1
EXHIBIT 1(a)
Draft - October 25, 1995
1,400,0000 SHARES
WOLVERINE WORLD WIDE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
December ___, 1995
XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx Xxxxxx and Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the several Underwriters
Dear Sirs:
SECTION 1. Introductory. Wolverine World Wide, Inc., a Delaware
corporation (the "Company), proposes to issue and sell 1,400,000 shares of its
authorized but unissued Common Stock (the "Common Stock") to the several
underwriters named in Schedule A annexed hereto (the "Underwriters"), for whom
you are acting as Representatives. Said aggregate of 1,400,000 shares are
herein called the "Firm Common Shares." In addition, the Company proposes to
grant to the Underwriters an option to purchase up to 210,000 additional shares
of Common Stock (the "Optional Common Shares"), as provided in Section 4
hereof. The Firm Common Shares and, to the extent such option is exercised,
the Optional Common Shares are hereinafter collectively referred to as the
"Common Shares."
The Company hereby confirms its agreements with respect to the
purchase of the Common Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-__________)
with respect to the Common Shares has been prepared by the Company in
conformity with the requirements of the Securities
-1-
2
Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company has prepared
and has filed or proposes to file prior to the effective date of such
registration statement an amendment or amendments to such registration
statement, which amendment or amendments have been or will be similarly
prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each exhibit
filed therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectus
have been delivered to you in such reasonable quantities as you have requested
for each of the Underwriters. The Company will next file with the Commission
one of the following: (i) prior to effectiveness of such registration
statement, a further amendment thereto, including the form of final prospectus,
or (ii) a final prospectus in accordance with Rules 430A and 424(b) of the
Rules and Regulations. As filed, such amendment and form of final prospectus,
or such final prospectus, shall include all Rule 430A Information and, except
to the extent that you shall agree to a modification, shall be in all
substantive respects in the form furnished to you prior to the date and time
that this Agreement was executed and delivered by the parties hereto, or, to
the extent not completed at such date and time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company shall have previously advised you
would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule 430A
Information. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Common Shares in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no filing pursuant to Rule 424(b) of the Rules and Regulations is required,
shall mean the form of final prospectus included in the Registration Statement
at the time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Common Shares and the
offering thereof permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A of the Rules and Regulations. Any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Form S-3
-2-
3
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the Rules
and Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of
the Act and the Rules and Regulations, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, will include any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, no representation or warranty contained in this
subsection 2(b) shall be applicable to information contained in or omitted from
any Preliminary Prospectus, the Registration Statement, the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives, specifically for use in the
preparation thereof. The documents incorporated by reference in the
Prospectus, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Annual Report on Form 10-K for the Company's most recent
fiscal year. The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, with full power
and authority (corporate and other) to own and lease their properties and
conduct their respective businesses as described in the Prospectus; the Company
owns all of the outstanding capital stock of its subsidiaries free and clear of
all claims, liens, charges and encumbrances; the Company and each of its
subsidiaries are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders material
to the conduct of their respective businesses, all of which are valid and in
full force and effect; the Company and each of its subsidiaries are duly
qualified to do business and in good standing as foreign
-3-
4
corporations in each jurisdiction in which the ownership or leasing of
properties or the conduct of their respective businesses requires such
qualification, except for jurisdictions in which the failure to so qualify
would not have a material adverse effect upon the Company or the subsidiary;
and no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
(d) The Company has an authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable, are duly listed on the New York Stock
Exchange and the Pacific Stock Exchange, have been issued in compliance with
all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform to the description thereof contained in the Prospectus.
All issued and outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. Except as disclosed in or contemplated by the Prospectus and
the financial statements of the Company, and the related notes thereto,
included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, 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 Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Common Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right which
has not been waived in writing to require the Company to register the sale of
any shares owned by such stockholder under the Act in the public offering
contemplated by this Agreement. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for the
issuance and sale of the Common Shares to be sold by the Company as
contemplated herein.
(f) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding
-4-
5
obligation of the Company in accordance with its terms. The making and
performance of this Agreement by the Company and the consummation of the
transactions herein contemplated will not violate any provisions of the
Certificate of Incorporation or bylaws of the Company or any of its
subsidiaries, and will not conflict with, result in the breach or violation of,
or constitute, either by itself or upon notice or the passage of time or both,
a material default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of its respective properties may be bound or affected, any
statute or any authorization, judgment, decree, order, rule or regulation of
any court or any regulatory body, administrative agency or other governmental
body applicable to the Company or any of its subsidiaries or any of its
respective properties. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement, except for compliance with
the Act, the Blue Sky laws and Canadian securities laws applicable to the
public offering of the Common Shares by the several Underwriters and the
issuance of a no objection letter with respect to such offering by the National
Association of Securities Dealers, Inc. (the "NASD").
(g) Ernst & Young LLP, who have expressed their opinion with respect
to the financial statements (included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994) filed with the Commission and
incorporated by reference in the Prospectus and the Registration Statement, are
independent accountants as required by the Act and the Rules and Regulations.
