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EXHIBIT 1.1
ROCKY SHOES & BOOTS, INC.
1,700,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
_____________ ,1997
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
THE OHIO COMPANY
As Representatives of the several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇▇▇ Financial Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Rocky Shoes & Boots, Inc., an Ohio corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as the representatives (the
"Representatives") with respect to the sale by the Company of 1,370,000 shares
(the "Company Shares") of the Company's common stock, without par value (the
"Common Stock"), and the shareholders of the Company named in Schedule II hereto
(the "Selling Shareholders") propose to sell to the Underwriters 330,000 shares
of the Common Stock (the "Selling Shareholder Shares"). The Company Shares and
the Selling Shareholder Shares are hereinafter referred to collectively as the
"Firm Shares." The Company has also agreed to grant to you an option (the
"Option") to purchase up to a total of 255,000 additional shares of Common Stock
(the "Option Shares") on the terms and for the purposes set forth in Section
1(b) hereof. The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "Shares."
The Company and the Selling Shareholders confirm as follows their
agreements with you.
1. AGREEMENT TO SELL AND PURCHASE; PUBLIC OFFERING.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to all the terms and conditions of this Agreement,
the Company agrees to sell to the Underwriters an aggregate of 1,370,000 Firm
Shares, and each of the Selling Shareholders agrees, severally and not jointly,
to sell to the Underwriters the aggregate number of Firm Shares set forth
opposite such Selling Shareholder's name in Schedule II hereto, and each of the
Underwriters, severally and not jointly, agrees to purchase at the purchase
price of $_____ per share the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to all the terms and conditions of this Agreement, the
Company also grants the Underwriters the Option to purchase, severally and not
jointly, up to 255,000 Option
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Shares from the Company, each at the same price per share as you shall pay for
the Firm Shares. The Option may be exercised only to cover over-allotments in
the sale of the Firm Shares and may be exercised in whole or in part at any time
or from time to time on or before the 30th day after the date of the Prospectus
(as defined below) upon written or telegraphic notice (the "Option Shares
Notice") by you to the Company no later than 12:00 noon, Nashville, Tennessee
time at least two and no more than ten business days before the date and time
specified for closing in the Option Shares Notice (the "Option Closing Date")
setting forth the aggregate number of Option Shares to be purchased. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice, and unless
otherwise adjusted by the Representatives, each of the Underwriters will
purchase such percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing.
(c) After the Registration Statement becomes effective, upon the
authorization by you of the release of the Shares, the several Underwriters
propose to offer the Firm Shares and the Option Shares purchased by the
Underwriters for sale initially at the price per share set forth in the
Prospectus (the initial offering price) and upon the terms set forth therein.
2. DELIVERY AND PAYMENT.
Delivery of the Firm Shares shall be made to you by or on behalf of the
Company and the Selling Shareholders against payment of the purchase price by
federal funds wire transfer payable in same day funds to the order of the
Company and the Selling Shareholders at the offices of ▇.▇. ▇▇▇▇▇▇▇▇ & Co., ▇.▇.
▇▇▇▇▇▇▇▇ Financial Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
at such other place as may be agreed upon by the Representatives and the
Company, at 10:00 a.m., Nashville time, on the third full business day following
the date of this Agreement (the "Closing Date"), or at such other time on such
date, or at such other place, as may be agreed upon by the Company and the
Representatives.
To the extent the Option is exercised, delivery of the Option Shares
against payment therefor (in the manner specified above) will take place at the
offices specified above on the Option Closing Date (which, subject to the
requirements set forth above for the Option Shares Notice, may be the Closing
Date).
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as you shall request
not less than 48 hours prior to the Closing Date or the Option Closing Date, as
the case may be, by written notice to the Company. For the purpose of expediting
the checking and packaging of certificates for the Shares, the Company agrees to
make such certificates available for inspection at least 24 hours prior to the
Closing Date or the Option Closing Date, as the case may be, at a location to be
designated by you, which may be in New York, New York, or elsewhere. If the
Representatives so elect, delivery of the Shares may be made by credit through
full fast transfer to the accounts designed by the Representatives at The
Depository Trust Company.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the Underwriters shall be
borne by the Company. The Company will pay and save each of the Underwriters and
any subsequent holder of the Shares
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harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying federal and state stamp and other transfer taxes, if
any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and Option
Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents, warrants and covenants to each of the
Underwriters that:
(a) The Company has prepared and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (Registration
No. 333-35391) on Form S-2 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, under the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (collectively
referred to as the "Rules and Regulations") of the Commission thereunder. The
registration statement and all amendments thereto have been duly authorized and
executed by the Company in accordance with the Rules and Regulations. The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments and of each related preliminary prospectus have been
delivered to you. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective,
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the Rules
and Regulations will be filed promptly by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations, if required. The term
"Registration Statement" as used herein means the registration statement as
amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the prospectus as first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times subsequent
thereto through and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all applicable provisions of the Act and the
Rules and Regulations and did or will contain all statements required to be
stated therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
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therein not misleading. On the date any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to the Underwriters furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. The
Company acknowledges that the only information relating to the Underwriters
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement, any preliminary prospectus and the
Prospectus is the information in the last paragraph on the cover page, the
paragraphs relating to stabilization and passive market making practices on the
inside front cover and the statements set forth under the heading "Underwriting"
in any preliminary prospectus or the Prospectus.
(c) The only active subsidiaries (as defined in the Rules and
Regulations) of the Company and all trade names or other fictitious names used
by the Company or such subsidiaries are, as set forth in the Registration
Statement, Five Star Enterprises Ltd. and Lifestyle Footwear, Inc.
(individually, a "Subsidiary" and collectively, the "Subsidiaries"). The Company
and each of its Subsidiaries is, and at the Closing Date and, if later, the
Option Closing Date will be, a corporation duly organized, validly existing and
in good standing under the laws of the respective jurisdiction of their
incorporation. The Company is the sole legal and beneficial owner of all
securities of the Subsidiaries free and clear of all liens, charges and
encumbrances. The Company and each of its Subsidiaries has, and at the Closing
Date and, if later, the Option Closing Date will have, full power and authority
to conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company and each Subsidiary is,
and at the Closing Date and, if later, the Option Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to so qualify would not
have a material adverse effect upon the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole, and no proceeding has been
instituted in any jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, the Company's or any Subsidiary's power, authority,
licensing or qualification. Except for the stock of the Subsidiaries or as
disclosed in the Registration Statement, the Company does not own, and at the
Closing Date and, if later, the Option Closing Date will not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. Complete and correct copies of the Amended
and Restated Articles of Incorporation (the "Articles of Incorporation") and the
Amended and Restated Code of Regulations (the "Code of Regulations") of the
Company and the certificate of incorporation and bylaws of each Subsidiary and
all amendments thereto have been delivered to you, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
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(d) The outstanding shares of the Company's Common Stock have been, and
the Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be subject
to any preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date and, if
later, the Option Closing Date will be, complete and accurate in all respects.
