions,
and if the effect of any such event in (A) or (B) as in your judgment makes
it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on
the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be
by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Sections 9(b) or 11(b)(ii)-(vi)
hereof), or if the sale of the Shares provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth herein
is not satisfied or because of any refusal, inability or failure on the part
of the Company or any Selling Stockholder to perform any agreement herein or
comply with any provision hereof, the Company and the Selling Stockholders
will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
-25-
12. NOTICE. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance; if sent
to the Company, shall be mailed, delivered, or telegraphed and confirmed in
writing to the Company, 0000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, Attention: Chief Executive Officer; if sent to a Selling
Stockholder, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to _________________________________________________
____________________________________________.
13. PARTIES. You represent that you are authorized to act on behalf of
the Underwriters, and the Company and the Selling Stockholders shall be
entitled to act and rely on any request, notice, consent, waiver or agreement
purportedly given on behalf of the Underwriters when the same shall have been
given by you on such behalf. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Underwriters, the Selling
Stockholders and the Company and the controlling persons, directors,
officers, employees and agents referred to in Sections 7 and 8, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its
capacity as such, of Shares from any of the Underwriters.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
-26-
If the foregoing correctly sets forth the understanding between you, the
Company and the Selling Stockholders, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
SUIZA FOODS CORPORATION
By:
-----------------------------------------
Xxxxx X. Xxxxxx, Chief Executive Officer
SELLING STOCKHOLDERS
--------------------------------------------
--------------------------------------------
--------------------------------------------
By:
-----------------------------------------
_____________________, Attorney-in-Fact
for the Selling Stockholders named in
in Schedule II hereto
Accepted as of the date first above written.
BEAR, XXXXXXX & CO. INC.
X.X. XXXXXXX & SONS, INC.
By: Bear, Xxxxxxx & Co. Inc.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
-27-
SCHEDULE I
Number of
Shares to be
Name of Underwriter be Purchased
------------------- -------------
Bear, Xxxxxxx & Co. Inc. . . . . . . . . . . . . .
X.X. Xxxxxxx & Sons, Inc. . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . 2,900,000
---------
---------
-28-
SCHEDULE II
SELLING STOCKHOLDERS
--------------------
Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxx
BP Puerto Rico, Inc.
Canaan Capital Limited Partnership
Canaan Capital Offshore Limited Partnerhsip C.V.
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxx
Xxxx X. Xxxxxx
-29-
SCHEDULE III
DESIGNATED STOCKHOLDERS
-----------------------
Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
BP Puerto Rico, Inc.
Canaan Capital Limited Partnership
Canaan Capital Offshore Limited Partnership C.V.
Xxxxxx Xxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx Xxxxxxx
Xxxxx Xxxxx
Xxxx Xxxxxxx Life Insurance Company of America
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. XxXxxxxxx
Xxxx Holdings, Inc.
Xxxxxx X. Xxxxxxx
Pacific Mutual Life Insurance Company
PM Group Life Insurance Company
Xxxx Xxxxxxxxx
Xxxx X. Xxxxxxx 1994 Trust
Xxxxx Xxxxxxx, Xx. 1994 Trust
Suiza Profit Sharing Plan
-30-