(h) The financial statements of the Company and the related notes
thereto, included in or incorporated by reference the Registration Statement
and the Prospectus present fairly the financial position of the Company and its
subsidiaries as of the respective dates of such financial statements, and the
results of operations and changes in financial position of the Company and its
subsidiaries for the respective periods covered thereby. Such statements and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as noted therein)
as certified by the independent accountants named in subsection 2(g). No other
financial statements are required to be incorporated by reference or included
in the Prospectus or the Registration Statement. The financial and statistical
data set forth in the Prospectus under the captions "Prospectus Summary," "Use
of Proceeds," "Price Range of Common Stock and Dividends," "Capitalization,"
"Selected Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business" and "Management" fairly
present the information set forth therein on the basis stated in the
Prospectus.
-5-
6
(i) Except as disclosed in the Prospectus, and except as to breaches
or defaults which individually or in the aggregate would have a material
adverse effect on the financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole ("material
adverse effect" on the Company or "materially adverse" to the Company as used
hereinafter in this Agreement means such effect on the Company and its
subsidiaries taken as a whole), neither the Company nor any of its subsidiaries
is in violation or default of any provision of its Certificate of Incorporation
or bylaws, or is in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist any state
of facts which constitutes an event of default on the part of the Company or
any such subsidiary as defined in such documents or which, with notice or lapse
of time or both, would constitute such an event of default.
(j) There are no documents required to be incorporated by reference
in the Registration Statement and the Prospectus by the Act or by the Rules and
Regulations or by the requirements of Form S-3, which have not been so
incorporated. There are no contracts or other documents required to be
described in the Registration Statement or filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have
not been described or filed as required. The description of such contracts are
accurate and complete. All such contracts are in full force and effect on the
date hereof.
(k) There are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is a party or of which property owned or
leased by the Company or any of its subsidiaries is the subject, or related to
environmental or discrimination matters, as to which there is a reasonable
probability that such actions, suits or proceedings would, individually or in
the aggregate, prevent or adversely affect the transactions contemplated by
this Agreement or would be materially adverse; and no labor disturbance by the
employees of the Company or any of its subsidiaries exists or is imminent which
would have a material adverse effect on the Company. Neither the Company nor
any of its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body which would be materially
adverse to the Company.
(l) The Company or the applicable subsidiary has good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or in the Prospectus), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those, if any,
reflected in such financial statements (or elsewhere in the Prospectus), or
(ii) those
-6-
7
which do not have a material adverse effect on the Company and which do not
have a material adverse effect on the use made and proposed to be made of such
property by the Company and its subsidiaries. The Company or the applicable
subsidiary holds its leased properties under valid and binding leases, with
such exceptions as are not materially significant in relation to the business
of the Company. Except as disclosed in the Prospectus, the Company owns or
leases all material properties which are necessary to its operations as now
conducted.
(m) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or written
agreement and other transaction which is not in the ordinary course of
business or which is reasonably likely to result in a material reduction in the
future earnings of the Company and its subsidiaries taken as a whole; (ii) the
Company and its subsidiaries have not sustained any loss or interference with
their respective businesses or properties from fire, flood, windstorm, accident
or other calamity, whether or not covered by insurance; (iii) the Company has
not paid or declared any dividends or other distributions with respect to its
capital stock and the Company and its subsidiaries are not in material default
in the payment of principal or interest on any material outstanding debt
obligations; (iv) there has not been any change in the capital stock (other
than upon the sale of the Common Shares hereunder and upon the exercise of or
grant of options or the award of shares under compensation plans described in
the documents incorporated by reference in the Prospectus, and warrants
described in the Registration Statement) or indebtedness material to the
Company and its subsidiaries (other than in the ordinary course of business);
and (v) there has not been any material adverse change in the Company.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks, trade
names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses substantially as now
conducted; and the Company has no knowledge of any materially adverse
infringement by it or its subsidiaries of trademark, trade name rights, patent
rights, mask works, copyrights, licenses, trade secret or other similar rights
of others which would have a materially adverse effect on the Company, and
there is no claim being made against the Company or its subsidiaries regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement which would have a material adverse effect on the Company.
(o) The Company has not been advised, and has no reason to
-7-
8
believe, that either it or any of its subsidiaries is not conducting business
in substantial compliance with all applicable laws, rules and regulations of
the jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations; except where failure to be so in compliance would not have a
material adverse affect on the financial, business, results of operations or
properties of the Company.
(p) The Company and its subsidiaries have filed all material
federal, state and foreign income and franchise tax returns and have
substantially paid all taxes shown as due thereon; and the Company has no
knowledge of any tax deficiency which has been asserted or threatened against
the Company or its subsidiaries which could materially and adversely affect the
business, operations or properties of the Company and its subsidiaries, except
for such failures or deficiencies which would not be materially adverse to the
Company.
(q) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940 (the "1940 Act"), as amended, and following
receipt of the proceeds from the sale of the Common Shares will not be required
to make any filing or to register under the 1940 Act.