All offers and sales of securities of the Company have been at all relevant
times duly registered under or exempt from the registration requirements of the
Act and were duly registered under or exempt from the registration requirements
of all applicable state securities or Blue Sky laws. Except as set forth in the
Prospectus and except for options issued under the Company's stock option plans,
the Company does not have outstanding, and at the Closing Date and, if later,
the Option Closing Date will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell any shares of
Common Stock or any such warrants, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(e) The financial statements together with the related notes and
schedules included in the Registration Statement or the Prospectus are accurate
in all material respects and present fairly the consolidated financial condition
of the Company as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. The financial and statistical data set forth in the
Prospectus under the captions "Prospectus Summary," "Summary Consolidated
Financial Data," "Use of Proceeds," "Capitalization," "Selected Consolidated
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Business," "Management" and "Principal and Selling
Shareholders" have been compiled on a basis consistent with that of the audited
financial statements contained in the Registration Statement and Prospectus and
fairly present the information set forth therein. No other financial statements
or schedules of the Company are required by the Act, the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Deloitte & Touche LLP
(the "Accountants"), who have reported on certain of such financial statements
and schedules, are independent auditors with respect to the Company as required
by the Act and the Rules and Regulations.
(f) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to assure 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 accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company's system of internal accounting controls taken as a
whole is sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in
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amounts that would be material in relation to the Company's financial
statements; and, except as disclosed in the Prospectus, neither the Company nor
any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, the receipt or payment of which could have a material adverse effect
on the Company.
(g) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.
(h) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date
and, if later, the Option Closing Date, except as set forth in the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, arising for any reason whatsoever, (ii) the
Company and its Subsidiaries have not incurred nor will they incur any material
liabilities or obligations, direct or contingent, except in the ordinary course
of business, (iii) the Company and its Subsidiaries have not entered into any
material transaction not in the ordinary course of business, (iv) the Company
has not and will not have paid or declared any dividends or other distributions
of any kind on any class of its capital stock, (v) there has not been and will
not have been any change in the capitalization of the Company or its
Subsidiaries other than pursuant to the exercise of employee stock options or
the issuance of shares under the Company's stock option plans and (vi) there has
not been any loss or damage (whether or not insured) to the property of the
Company or its Subsidiaries which has been sustained or will have been sustained
which has a material adverse effect on the business, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
(i) The Company and its Subsidiaries have timely filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown thereon as due, and there is no tax deficiency that has been or, to
the best of the Company's knowledge, might be asserted against the Company or
any of its Subsidiaries that might have a material adverse effect on the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole, and
all tax liabilities are adequately provided for on the books of the Company and
its Subsidiaries.
(j) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(k) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any Subsidiary or any of their respective
officers in their capacity as such, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
materially and adversely affect the Company or its Subsidiaries or its business,
properties, business prospects,
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condition (financial or otherwise) or results of operations or prevent or
materially hinder the consummation of this Agreement.
(l) The Company and its Subsidiaries have not at any time during the
past five years: (i) made any unlawful contributions to any candidate for any
political office, or failed fully to disclose any contribution in violation of
law; or (ii) made any payment to any state, federal or foreign government
official, or other person charged with similar public or quasi-public duty
(other than payment required or permitted by applicable law).
(m) The Company and each Subsidiary has, and at the Closing Date and,
if later, the Option Closing Date will have: (i) all governmental licenses,
permits, consents, orders, approvals and other authorizations necessary to carry
on its business as contemplated in the Prospectus; (ii) complied in all material
respects with all laws, regulations and orders applicable to it or its business
or properties; and (iii) performed all obligations required to be performed by
it, and is not, and at the Closing Date and, if later, the Option Closing Date
will not be, in default, under any contract or other instrument material to it
to which it is a party or by which its property is bound or affected where such
default would materially and adversely affect the Company or its Subsidiaries or
their business, properties, business prospects, condition (financial or
otherwise) or results of operations or prevent or materially hinder the
consummation of this Agreement. To the best knowledge of the Company and each
Subsidiary, as of the date of this Agreement, the Closing Date and, if later,
the Option Closing Date no other party under any contract or other instrument to
which it is a party is in default thereunder. Neither the Company nor any
Subsidiary is, nor at the Closing Date and, if later, the Option Closing Date
will any of them be, in violation of any provision of its certificate of
incorporation or bylaws.
(n) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein contemplated,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares, all of which requirements have been satisfied in all material respects.
(o) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly authorized by the Board of Directors
of the Company, and the Company has full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. This Agreement has
been duly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the Company in accordance
with the terms hereof. The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any material lien, charge or encumbrance upon any of the assets of
the Company or any Subsidiary pursuant to the terms or provisions of, or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, the
certificate of incorporation or bylaws of the Company or its Subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company or any
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Subsidiary is a party or by which the Company or any Subsidiary or any of its or
their properties are bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any Subsidiary; the occurrence of which would materially and
adversely affect the Company or its Subsidiaries or its business, properties,
business prospects, condition (financial or otherwise) or results of operations
or prevent or materially hinder the consummation of this Agreement.
(p) The Company and each Subsidiary has good and marketable title to
all properties and assets described in the Registration Statement and Prospectus
as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business of the Company or its Subsidiaries. The Company and each
Subsidiary has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiaries, and the Company
has no notice or knowledge of any material claim of any sort which has been, or
may be, asserted by anyone adverse to the Company's or a Subsidiary's rights as
lessee or sublessee under any lease or sublease described above, or affecting or
questioning the Company's or a Subsidiary's rights to the continued possession
of the leased or subleased premises under any such lease or sublease in conflict
with the terms thereof. The Company and each Subsidiary owns or leases all such
properties as are necessary to its operations as now conducted.
(q) Each of the Company and its Subsidiaries owns or possesses adequate
rights to use all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which are necessary to
conduct its businesses as described in the Registration Statement and
Prospectus; the Company has not received any notice of, and has no knowledge of,
any infringement of or conflict with asserted rights of the Company by others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights, and the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights owned or used by the Company, which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could have a material
adverse effect on the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
(r) To the best of the Company's knowledge, no labor disturbance by the
employees of the Company or any of its Subsidiaries exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers that could be expected to result in
a material averse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
(s) The Company and its Subsidiaries maintain insurance with insurers
of recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with insurance
coverage maintained by similar companies
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in similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company or its Subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor any such Subsidiary 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 at a cost that would not
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
(t) Except as described in the Registration Statement and the
Prospectus, there is no factual basis for any action, suit or other proceeding
involving the Company, its Subsidiaries or any of their material assets for any
failure of the Company, its Subsidiaries, or any predecessor thereof, to comply
with any requirements of federal, state, local or foreign regulation relating to
air, water, solid waste management, hazardous or toxic substances, or the
protection of health or the environment. Except as described in the Registration
Statement and the Prospectus, none of the property owned or leased by the
Company or its Subsidiaries is, to the best knowledge of the Company,
contaminated with any waste or hazardous substances, and neither the Company nor
its Subsidiaries may be deemed an "owner or operator" of a "facility" or
"vessel" which owns, possesses, transports, generates or disposes of a
"hazardous substance" as those terms are defined in Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. ss.9601, et seq.