(r) The Company has not distributed and will not distribute prior to
the First Closing Date any offering material in connection with the offering
and sale of the Common Shares other than the Prospectus, the Registration
Statement and the other materials permitted by the Act.
(s) Each of the Company and its subsidiaries maintain insurance of
the types and in the amounts that they reasonably deemed adequate for its
business, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, acts of vandalism and other risks customarily insured
against, all of which insurance is in full force and effect.
(t) To the best of its or their knowledge, neither the Company nor
any of its subsidiaries has at any time during the last five years (i) made any
unlawful contribution to any candidate for elective office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment
to any federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof, or (iii) taken any action which would constitute a violation of the
Foreign Corrupt Practice Act.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the
-8-
9
Common Shares, pursuant to this Agreement.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; and (iii) the recorded accountability for
assets in compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
SECTION 3. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represents and warrants
to the Company that the information set forth (i) on the cover page of the
Prospectus with respect to price, underwriting discounts and commissions and
terms of offering and (ii) under "Underwriting" in the Prospectus was furnished
to the Company by and on behalf of the Underwriters for use in connection with
the preparation of the Registration Statement and the Prospectus and is correct
in all material respects. The Representatives represent and warrant that it
has been authorized by each of the other Underwriters as the Representatives to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 4. Purchase, Sale and Delivery of Common Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Underwriters, in the respective amounts set forth in Exhibit A hereto,
__________ of the Firm Common Shares. The Underwriters agree, severally and
not jointly, to purchase from the Company the number of Firm Common Shares set
forth opposite their respective names in Schedule A hereto. The purchase price
per share to be paid by the several Underwriters to the Company shall be $___
per share.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of Xxxxxx
Xxxxxxxx & Xxxx LLP, 900 Old Kent Bank Building, 000 Xxxx XX, Xxxxx Xxxxxx,
Xxxxxxxx 00000 (or such other place as may be agreed upon by the Company and
the Representatives) at such time and date, not later than the third (or, if
the Firm Common Shares are priced, as contemplated by Rule 15c6-1(c)
promulgated under the Securities Exchange Act of 1934, as amended, after 4:30
p.m., Washington D.C. time, the fourth) full business day following the first
date that any of the Common Shares are released by the Underwriters for sale to
the public, as you shall designate by at least 48 hours prior notice to the
Company (the "First Closing Date"); provided, however, that if the Prospectus
is at any time prior to the First Closing Date recirculated to the public, the
First Closing Date shall occur upon the later of the third or fourth, as the
case may be, full business day following the first date that any of the Common
Shares are
-9-
10
released by the Underwriters for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters against payment by you, for the accounts of the several
Underwriters, of the purchase price therefor by certified or official bank
checks payable in next day funds to the order of the Company. The certificates
for the Firm Common Shares shall be registered in such names and denominations
as you shall have requested at least two full business days prior to the First
Closing Date, and shall be made available for checking and packaging on the
business day preceding the First Closing Date at a location in New York, New
York, as may be designated by you. Time shall be of the essence, and delivery
at the time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 210,000 Optional
Common Shares at the purchase price per share to be paid for the Firm Common
Shares, for use solely in covering any over-allotments made by you for the
account of the Underwriters in the sale and distribution of the Firm Common
Shares. The option granted hereunder may be exercised at any time (but not
more than once) within 30 days after the first date that any of the Common
Shares are released by you for sale to the public, upon notice by you to the
Company setting forth the aggregate number of Optional Common Shares as to
which the Underwriters are exercising the option, the names and denominations
in which the certificates for such shares are to be registered and the time and
place at which such certificates will be delivered. Such time of delivery
(which may not be earlier than the First Closing Date), being herein referred
to as the "Second Closing Date," shall be determined by you, but if at any time
other than the First Closing Date shall not be earlier than three nor later
than five full business days after delivery of such notice of exercise. The
number of Optional Common Shares to be purchased by each Underwriter shall be
determined by multiplying the number of Optional Common Shares to be sold by
the Company pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Firm Common Shares to be purchased by such Underwriter
as set forth opposite its name in Schedule A and the denominator of which is
1,400,000 (subject to such adjustments to eliminate any fractional share
purchases as you in your discretion may make). Certificates for the Optional
Common Shares will be made available for checking and packaging on the business
day preceding the Second Closing Date at a location in New York, New York, as
may be designated by you. The manner of payment for and delivery of the
Optional Common Shares shall be the same as for the Firm Common Shares
purchased from the Company as specified in the two preceding
-10-
11
paragraphs. At any time before lapse of the option, you may cancel such option
by giving written notice of such cancellation to the Company. If the option is
cancelled or expires unexercised in whole or in part, the Company will
deregister under the Act the number of Option Shares as to which the option has
not been exercised.
You represent and warrant to the Company that each Underwriter has
authorized you to accept delivery of its Common Shares, to make payment and to
receipt therefor. You, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by you by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Representatives is advisable and at the public offering price set forth
on the cover page of and on the terms set forth in the Prospectus.
SECTION 5. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will use all reasonable efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing of
the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed, pursuant
to the applicable paragraph of Rule 424(b) of the Rules and Regulations within
the time period prescribed and will provide evidence reasonably satisfactory to
you of such timely filing. The Company will promptly advise you in writing (i)
of the receipt of any comments of the Commission, (ii) of any request of the
Commission for amendment of or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus or for additional information, (iii) when the Registration Statement
shall have become effective, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose. If the Commission shall enter
any such stop order at any time, the Company will use all reasonable efforts to
obtain the lifting of such order at the earliest possible moment. The Company
will not file any amendment or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus of which you have not been furnished
-11-
12
with a copy a reasonable time prior to such filing or to which you reasonably
object or which is not in compliance with the Act and the Rules and
Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or the Prospectus which in your reasonable judgment may be necessary or
advisable to enable the several Underwriters to continue the distribution of
the Common Shares and will use all reasonable efforts to cause the same to
become effective as promptly as possible. The Company will fully and
completely comply with the provisions of Rule 430A of the Rules and Regulations
with respect to information omitted from the Registration Statement in reliance
upon such Rule.
(c) As soon as practicable, but not later than 45 days after the end
of the first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), or not later than 90 days after the end of such quarter, if the
quarter is the fourth quarter of the Company's fiscal year, the Company will
make generally available to its security holders an earnings statement (which
need not be audited) covering a period of 12 consecutive months beginning after
the effective date of the Registration Statement which will satisfy the
provisions of the last paragraph of Section 11(a) of the Act.
(d) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the prospectus delivery period required under the
Act, will furnish to you or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all amendments and
supplements to any such documents in each case as soon as available and in such
quantities as you may reasonably request, for the purposes contemplated by the
Act.
(e) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as you designate
(which such jurisdictions may include states of the United States, other United
States jurisdictions, Canada and Canadian Provinces), will comply with such
laws and will continue such qualifications, registrations and exemptions in
effect so long as reasonably required for the distribution of the Common
Shares. The Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation as
a foreign corporation. The Company will advise you promptly of the suspension
of the qualification or registration of (or any such exemption relating to) the
Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the event
of the issuance of
-12-
13
any order suspending such qualification, registration or exemption, the
Company, with your cooperation, will use all reasonable efforts to obtain the
withdrawal thereof.
(f) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request of the Representatives, to
each of the other Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the National Association of
Securities Dealers, Inc. ("NASD"), New York Stock Exchange, Pacific Stock
Exchange or any other securities exchange; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally to
holders of its Common Stock.
(g) During the period of 90 days after the first date that any of the
Common Shares are released by you for sale to the public, without the prior
written consent of Xxxxxxxxxx Securities (which consent may be withheld at the
sole discretion of the Xxxxxxxxxx Securities), the Company, its directors and
its officers named in the Prospectus under the heading "Management," will not
issue, offer, sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities or any other securities convertible into or
exchangeable with its Common Stock or other equity security, except pursuant to
options and plans disclosed in the Prospectus or documents incorporated by
reference in the Prospectus or gifts or dispositions by individuals not
involving the public market, provided that the recipients of such gifts or
dispositions agree to be bound by restrictions on sale as provided in this
paragraph (g).
(h) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(i) The Company will use all reasonable efforts to qualify or
register its Common Stock for sale in non-issuer transactions under (or obtain
exemptions from the application of) the Blue Sky laws of the State of
California (and thereby permit market making transactions and secondary trading
in the Company's Common Stock in California), will comply with such Blue Sky
laws and will continue such qualifications, registrations and exemptions in
effect for a period of five years after the date hereof.
(j) The Company will list, subject to official notice of issuance, on
the New York Stock Exchange and the Pacific
-13-
14
Stock Exchange, the Common Shares to be issued and sold by the Company.
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 6. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective or is terminated,
the Company agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses
of the Company's counsel and the Company's independent accountants, (v) all
costs and expenses incurred in connection with the printing, filing, shipping
and distribution of the Registration Statement, each Preliminary Prospectus and
the Prospectus (including all exhibits and financial statements) and all
amendments and supplements provided for herein, this Agreement, the Agreement
Among Underwriters, the Selected Dealers Agreement, the Underwriters'
Questionnaire, the Underwriters' Power of Attorney and the preliminary and
final Blue Sky memorandum, (vi) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Common Shares for offer and sale under the Blue Sky laws
and applicable Canadian securities laws, and (vii) all other fees, costs and
expenses referred to in Item 14 of the Registration Statement. Except as
provided in this Section 6, Section 8 and Section 10 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the Blue Sky laws, Canadian securities laws, and the Blue Sky
memoranda), stock transfer taxes on resale of the Common Shares by them, the
expenses of the Underwriters incurred in connection with marketing of the
Common Shares, and any advertising expenses connected with any offers they
make.
SECTION 7. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Common Shares on
the First Closing Date and the Optional Common Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties on
the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its
-14-
15
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 P.M., Washington, D.C. Time, on the date of this Agreement, or at
such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction.