(u) All documents or contracts required to be filed as an exhibit to
the Registration Statement to which the Company or any Subsidiary is a party
have been filed as exhibits to the Registration Statement or incorporated by
reference therein and have been duly authorized, executed and delivered by the
Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary and are enforceable against the Company or such
Subsidiary in accordance with the terms thereof, except where the lack of
authorization, execution, delivery or enforceability of any such contract would
not materially and adversely affect the Company or its Subsidiaries or its
business, properties, business prospects, condition (financial or otherwise) or
results of operations or prevent or materially hinder the consummation of this
Agreement.
(v) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to you was or will be, when made, inaccurate,
untrue or incorrect in any material respect.
(w) The Company has not taken and will not 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 the Common Stock,
and the Company is not aware of any such action taken or to be taken by
affiliates of the Company. To assure compliance with Regulation M under the
Exchange Act, the Company will not make bids for or purchases of or induce bids
for or purchases of, directly or indirectly, any shares of Common Stock or
securities convertible into
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Common Stock of the Company until the distribution of all shares of Common Stock
being sold in the public offering has been completed.
(x) No holder of securities of the Company has rights to require the
registration of any securities of the Company because of the filing of the
Registration Statement. There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(y) The Company has taken such action as necessary to have the Company
Shares authorized for trading, and all of the Company Shares have been approved
for listing, on the National Association of Securities Dealers Automated
Quotation National Market System (the "Nasdaq National Market") upon notice of
issuance, and the Selling Shareholder Shares are listed on the Nasdaq National
Market.
(z) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any brokerage
or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(aa) The Company has timely filed all required forms, reports and other
documents with the Commission all of which complied, when filed, in all material
respects, with all applicable requirements of the Act and the Exchange Act. As
of their respective dates, such reports, forms and other documents (including
all exhibits and schedules thereto) and documents incorporated by reference
therein (the "Reports"), did not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company has delivered a complete copy of all such Reports to the Representatives
prior to the date of this Agreement. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they hereafter are
filed with the Commission, will comply with the requirements of the Exchange Act
and the rules and regulations (the "Exchange Act Rules and Regulations") of the
Commission thereunder, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments thereto
become effective, at the Closing Date and, if later, at the Option Closing Date,
will not contain an untrue statement of material fact or omit to state a
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. The financial statements of the Company included or incorporated by
reference in such Reports, forms and other documents were prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may otherwise be indicated in the notes
thereto), and fairly present the financial position of the Company as of the
dates thereof and the consolidated results of its operations and consolidated
changes in its financial position for the periods then ended (subject, in the
case of any unaudited interim financial statements, to year-end adjustments).
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(ab) The representations and warranties made by the Company and its
Subsidiaries in that certain Revolving Credit Loan Agreement dated as of January
28, 1997 among the Company, Five Star Enterprises Ltd., Lifestyle Footwear,
Inc., Bank One, Columbus, NA, The Huntington National Bank and Bank One,
Columbus, NA, as agent, as amended, modified or supplemented from time to time
(the "Line of Credit"), were true, correct and complete when and as made and
will continue to be true, correct and complete in all material respects as of
the date of this Agreement, the Closing Date and, if later, the Option Closing
Date as if set forth in their entirety herein. The Company is in compliance with
all covenants of the Company and is not in default or breach of any of the terms
and provisions set forth in the Line of Credit, and after giving effect to the
Offering, the Company will continue to be in compliance with the covenants,
terms and provisions of the Line of Credit.
(ac) To the best of the Company's knowledge, none of the Selling
Shareholders listed under the caption "Principal and Selling Shareholders"
section of the Prospectus is a member of the NASD that is participating in the
distribution of the Shares or a "person associated with a member," as that term
is defined in the NASD's Review of Corporate Financing Interpretation.
(ad) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty to each Underwriter as to the matters covered thereby.
(ae) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date or the Option Closing Date, as the case may
be, or (ii) completion of the distribution of the Shares, any offering material
in connection with the offering and sale of the Shares other than any
preliminary prospectuses, the Prospectus, the Registration Statement and other
materials, if any, permitted by the Act.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each of the Selling Shareholders, severally and not jointly,
represents, warrants and covenants to each Underwriter that:
(a) Such Selling Shareholder at the Closing Date will have good and
valid title to the Shares set forth in Schedule II to be sold by such Selling
Shareholder, free and clear of any liens, encumbrances, equities and claims
(other than as imposed by the Act or this Agreement), and full right, power and
authority to effect the sale and delivery of such Shares; and upon the delivery
of and payment for the Shares to be sold by such Selling Shareholder pursuant to
this Agreement, good and valid title thereto, free and clear of any liens,
encumbrances, equities and claims, will be transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and delivered the
Custody Agreement and Power of Attorney (the "Custody Agreement") in the form
previously delivered to the Representatives, appointing ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, and each of them, as such Selling Shareholder's attorney-in-fact (the
"Attorney-in-Fact") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., as custodian (the
"Custodian"). The Attorney-in-Fact is authorized to execute, deliver and perform
this Agreement on behalf of such Selling Shareholder, to deliver the Shares to
be sold by such Selling Shareholder hereunder, to accept payment therefor and
otherwise to act on behalf of such
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Selling Shareholder in connection with this Agreement. Certificates, in suitable
form for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank, representing the Shares to be sold by such
Selling Shareholder hereunder have been deposited with the Custodian pursuant to
the Custody Agreement for the purpose of delivery pursuant to this Agreement.
Such Selling Shareholder agrees that the shares of Common Stock represented by
the certificates on deposit with the Custodian are subject to the interests of
the Company, the Underwriters and the other Selling Shareholders hereunder, that
the arrangements made for such custody and the appointment of the
Attorney-in-Fact are to that extent irrevocable, and that the obligations of
such Selling Shareholder hereunder shall not be terminated except as provided in
this Agreement and the Custody Agreement. If such Selling Shareholder should
die, become disabled or be declared incompetent, dissolve or become insolvent,
or if any other event should occur before the delivery of the Shares of such
Selling Shareholder hereunder, the certificates for such Shares deposited with
the Custodian shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such death, disability, incompetency,
dissolution, insolvency or other event had not occurred, regardless of whether
or not the Custodian or the Attorney-in-Fact shall have received notice thereof.