(b) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, (i) the representations and
warranties of the Company set forth in Section 2 of this Agreement shall be
true and correct as of the First Closing Date and the Second Closing Date, as
the case may be, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or any of its
subsidiaries, which is not in the ordinary course of business or which could
result in a material reduction in the future earnings of the Company and its
subsidiaries taken as a whole, (iii) no loss or damage (whether or not insured)
to the property of the Company or any of its subsidiaries shall have been
sustained which materially and adversely affects the financial condition,
business, results of operations or properties of the Company and its
subsidiaries, taken as a whole, (iv) no legal or governmental action, suit or
proceeding affecting the Company or any of its subsidiaries which is material
to the Company and its subsidiaries, taken as a whole, or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened, and (v) there shall not have been any material change
in the financial condition, business, management, results of operations or
properties of the Company and its subsidiaries, taken as a whole, which makes
it impractical or inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives of
the Underwriters, on each Closing Date, in form and substance satisfactory to
you, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx Xxxxxxxx & Xxxx LLP, counsel for the
Company, addressed to the Underwriters and dated the First
-15-
16
Closing Date, or the Second Closing Date, as the case may be, to the effect
that:
(1) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, is duly qualified to do business
as a foreign corporation and is in good standing in all other jurisdictions
where the ownership or leasing of properties or the conduct of its business
requires such qualification, except for such failures to so qualify would not
have a material adverse effect, and has full corporate power and authority to
own its properties and conduct its business as described in the Registration
Statement;
(2) The authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; all necessary and proper corporate proceedings have been taken in
order to authorize validly such authorized Common Stock; the Firm Common Shares
and any Optional Common Shares have been duly and validly issued, are fully
paid and nonassessable, have been issued in compliance with federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase any securities and conform
to the description thereof contained in the Prospectus; without limiting the
foregoing, there are no preemptive or other rights to subscribe for or purchase
any of the Common Shares to be sold by the Company hereunder;
(3) All of the issued and outstanding shares of the Company's
[subsidiaries] have been duly and validly authorized and issued, are fully paid
and nonassessable and are owned beneficially by the Company free and clear of
all liens, encumbrances, security interests, as voting trusts;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Delaware law, and when
duly countersigned by the Company's transfer agent and registrar, and delivered
to you or upon your order against payment of the agreed consideration therefor
in accordance with the provisions of this Agreement, the Common Shares
represented thereby will be duly authorized and validly issued, fully paid and
nonassessable, will not have been issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities and
will conform in all respects to the description thereof contained in the
Prospectus;
(5) Except as disclosed in or specifically contemplated by,
or disclosed in documents incorporated by reference in, the Prospectus, to such
counsel's knowledge, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any security convertible
into or exchangeable for capital stock of the Company;
-16-
17
(6) (a) The Registration Statement has become effective under
the Act, and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission; any required
filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) of
the Rules and Regulations has been made in the manner and within the time
period required by such Rule 424(b);
(b) The Registration Statement, the Prospectus and each amendment or
supplement thereto (except for the financial statements and schedules included
as incorporated by reference therein as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements of
the Act and the Rules and Regulations;
(c) To such counsel's knowledge, there are no franchises, leases,
contracts, agreements or documents required to be disclosed in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or filed, as required;
(d) To such counsel's knowledge, there are no legal or governmental
actions, suits or proceedings pending or threatened against the Company which
are required to be described in the Prospectus which are not described as
required; and
(e) The documents incorporated by reference in the Prospectus (except
for any financial statements and schedules included in such documents as to
which such counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder;
(f) At the date the Registration Statement was filed, the Company has
met all of the eligibility requirements for the use of a registration statement
on Form S-3.