(c) Such Selling Shareholder, acting through its duly authorized
Attorney-in-Fact, has duly executed and delivered this Agreement and the Custody
Agreement; this Agreement constitutes a legal valid and binding obligation of
such Selling Shareholder; all authorizations and consents necessary for the
execution and delivery of this Agreement and the Custody Agreement on behalf of
such Selling Shareholder and for the sale and delivery of the Shares to be sold
by such Selling Shareholder hereunder have been given, except as may be required
by the Act or state securities laws or the NASD; and such Selling Shareholder
has the legal capacity and full right, power and authority to execute this
Agreement and the Custody Agreement.
(d) The performance of this Agreement and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby by each of the
Selling Shareholders will not result in a material breach or violation of, or
material conflict with, any of the terms or provisions of, or constitute a
material default by such Selling Shareholder under, any indenture, mortgage,
deed of trust (constructive or other), loan agreement, lease, franchise, license
or other agreement or instrument to which such Selling Shareholder or any of its
properties is bound, any statute, or any judgment, decree, order, rule or
regulation or any court or governmental agency or body applicable to such
Selling Shareholder or any of its properties.
(e) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offer and sale of the Shares other than any preliminary prospectus prepared and
filed by the Company with the Commission or the Prospectus or other material
permitted by the Act.
(f) To the knowledge of such Selling Shareholder, the representations
and warranties of the Company contained in Section 3 of this Agreement are true
and correct in all material respects; such Selling Shareholder has reviewed and
is familiar with the Registration Statement as originally filed with the
Commission and the preliminary prospectus contained therein. To the knowledge of
such Selling Shareholder, the preliminary prospectus does not include an untrue
statement of a material fact, or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not
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misleading; other than as disclosed to the Underwriters, such Selling
Shareholder is not prompted to sell the Shares to be sold by such Selling
Shareholder by any material, non-public information concerning the Company that
is not set forth in the preliminary prospectus or the Prospectus.
(g) To the extent that any statements or omissions made in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein, such Registration Statement, preliminary prospectus
and Prospectus and any amendments or supplements thereto did not and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(h) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory body, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement by such Selling Shareholder, and the consummation by it of the
transactions herein contemplated (other than as required by the Act, state
securities laws and the NASD).
(i) Any certificates signed by or on behalf of such Selling Shareholder
as such and delivered to the Representatives or to counsel for the
Representatives shall be deemed a representation and warranty by such Selling
Shareholder to each Underwriter as to the matters covered thereby.
(j) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated such Selling
Shareholder agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(k) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action intended to constitute or which has constituted, or
which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock. To assure compliance with
Regulation M under the Exchange Act, such Selling Shareholder will not make bids
for or purchases of or induce bids for or purchases of, directly or indirectly,
any shares of Common Stock or securities convertible into Common Stock of the
Company until the distribution of all shares of Common Stock being sold in the
public offering has been completed.
5. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each of the Underwriters as
follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares
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by an underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall first have
been submitted to you within a reasonable period of time prior to the filing
thereof and you shall not have objected thereto in good faith.
(b) The Company will use its reasonable best efforts to cause the
Registration Statement and any amendment thereto, if not effective at the time
and date that this Agreement is executed by the parties hereto, to become
effective as promptly as possible and will notify you promptly and confirm such
advice in writing: (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective; (ii) of any request
by the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof; (iv) of the happening of any event during the period mentioned in the
second sentence of Section 5(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading; and (v) of receipt by the
Company or any representatives or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will use its best efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
If the Company files a term sheet pursuant to Rule 434 of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus and term sheet meeting the requirements of Rule 434(b) or (c), as
applicable, of the Rules and Regulations, have been filed, within the time
period prescribed, with the Commission pursuant to subparagraph (7) of Rule
424(b) of the Rules and Regulations; if for any reason the filing of the final
form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, the Company will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed with the Commission
within the time period prescribed.
(c) The Company will furnish to you at or before the Closing Date,
without charge, four signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto, and will furnish you with such number of copies of the
Registration Statement, without exhibits, and all amendments thereto as you may
reasonably request.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement. The Company will, from time to time,
after the effective date of the Registration Statement file with the Commission
such reports as are required by the Act, the Exchange Act, the Rules and
Regulations and the Exchange Act Rules and Regulations, and shall also file with
state securities commissions in states where the Shares have been sold by you
(as
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you shall have advised us in writing) such reports as are required to be filed
by the securities acts and the regulations of those states.
(e) On the Effective Date, and thereafter from time to time until
expiration of the period mentioned in the second sentence of this Section 5(e),
the Company will deliver to each of you, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as you may reasonably request.
The Company consents to the use of the Prospectus or any amendment or supplement
thereto by you and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or your counsel should be set forth in the
Prospectus in order to make any statement therein, in light of the circumstances
under which it was made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with law, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of you, without charge, such number of copies thereof
as you may reasonably request.
(f) Prior to any public offering of the Shares by you, the Company will
cooperate with you and your counsel in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you may request; provided, that in no event shall
the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject. The
Company will, from time to time, file such statements, reports and other
documents as are or may be required to continue such qualifications in effect
for so long a period as the Underwriters may reasonably request.
(g) During a period of five years after the date hereof, the Company
will furnish to its shareholders as soon as practicable after the end of each
respective period annual reports (including financial statements audited by
independent certified public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder, upon request (i)
concurrently with furnishing such reports to its shareholders, statements of
operations of the Company for each of the first three quarters in the form
furnished to the Company's shareholders, (ii) concurrently with furnishing to
its shareholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, shareholders' equity and cash
flows of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent certified public accountants, (iii)
as soon as they are available, copies of all reports (financial or other) mailed
to shareholders, (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the NASD, (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to shareholders or prepared by the Company or any of its Subsidiaries
and (vi) any additional information of a public nature concerning the Company or
its Subsidiaries, or its business which you may reasonably request. During such
five year period, the foregoing financial statements shall be on a consolidated
basis to the extent that the accounts of the Company and its Subsidiaries are
consolidated and shall be
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accompanied by similar financial statements for any significant Subsidiary which
is not so consolidated.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the 15th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Underwriters, all costs and expenses incident to the performance
of the obligations of the Company under this Agreement, including but not
limited to costs and expenses of or relating to: (i) the preparation, printing,
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus; the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus; (ii) the preparation and delivery of certificates
representing the Shares; (iii) the printing of this Agreement and other
underwriting documents, including Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memorandum, Master Agreement Among Underwriters and
Master Selected Dealer Agreements; (iv) furnishing (including costs of shipping
and mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the quotation of the
Shares on the Nasdaq National Market; (vi) any filings required to be made by
you with the NASD, and the fees, disbursements and other charges of your counsel
in connection therewith; (vii) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the fees, disbursements and other
charges of your counsel in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda (subject to a
maximum fee of $10,000, assuming no unusual circumstances); and (viii) the
transfer agent for the Shares.
(j) If this Agreement shall be terminated by the Company or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse you for all out-of-pocket expenses (including the fees,
disbursements and other charges of your counsel) reasonably incurred by them in
connection herewith. If this Agreement shall be terminated by the Underwriters
based upon a matter within the control of the Company or any fault of the
Company, the Company shall reimburse you for any out-of-pocket expenses
(including the fees, disbursements and other charges of your counsel).
(k) The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares. The Company will
not make bids for or purchases of or induce bids for or purchases of, directly
or indirectly, any shares of Common Stock or securities convertible into Common
Stock of the Company until the distribution of all shares of Common Stock being
sold in the public offering has been completed.
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(l) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds," which description complies in all respects
with the requirements of Item 504 of Regulation S-K.
(m) During the period of 90 days commencing at the Closing Date, the
Company will not, without your prior written consent, grant options to purchase
shares of Common Stock, except under stock option plans previously approved by
the Company's shareholders and except at prices equal to or greater than "fair
market value," as defined in the Company's stock option plans.
(n) Except pursuant to this Agreement or with the prior written consent
of ▇.▇. ▇▇▇▇▇▇▇▇ & Co., the Company will not, and the Company has provided
agreements executed by each of the Company's officers and directors and each
record or beneficial owner of more than 1% of the shares of Company's Common
Stock providing that none of them will, for a period of 90 days from the
Effective Date, directly or indirectly, make, agree to or cause any offer, sale
(including short sale but excluding any sale of shares to any employee of the
Company pursuant to the exercise of options under the Company's stock option
plans), loan, pledge or other disposition of, or grant any options (other than
options under the Company's stock option plans) or other rights with respect to,
or otherwise reduce any risk of ownership, directly or indirectly, of any shares
of Common Stock or other capital stock of the Company, or any securities that
are convertible into or exchangeable or exercisable for shares of Common Stock
or other capital stock of the Company, or derivatives thereof, or request the
registration of any of the foregoing.
(o) The Company and its Subsidiaries will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that: (i) transactions are executed
in accordance with management's authorization; (ii) transactions are recorded as
necessary to permit the preparation of the Company's consolidated financial
statements and to maintain accountability for the assets of the Company and its
Subsidiaries; (iii) access to the assets of the Company and its Subsidiaries is
permitted only in accordance with management's authorization; and (iv) the
recorded accounts of the assets of the Company and its Subsidiaries are compared
with existing assets at reasonable intervals.
(p) If at any time during the 90-day period after the Registration
Statement is declared effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your opinion, the
market price for the Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
(q) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection with
the registration of the Shares under the Act.
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(r) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial statements of the Company
and its Subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
(s) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will not issue any press releases or other communications
directly or indirectly and will hold no press conferences with respect to the
Company or any of its Subsidiaries, the business, properties, assets,
liabilities, financial condition or results of operations of the Company or any
of its Subsidiaries, or the offering of the Shares, without your prior written
consent.
(t) The Company will use its best efforts to maintain the quotation of
the Shares on the Nasdaq National Market.
(u) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.
(v) During a period of 90 days from the effective date of the
Registration Statement, the Company will not file a registration statement
registering shares under any stock option plan or other employee benefit plan.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The respective obligations of the Underwriters to purchase and pay for
the Shares shall be subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by you not later than 5:30 p.m., Nashville, Tennessee time, on
the date of this Agreement or at such later date and time as shall be consented
to in writing by you and all filings required by Rule 424, Rule 430A, Rule 434
and Rule 462(b) of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, threatened by the Commission, (ii)
no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect, and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and to the satisfaction of the Representatives, (iv) after
the date hereof no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
you and you did not object thereto in good faith, (v) the NASD, upon review of
the terms of the public offering of the
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Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same, and (vi) and you shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change, or any development involving a prospective material
adverse change, in the general affairs, business, business prospects,
properties, management, key personnel, condition (financial or otherwise) or
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, in
each case other than as set forth in the Registration Statement and the
Prospectus (or, in the case of a prospective change, other than as contemplated
by the Registration Statement and the Prospectus) and (ii) the Company shall not
have sustained any material loss or interference with its business or properties
from fire, explosion, flood, hurricane or other casualty or calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in your reasonable judgment any
such development makes it inadvisable to consummate the sale and delivery of the
Shares by you at the public offering price. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there shall have been no litigation or other proceeding instituted against the
Company or any of its officers or directors in their capacities as such, before
or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.
(d) All corporate proceedings and other legal matters in connection
with this Agreement, the Registration Statement and the Prospectus, and the
registration, authorization, issue, sale and delivery of the Shares, shall have
been reasonably satisfactory to counsel to the Underwriters, and such counsel
shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section 6(d).
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, as if made
at the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to be fulfilled
or complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date, shall have
been duly performed, fulfilled or complied with.
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(f) The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to your counsel, from Porter, Wright, ▇▇▇▇▇▇
& ▇▇▇▇▇▇, counsel to the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Ohio, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus. The Company is
qualified to do business as a foreign corporation in good standing in
all other jurisdictions, except where the failure to so qualify would
not have a material adverse effect upon the Company.
(ii) Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be; each Subsidiary has
the corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and each Subsidiary is
qualified to do business as a foreign corporation in good standing in
all other jurisdictions, except where the failure to so qualify would
not have a material adverse effect upon the Company and its
Subsidiaries taken as a whole.
(iii) As of the dates specified therein, the Company had
authorized and issued capital stock as set forth under the caption
"Capitalization" in the Prospectus. All of the outstanding shares of
capital stock of each Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and all outstanding
shares of capital stock of each of the Subsidiaries are owned by the
Company free and clear of any perfected security interest and any other
security interests, claims, liens or encumbrances.
(iv) The Shares delivered on such Closing Date have been duly
authorized, validly issued and are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus.
(v) The outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; and the
shareholders of the Company have no preemptive or similar rights with
respect to the Shares or the Common Stock. All offers and sales of the
Company's securities during the past three years were at all relevant
times duly registered or exempt from the registration requirements of
the Act and were duly registered or the subject of an exemption from
the registration requirements of applicable state securities or Blue
Sky laws.
(vi) There are no contracts, agreements or understandings
known to such counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Company under the Act.
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(vii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the issuance or sale of the Shares or the consummation of the other
transactions contemplated by this Agreement, except such as have been
obtained and made under the Act, the Exchange Act and such as may be
required under state securities or Blue Sky laws.