(7) The Company has full corporate right, power and authority to
enter into this Agreement and to sell and deliver the Common Shares to be sold
by it to the several Underwriters; this Agreement has been duly and validly
authorized by all necessary corporate action by the Company, has been duly and
validly executed and delivered by and on behalf of the Company, and is a valid
and binding agreement of the Company in accordance with its terms, except to
the extent that (i) the validity and binding effect and enforcement of this
Agreement may be limited by any applicable bankruptcy, reorganization,
moratorium, or similar laws of general application, (ii) the availability of
equitable remedies may be limited by principles of equity, whether considered
in a proceeding at law or in equity, and (iii) the terms hereof may be limited
by applicable securities laws and the policies embodied therein; and to such
counsel's knowledge, no approval,
-17-
18
authorization, order, consent, registration, filing, qualification, license or
permit of or with any court, regulatory, administrative or other governmental
body is required for the execution and delivery of this Agreement by the
Company or the consummation of the transactions contemplated by this Agreement,
except such as have been obtained and are in full force and effect under the
Act and such as may be required under applicable Blue Sky laws or Canadian
securities laws in connection with the purchase and distribution of the Common
Shares by the Underwriters and the obtaining a letter of no objection of such
offering from the NASD;
(8) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not, and to such
counsel's knowledge conflict with, result in a material breach of, or
constitute, either by itself or upon notice or the passage of time or both, a
material default under, any material agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known to such counsel
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of its or their property may be bound
or affected which is material to the Company and its subsidiaries, or violate
any of the provisions of the certificate of incorporation or bylaws of the
Company or any of its subsidiaries or, so far as is known to such counsel,
violate any statute, judgment, decree, order, rule or regulation of any court
or governmental body having jurisdiction over the Company or any of its
subsidiaries or any of its or their property (other than state securities or
Blue Sky laws and regulations as to which counsel need not express any
opinion);
(9) Neither the Company nor any subsidiary is in violation of its
certificate of incorporation or bylaws, or to such counsel's knowledge, in
breach of or default with respect to any provision of any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
known to such counsel to which the Company or any such subsidiary is a party or
by which it or any of its properties may be bound or affected, except where
such default would not materially adversely affect the Company; and, to such
counsel's knowledge, the Company and its subsidiaries are in compliance with
all laws, rules, regulations, judgments, decrees, orders and statutes of any
court or jurisdiction to which they are subject, except where noncompliance
would not materially adversely affect the Company and its subsidiaries;
(10) To such counsel's knowledge, no stockholders of the Company
have any right which has not been waived in writing to require the Company to
register the sale of shares owned by the Stockholders under the Act in the
offering contemplated hereby;
(11) No transfer taxes are required to be paid under the laws of the
State of Michigan in connection with the sale and
-18-
19
delivery of the Common Shares to the Underwriters hereunder.
In rendering the foregoing opinion, such counsel may rely as to matters not
governed by Federal law or the laws of the State of Michigan on opinions of
legal counsel satisfactory to such counsel and upon certificates of public
officials and officers of the Company without independent verification thereof.
References to knowledge of such counsel may be qualified to mean the actual
knowledge of attorneys associated with such firm who have recorded time
chargeable to the Company between January 1, 1995 and the date of such opinion.
In addition, such counsel shall state that they have participated in
conferences with officers, employees and other representatives of the Company,
counsel for the Underwriters, representatives of the independent public
accountants for the Company and representatives of the Underwriters at which
the contents of the Registration Statement and Prospectus and related matters
were discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus and has not
made any independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to a large extent upon the statements of
officers, employees and other representatives of the Company), no facts have
come to such counsel's attention that lead them to believe that either the
Registration Statement at the time such Registration Statement became
effective contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made, not
misleading, or the Prospectus as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that such counsel need express no opinion with respect
to financial statements, schedules and financial date included in the
Registration Statement or Prospectus;
(ii) Such opinion or opinions of Xxxxx Xxxxxxx Rain Xxxxxxx (A
Professional Corporation), counsel for the Underwriters, dated the First
Closing Date or the Second Closing Date, as the case may be, with respect to
the incorporation of the Company, the sufficiency of all corporate proceedings
and other legal matters relating to this Agreement, the validity of the Common
Shares, the Registration Statement and the Prospectus and other related matters
as you may reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers and records
as they may reasonably request for the purpose of enabling them to pass upon
such matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and governmental
officials. In addition, counsel for the underwriters may rely on the opinion
of Warner, Norcross & Xxxx as to matters of Michigan law and may
-19-
20
assume, with the permission of Warner, Norcross & Xxxx, that the laws of the
State of Texas are the same as the laws of the State of Michigan with respect
to the matters of law relied upon.
(iii) A certificate of the Company executed by the President or a
Vice President and the chief financial or accounting officer of the Company,
dated the First Closing Date or the Second Closing Date, as the case may be, to
the effect that:
(1) The representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of the date of
this Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied on or
prior to such Closing Date;
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus filed as a
part of the Registration Statement or any amendment thereto; no stop order
suspending the effectiveness of the Registration Statement has been issued; and
to the best of the knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under the Act;
(3) Each of the respective signers of the certificate has
carefully examined the Registration Statement and the Prospectus; in his
opinion and to the best of his knowledge, the Registration Statement and the
Prospectus and any amendments or supplements thereto contain all statements
required to be stated therein regarding the Company and its subsidiaries; and
neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction or event has
occurred which should have been set forth in an amendment to the Registration
Statement or in a supplement to or amendment of any prospectus which has not
been disclosed in such a supplement or amendment;
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as disclosed
in or contemplated by the Prospectus, there has not been any material adverse
change or a development involving a material adverse change in the condition
(financial or otherwise), business, properties, results of operations,
management or prospects of the Company and its subsidiaries; and no legal or
governmental action, suit or proceeding is pending or threatened against the
Company or any of its subsidiaries which is materially adverse to the
-20-
21
Company, whether or not arising from transactions in the ordinary course of
business, or which may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither the Company nor
any of its subsidiaries has entered into any verbal or written agreement or
other transaction which is not in the ordinary course of business (or which
could result in a material adverse effect on the future earnings of the
Company) or incurred any liability or obligation, direct, contingent or
indirect, that would have a material adverse effect on the Company, or made any
change in its capital stock, made any material change in its short-term debt or
long-term debt or repurchased or otherwise acquired any of the Company's
capital stock; and the Company has not declared or paid any dividend, or made
any other distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the First Closing Date or Second
Closing Date, except as disclosed in the Prospectus; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except as disclosed
in or contemplated by the Prospectus, the Company and its subsidiaries have not
sustained a material loss or damage by strike, fire, flood, windstorm, accident
or other calamity (whether or not insured).