(viii) The filing of the Registration Statement has been duly
authorized by the Board of Directors of the Company. The execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated, including the issuance and sale of
the Shares and compliance with the provisions thereof, will not result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, (A) any statute, rule or regulation or, to
the knowledge of such counsel, order of any governmental agency or body
or any court having jurisdiction over the Company or the Subsidiaries
or any of their properties, (B) any material obligation, agreement,
covenant or condition contained in any agreement or instrument to the
knowledge of such counsel to which the Company or the Subsidiaries is a
party or by which the Company or the Subsidiaries is bound or to which
any of the properties of the Company or the Subsidiaries is subject, or
(C) the Articles of Incorporation, as amended, or the Code of
Regulations of the Company or the certificate of incorporation or
bylaws of the Subsidiaries, and the Company has full power and
authority to authorize, issue and sell the Company Shares and the
Option Shares as contemplated by this Agreement.
(ix) The Registration Statement was declared effective under
the Act as of the date and time specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein or was included in the Registration Statement (as the
case may be), and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or any part thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act; the
Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of
the Act and the Rules and Regulations (except that such counsel need
express no opinion as to financial statements, schedules and other
financial or statistical information included therein); the
descriptions in the Registration Statement and Prospectus of the
Articles of Incorporation and Code of Regulations of the Company and of
statutes, legal and governmental proceedings and contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown; and such counsel does not know of any
statutes or regulations or any pending or threatened legal or
governmental proceedings, required to be described in the Prospectus
which are not described as required nor of any contracts or documents
of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements, schedules or other financial or statistical data
contained in the Registration Statement or the Prospectus or as to the
section of the Prospectus entitled "Underwriting."
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(x) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws now
or hereafter in effect relating to creditors' rights or debtors'
obligations generally; (B) that the remedies of specific performance
and injunctive and other forms of relief are subject to general
equitable principles, whether enforcement is sought at law or in
equity, and that such enforcement may be subject to the discretion of
the court before which any proceedings therefor may be brought; and (C)
as rights to indemnity and contribution may be limited by state or
federal laws relating to securities or the policies underlying such
laws.
(xi) To the knowledge of such counsel, the Company and its
Subsidiaries hold all licenses, certificates, permits and approvals
from all state, federal and other regulatory authorities, and have
satisfied in all material respects the requirements imposed by
regulatory bodies, administrative agencies or other governmental
bodies, agencies or officials, that are required for the Company and
its Subsidiaries lawfully to own, lease and operate its properties and
conduct its business as described in the Prospectus, and, to the
knowledge of such counsel, each of the Company and its Subsidiaries is
conducting its business in compliance in all material respects with all
of the laws, rules and regulations of each jurisdiction in which it
conducts its business.
(xii) The statements made in the Registration Statement under
the captions "Price Range of Common Stock and Dividend Policy,"
"Capitalization" and "Description of Capital Stock," to the extent that
they constitute summaries of documents referred to therein or matters
of law or legal conclusions, have been reviewed by such counsel and are
accurate summaries and fairly present the information disclosed
therein.
(xiii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, counsel for the Underwriters and the Accountants,
at which such conferences the contents of the Registration Statement and
Prospectus and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel which leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date and on the Option Closing Date, the Registration Statement and any
amendment or supplement thereto (other than the financial statements including
supporting schedules and other financial and statistical information derived
therefrom, as to which such counsel need express no comment) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or at the Closing Date or the Option Closing Date, as the case may be, the
Registration Statement, the Prospectus and any amendment or supplement thereto
(except as aforesaid) contained any untrue statement of a material fact or
omitted to state a material fact
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or the State of Ohio upon opinions
of local counsel, and as to questions of fact upon representations or
certificates of officers of the Company, the Selling Shareholders or officers of
the Selling Shareholders (when the Selling Shareholder is not a natural person),
and of government officials, in which case their opinion is to state that they
are so relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion.
(g) The Underwriters shall have received an opinion, dated the Closing
Date satisfactory in form and substance to your counsel, from Porter, Wright,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Selling Shareholders, to the effect that:
(i) This Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of each of the Selling
Shareholders and constitute valid and binding agreements of such
Selling Shareholders in accordance with their terms, except as
enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, moratorium, reorganization or similar laws from
time to time in effect affecting the enforcement of creditors' rights
and except that the enforceability of the rights to indemnity and
contribution contained herein may be limited by federal or state laws
and public policy underlying such laws.
(ii) To the knowledge of such counsel, the sale of the Shares
to be sold by each Selling Shareholder hereunder and the compliance by
such Selling Shareholder with all of the provisions of this Agreement
and the Custody Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute a
default under any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which such Selling Shareholder is a party or by which such Selling
Shareholder is bound or to which any of the property or assets of such
Selling Shareholder is subject, or any statute, order, rule or
regulation of any court or governmental agency or body known to such
counsel to be applicable to such Selling Shareholder or the property of
such Selling Shareholder.
(iii) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by each Selling
Shareholder hereunder, except which have been duly obtained and in full
force and effect, such as have been obtained under the Act and such as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Shares by the Underwriters,
as to which such counsel need express no opinion.
(iv) Assuming that the Underwriters will take delivery of the
Shares for value in good faith and without notice of any adverse claim
and that the Underwriters are not parties themselves to any fraud or
illegality affecting the Shares, and by delivery of a
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certificate or certificates therefor, the Selling Shareholders will
transfer to the Underwriters good and valid title to such shares, free
and clear of any pledge, lien, security interest, charge, claim, equity
or encumbrance of any kind.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent proper, on certificates of the Selling Shareholders and the
representations and warranties contained in the Custody Agreement executed by
such Selling Shareholder. Such counsel also may rely as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials.
(h) You shall have received an opinion, dated the Closing Date and, if
applicable, the Option Closing Date, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough,
L.L.P., as your counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to you, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(i) You shall have received at or prior to the Closing Date from ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P. a memorandum or memoranda, in form and
substance satisfactory to you, with respect to the qualification for offering
and sale by the Underwriters of the Shares under state securities or Blue Sky
laws of such jurisdictions as the Underwriters may have designated to the
Company.
(j) The Representative shall have received from the Accountants a
letter dated the date hereof, and at the Closing Date a second letter dated the
Closing Date (and, if applicable, the Option Closing Date), in form and
substance satisfactory to the Representatives, stating that they are independent
auditors with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations, and the answer to Item 509 of Regulation S-K
set forth in the Registration Statement is correct insofar as it relates to
them, and stating that:
(i) In their opinion, the financial statements and schedules
examined by them and included in the Registration Statement or
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the Rules and
Regulations and are presented in accordance with generally accepted
accounting principles; and they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the interim financial statements, selected financial and
operating data, and/or condensed financial statements derived from
audited financial statements of the Company.
(ii) The financial information included in the Preliminary
Prospectus and the Prospectus under the captions "Prospectus Summary,"
"Summary Consolidated Financial Data" and "Selected Consolidated
Financial Data" for each of the fiscal years ended June 30, 1992, 1993,
1994 and 1995, the six month period ended December 31, 1995 and the
fiscal year ended December 31, 1996 agrees with the corresponding
amounts in the audited financial statements included in the Prospectus
or previously reported on by them.
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(iii) On the basis of a reading of the latest available
interim financial statements (unaudited) of the Company and its
Subsidiaries, a reading of the minute books of the Company and its
Subsidiaries, inquiries of officials of the Company and its
Subsidiaries responsible for financial and accounting matters and other
specified procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused them to
believe that:
a. the unaudited financial statements included in the
Registration Statement do not comply as to form in all
material respects with the accounting requirements of the
federal securities laws and the related published rules and
regulations thereunder or are not in conformity with generally
accepted accounting principles applied on a basis consistent
with the basis for the audited financial statements contained
in the Registration Statement;
b. any other unaudited financial statement data
included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from
which data was derived and any such unaudited data were not
determined on a basis consistent with the basis for the
corresponding amounts in the audited financial statements
included in the Prospectus;
c. at a specified date not more than five days prior
to the date of delivery of such respective letter, there was
any change in the consolidated capital stock, decline in
shareholders' equity or increase in long-term debt of the
Company and its Subsidiaries, or any decreases in consolidated
working capital, net current assets or net assets or other
items specified by the Underwriters, in each case as compared
with amounts shown in the latest balance sheets included in
the Prospectus, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letters; and
d. for the period from the closing date of the latest
statements of operations included in the Prospectus to a
specified date not more than five days prior to the date of
delivery of such respective letter, there were any decreases
in net revenues or net income of the Company, or other items
appearing on the face of the statement of operations specified
by the Representatives, or any increases in any items
appearing on the face of the statement of operations specified
by the Representatives, in each case as compared with the
corresponding period of the preceding year, except in each
case for decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter.
(iv) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information specified by you which are derived from the
general accounting records of the Company and its Subsidiaries, which
appear in the Prospectus and have compared such amounts,
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percentages and financial information with the accounting records of
the Company and its Subsidiaries and have found them to be in
agreement.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
reasonably determined, after discussions with officers of the Company
responsible for financial and accounting matters and with the Accountants, that
such changes, decreases or increases as are set forth in such letters do not
reflect a material adverse change in the shareholders' equity or long-term debt
of the Company as compared with the amounts shown in the latest balance sheet of
the Company included in the Prospectus, or a material adverse change in total
net revenues or net income of the Company, in each case as compared with the
corresponding period of the prior year.
(k) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to you a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and Chief Financial
Officer of the Company, in form and substance satisfactory to you, to the effect
that:
(i) Each of the representations and warranties of the Company
contained in Section 3 of this Agreement were, when originally made,
and are, at the time such certificate is delivered, true and correct in
all material respects;
(ii) Each of the covenants required herein to be performed by
the Company on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with.
(l) On or prior to the Closing Date, you shall have received the
executed agreements referred to in Section 5(n).
(m) The Shares shall be qualified for sale in such states as you may
reasonably request, each such qualification shall be in effect and not subject
to any stop order or other proceeding on the Closing Date or the Option Closing
Date.
(n) The Shares shall have been duly authorized for quotation and shall
have been approved for listing on the Nasdaq National Market upon official
notice of issuance.
(o) No Underwriter shall have advised the Company that the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or any
supplement thereto, contains an untrue statement of fact which, in your
reasonable judgment, is material, or omits to state a fact which, in your
reasonable judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the Company shall
not have cured such untrue statement of fact or stated a statement of fact
required to be stated therein.
(p) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
requested as to the accuracy and
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completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to your obligations hereunder.
(q) The Selling Shareholders or the Attorney-in-Fact shall deliver to
the Underwriters a certificate dated the Closing Date and executed by each
Selling Shareholder or the Attorney-in-Fact to the effect that the
representations and warranties of the Selling Shareholders shall be true and
correct in all material respects as of the Closing Date.
All such opinions, certificates, letters and documents will be in
compliance with the provisions of this Agreement only if they are reasonably
satisfactory to you and counsel for the Underwriters. The Company will furnish
you with such conformed copies of such opinions, certificates, letters and
documents as you may request.
If any of the conditions specified in this Section 6 shall not have
been satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you on notice to the Company.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Underwriter
(including, without limitation, in its capacity as an Underwriter or as a
"qualified independent underwriter" within the meaning of Rule 2700 of the
NASD), the directors, officers, employees and agents of each Underwriter and
each person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based in whole or in part upon (i) any inaccuracy
in the representations and warranties of the Company contained herein, (ii) any
failure of the Company to perform its obligations hereunder or under law or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus or in any documents filed under the Exchange Act or any blue sky
application or filing, or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus or the Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so
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amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability; and further provided, that the Company will not be
liable to the extent that such loss, claim, liability, expense or damage arises
from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to an Underwriter furnished in writing to the Company by an Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. The Company acknowledges that the information in
the last paragraph on the cover page, the paragraphs relating to stabilization
and passive market making practices on the inside front cover and the statements
set forth under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by you expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter (including, without limitation, in
its capacity as an Underwriter or as a "qualified independent underwriter"
within the meaning of Rule 2700 of the NASD), and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, and the Company, its directors, its officers who
sign the Registration Statement and each person, if any who controls the Company
within the meaning of either such Section, provided, however, that the
indemnification obligation of each Selling Shareholder shall be limited to the
net proceeds received by such Selling Shareholder with respect to the Shares
sold, from and against any and all losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendment or supplement
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to such Selling Shareholder furnished in writing by or
on behalf of such Selling Shareholder expressly for use in the Registration
Statement or the Prospectus or in any preliminary prospectus; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus or the Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage or liability; and further
provided, that the Selling Shareholders will not be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to an Underwriter
furnished in writing to the Company by an Underwriter expressly for inclusion in
the Registration Statement, any preliminary prospectus or the Prospectus. The
Selling Shareholders acknowledge that the information in the last paragraph on
the cover page, the paragraphs relating to stabilization and
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passive market making practices on the inside front cover and the statements set
forth under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by you expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that each Selling Shareholder
might otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company, each
Selling Shareholder, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to you furnished in writing to the Company
by you expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus. The Company acknowledges that the information set
forth in the last paragraph on the cover page, the paragraphs relating to
stabilization and passive market making practices on the inside front cover and
the statements set forth under the heading "Underwriting" in any preliminary
prospectus and the Prospectus constitute the only information relating to the
Underwriters furnished in writing to the Company by the Underwriters expressly
for inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus. This indemnity will be in addition to any liability that the
Underwriters might otherwise have.