(vi) On the date before this Agreement is executed and also on the
First Closing Date and the Second Closing Date a letter addressed to you, as
Representatives of the Underwriters, from Ernst & Young LLP, independent
accountants, the first one to be dated the day before the date of this
Agreement, the second one to be dated the First Closing Date and the third one
(in the event of a Second Closing) to be dated the Second Closing Date,
consistent with Exhibit B hereto.
(vii) On or before the First Closing Date, letters from each
director and officer named in the Company's proxy statement dated March 27,
1995, for its Annual Meeting of Stockholders held on April 19, 1995, under the
heading "Securities Ownership of Management," and Xxxxxx Sidrewski, Xxxxx
Xxxxxxx and Xxxx Xxxxx, in form and substance consistent with Appendix C
hetero.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional Corporation), counsel for the
Underwriters. The Company shall furnish you with such manually signed or
conformed copies of such opinions, certificates, letters and documents as you
request. Any certificate signed by any officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
statements made therein.
If any condition to the Underwriters' obligations hereunder to
-21-
22
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Representatives to the Company without liability on the part of any Underwriter
or the Company except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in
Section 10 hereof.
SECTION 8. Reimbursement of Underwriters' Expenses. Notwithstanding any other
provisions hereof, if this Agreement shall be terminated by you pursuant to
Section 7, or if the sale to the Underwriters of the Common Shares at the First
Closing is not consummated because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse you and the other
Underwriters upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by you and them in connection with the proposed purchase
and the sale of the Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage,
telegraph charges and telephone charges relating directly to the offering
contemplated by the Prospectus. Any such termination shall be without
liability of any party to any other party except that the provisions of this
Section, Section 6 and Section 10 shall at all times be effective and shall
apply.
SECTION 9. Effectiveness of Registration Statement. You and the Company will
use your and its best efforts to cause the Registration Statement to become
effective, to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages, liabilities
or expenses, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any
of them not misleading, or arise out of or are based in whole, provided,
further, that the Company shall not be liable to any Underwriter or any
controlling person of an Underwriter in respect of any Preliminary Prospectus
to the extent that (i) the Prospectus did not contain the untrue statement
-22-
23
or alleged untrue statement or omission or alleged omission giving rise to such
loss, claim, damage, liability, expense or action; (ii) the Prospectus was not
sent to or given to the purchaser of the Common Shares in question at or prior
to the time at which the written confirmation of the sale of such Common Shares
was sent or given to such person; and (iii) the failure to deliver such
Prospectus was not the result of the Company's noncompliance with its
obligations under this Agreement The Company will reimburse each Underwriter
and each such controlling person for any legal and other expenses as such
expenses are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
the information furnished to the Company pursuant to Section 3 hereof. In
addition to its other obligations under this Section 10(a), the Company agrees
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any inaccuracy
in the representations and warranties of the Company herein or failure to
perform its obligations hereunder, all as described in this Section 10(a), it
will reimburse each Underwriter on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Company's obligation to reimburse each Underwriter for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank
of America NT&SA, San Francisco, California (the "Prime Rate"). Any such
interim reimbursement payments which are not made to an Underwriter within 30
days of a request for reimbursement, shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages, liabilities or
expenses to which the Company, or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
-23-
24
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 3
hereof; and will reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. In addition to its other
obligations under this Section 10(b), each Underwriter severally agrees that,
as an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 10(b)
which relates to information furnished to the Company pursuant to Section 3
hereof, it will reimburse the Company (and, to the extent applicable, each
officer, director, controlling person) on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and,
to the extent applicable, each officer, director, controlling person) for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the
Company (and, to the extent applicable, each officer, director, controlling
person) shall promptly return it to the Underwriters together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within 30 days of a
request for reimbursement, shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the
-24-
25
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Representatives in the case of paragraph 10(a), representing
the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying party.
An indemnifying party shall not be liable for any settlement of any action,
suit, proceeding or claims effected without its written consent.
(d) If the indemnification provided for in this Section 10 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Underwriters from the offering of the Common Shares or
(ii) if the allocation provided by clause (i)
-25-
26
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Underwriters in connection with
the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company and the Underwriters shall
be deemed to be in the same proportion, in the case of the Company as the total
price paid to the Company for the Common Shares sold by it to the Underwriters
(net of underwriting commissions but before deducting expenses) bears to the
total price to the public set forth on the cover of the Prospectus, and in the
case of the Underwriters as the underwriting commissions received by them bears
to the total price to the public set forth on the cover of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact by the Company or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
subparagraph (c) of this Section 10, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in subparagraph (c) of this
Section 10 with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this subparagraph (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (c) for purposes of
indemnification. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 10 were determined
solely by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
of the total underwriting commissions received by such Underwriter in
connection with the Common Shares underwritten by it and distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 10 are several in proportion
to their respective underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 10(a) and 10(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such
-26-
27
amounts, shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in Sections 10(a) and 10(b) hereof and would not resolve
the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of such Sections 10(a) and 10(b)
hereof.