(d) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying
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party, (iii) a conflict of interests exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Underwriters or the
Selling Shareholders, then the Company, the Underwriters and the Selling
Shareholders will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters and the Selling
Shareholders, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may be liable for contribution) to which the Company, the
Underwriters and the Selling Shareholders may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
the Underwriters and the Selling Shareholders. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative benefits received by the Selling Shareholders shall be deemed to be in
proportion to the net proceeds to be received by them in the offering, as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentences is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentences but also the relative fault of the Company, the Underwriters
and the Selling Shareholders with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Underwriters or the Selling Shareholders, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Underwriters and the
Selling Shareholders agree that it would not be just and equitable if
contributions pursuant to this Section
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7(d) were to be determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purpose of this Section 7(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), an
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts received by it (less the aggregate amount of any damages
which such Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any similar claim), and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer and
director of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution maybe made under this Section 7(d), will notify any such party or
parties from whom contribution may be sought, but the omission to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 7(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(f) The indemnity and contribution agreements contained in this Section
7 and the representations and warranties of the Company and the Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by the Underwriters or
on their behalf, (ii) acceptance of any of the Shares and payment therefor or
(iii) any termination of this Agreement.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
8. TERMINATION.
The Underwriters' obligations under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option Shares,
on or prior to the Option Closing Date), by notice to the Company from the
Representatives, without liability on the part of any of the Underwriters to the
Company (provided, however, that this Section 8 and Sections 5(h), 5(i) and 7
shall be and always remain effective), if, prior to delivery and payment for the
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Shares (or the Option Shares, as the case may be), in your reasonable judgment,
(i) the Company shall have failed, refused or been unable to perform any
agreement on its part to be performed, or because of such condition the
Underwriters' obligations hereunder required to be fulfilled are not fulfilled,
including, but not limited to, any change in the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole from that set forth in the
Registration Statement or Prospectus which, in your reasonable judgment, is
material and adverse; (ii) any condition specified in Section 6 of this
Agreement shall not have been satisfied; (iii) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by an
exchange that lists the Shares or by the Nasdaq National Market; (iv) trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum or maximum prices shall
have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court of other governmental authority; (v) a
general banking moratorium shall have been declared by either federal or state
authorities; or (vi) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States, Puerto Rico or the Dominican Republic or any outbreak or
material escalation of hostilities or declaration by the United States, Puerto
Rico or the Dominican Republic of a national emergency or war or other calamity,
crisis, act of God or hostile act against the United States, Puerto Rico or the
Dominican Republic shall have occurred the effect of any of which is such as to
make it, in your reasonable judgment, impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus.
9. SUBSTITUTION OF UNDERWRITERS.
If any Underwriter shall fail or refuse to purchase any of the Firm
Shares which it has agreed to purchase hereunder, and the aggregate number of
Firm Shares which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Firm Shares, the
other Underwriters shall be obligated, severally, to purchase the Firm Shares
that such defaulting Underwriter agreed but failed or refused to purchase, in
the proportions which the number of Firm Shares which they have respectively
agreed to purchase pursuant to Section 1 bears to the aggregate number of Firm
Shares which all such non-defaulting Underwriters have so agreed to purchase, or
in such other proportions as you may specify; provided, that in no event shall
the maximum number of Firm Shares which an Underwriter has been obligated to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by more
than one-ninth of such number of Firm Shares without the prior written consent
of such Underwriter. If an Underwriter shall fail or refuse to purchase any Firm
Shares and the aggregate number of Firm Shares which such defaulting Underwriter
agreed but failed or refused to purchase exceeds one-tenth of the aggregate
number of the Firm Shares and arrangements satisfactory to the non-defaulting
Underwriters or the Company for the purchase of such Firm Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company for the
purchase or sale of any Shares under this Agreement. In any such case the
Underwriters or the Company shall have the right to postpone the Closing Date or
Option Closing Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected.
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Any action taken pursuant to this Section 9 shall not relieve any defaulting
Underwriter from liability in respect to any default of such Underwriter under
this Agreement.
10. DEFAULT BY A SELLING SHAREHOLDER.
If any of the Selling Shareholders shall fail to sell and deliver the
number of Shares that such Selling Shareholder is obligated to sell, the
Underwriters may, at their option, by notice to the Company, either (a) require
the Company to sell and deliver such number of shares of Common Stock as to
which the Selling Shareholders have defaulted, (b) elect to purchase the Firm
Shares and the Option Shares that the Company and the non-defaulting Selling
Shareholders have agreed to sell pursuant to this Agreement or (c) terminate
this Agreement if the Company shall have refused to sell and deliver to the
Underwriters the shares of Common Stock referred to in clause (a) of this
Section 10.
In the event of a default under this Section 10 that does not result in
the termination of this Agreement, either the Underwriters or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. No action taken pursuant
to this Section 10 shall relieve the Company or the Selling Shareholder so
defaulting from liability, if any, in respect of such default.
11. MISCELLANEOUS.
All communications hereunder shall be in writing and, if sent to any of
the Underwriters, shall be mailed, first class postage prepaid, sent via
reliable overnight delivery service, sent by facsimile (and by one of the two
preceding methods), delivered by hand or telegraphed and confirmed in writing to
the Representatives in care of ▇.▇. ▇▇▇▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇▇▇ Financial
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, or if sent to the Company shall be sent by one of the foregoing methods
to the Company at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
This Agreement has been and is made solely for the several
Underwriters' and the Company's and the Selling Shareholders' benefits and of
the controlling persons, directors and officers referred to in Section 7, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from an Underwriter.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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THE COMPANY, EACH SELLING SHAREHOLDER AND YOU EACH HEREBY IRREVOCABLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
You hereby represent and warrant to the Company and each Selling
Shareholder that you have authority to act hereunder on behalf of the several
Underwriters, and any action hereunder taken by you will be binding upon all the
Underwriters.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and you.
Very truly yours,
ROCKY SHOES & BOOTS, INC.
By:
----------------------------------------
Name:
Title:
SELLING SHAREHOLDERS:
By:
________________________________________
___________________, as Attorney-in-Fact
for each of the Selling Shareholders
identified on Schedule II
Confirmed and accepted as of
the date first above written.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
THE OHIO COMPANY
For themselves and as Representatives
of the several Underwriters
By: ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
By:
-----------------------------------
Name:
Title:
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SCHEDULE I
UNDERWRITERS
Number of
Name of Underwriter Firm Shares
------------------- -----------
▇.▇. ▇▇▇▇▇▇▇▇ & Co......................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated......................................
The Ohio Company........................................................
---------
Total..................................................... 1,700,000
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SCHEDULE II
SELLING SHAREHOLDERS
Number of
Name of Selling Shareholder Firm Shares
--------------------------- -----------
▇▇▇▇ ▇▇▇▇▇▇..................................................................................... 60,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇........................................................................... 50,000
▇▇▇ ▇. ▇▇▇▇▇▇................................................................................... 72,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇........................................................................... 48,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇............................................................................... 60,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇................................................................................. 40,000
-------
Total......................................................................... 330,000
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