SECTION 11. Default of Underwriters. It shall be a condition to this
Agreement and the obligation of the Company to sell and deliver the Common
Shares hereunder, and of each Underwriter to purchase the Common Shares in the
manner as described herein, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all the Common
Shares agreed to be purchased by such Underwriter hereunder upon tender to the
Representatives of all such shares in accordance with the terms hereof. If any
Underwriter or Underwriters default in their obligations to purchase Common
Shares hereunder on either the First or Second Closing Date and the aggregate
number of Common Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase on such Closing Date does not exceed 10% of the
total number of Common Shares which the Underwriters are obligated to purchase
on such Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Common Shares which such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate number of Common Shares with respect to which such default
occurs is more than the above percentage and arrangements satisfactory to the
Representatives and the Company for the purchase of such Common Shares by other
persons 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 except for the expenses to be paid by the Company pursuant to
Section 6 hereof.
In the event that Common Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its
-27-
28
default.
SECTION 12. Effective Date. This Agreement shall become effective immediately
as to Sections 6, 8, 10, 13 and 14 and, as to all other provisions, (i) if at
the time of execution of this Agreement the Registration Statement has not
become effective, at 2:00 P.M., California time, on the first full business day
following the effectiveness of the Registration Statement, or (ii) if at the
time of execution of this Agreement the Registration Statement has been
declared effective, at 2:00 P.M., California time, on the first full business
day following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 12, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever
may occur first.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this Agreement
shall become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company to any Underwriter (except for
the expenses to be paid or reimbursed by the Company pursuant to Sections 6 and
8 hereof and except to the extent provided in Section 10 hereof) or of any
Underwriter to the Company (except to the extent provided in Section 10
hereof).
(b) This Agreement may also be terminated by you prior to the First
Closing Date by notice to the Company (i) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the NASDAQ National Market, or trading in
securities generally shall have been suspended on either such Exchange or in
the NASDAQ National Market, or a general banking moratorium shall have been
established by federal, New York or California authorities, (ii) if an outbreak
of major hostilities or other national or international calamity or any
substantial change in political, financial or economic conditions shall have
occurred or shall have accelerated or escalated to such an extent, as, in the
judgment of the Representatives, to affect adversely the marketability of the
Common Shares, (iii) if any adverse event shall have occurred or shall exist
which makes untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or Prospectus or which is
not reflected in
-28-
29
the Registration Statement or Prospectus but should be reflected therein in
order to make the statements or information contained therein not misleading in
any material respect, or (iv) if there shall be any action, suit or proceeding
pending or threatened, or there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or any of its subsidiaries or the transactions contemplated by this
Agreement, which, in the reasonable judgment of the Representatives, may
materially and adversely affect the Company's business or earnings and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall be without liability on the
part of any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided in
Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of its or their partners, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 15. Notices. All communications hereunder shall be in writing and, if
sent to the Representatives shall be mailed, delivered or telecopied and
confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: General Counsel, with a copy to Xxxxx Xxxxxxx Rain Xxxxxxx (A
Professional Corporation), 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: Xxx Xxxxxx; and if sent to the Company shall be mailed, delivered
or telecopied and confirmed to the Company at Wolverine World Wide, Inc., 0000
Xxxxxxxxx Xxxxx, X.X., Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx,
General Counsel and Secretary. The Company or you may change the address for
receipt of communications hereunder by giving notice to the others.
SECTION 16. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 11 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 10, and in each case their
respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall
not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
-29-
30
SECTION 17. Representation of Underwriters. You will act as Representatives
for the several Underwriters in connection with all dealings hereunder, and any
action under or in respect of this Agreement taken by you, as Representatives,
will be binding upon all the Underwriters.
SECTION 18. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made
such minor changes (and only such minor changes) as are necessary to make it
valid and enforceable.
SECTION 19. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the laws pertaining to conflicts
of laws) of the State of Michigan.
SECTION 20. General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the singular
and the plural include one another. The section headings in this Agreement are
for the convenience of the parties only and will not affect the construction or
interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a
writing signed by the Company and you.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
WOLVERINE WORLD WIDE, INC.
By:__________________________
President
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
-30-
31
the date first above written.
XXXXXXXXXX SECURITIES
Xxxxxxx Xxxxxx & Xxxxxxxx
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By XXXXXXXXXX SECURITIES
By: _____________________________
Managing Director
-31-
32
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities ................
Xxxxxxx Xxxxxx & Xxxxxxxx ............
_________
TOTAL ......................
=========
-32-
