DRAFT
TOTAL CONTROL PRODUCTS, INC.
3,162,500 Shares(1)
Common Stock
(par value $.01 per share)
______________
Underwriting Agreement
, 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
As representatives of the several
Underwriters named in Schedule I hereto,
▇/▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Total Control Products, Inc., an Illinois corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you and the several Underwriters named in Schedule I hereto (collectively,
the "Underwriters"), for whom you are acting as representatives (the
"Representatives") an aggregate of 1,650,000 shares (the "Company Firm Shares")
and, at the election of the Underwriters, up to 412,500 additional shares (the
"Optional Shares") of common stock of the Company, no par value per share
("Common Stock"), and certain stockholders of the Company named in Schedule II
hereto (the "Selling Stockholders"), propose, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of 1,100,000
shares (the "Selling Stockholder Firm Shares", and together with the Company
Firm Shares, the "Firm Shares") of Common Stock. The Firm Shares and the
Optional Shares which the Underwriters elect to purchase pursuant to Section 3
hereof are herein collectively called the "Shares".
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
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(1) Includes 412,500 shares subject to an option to purchase additional
shares to cover over-allotments.
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement on Form S-1 (File No. 333-______)
(the "Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement including any pre-effective
amendments thereto and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by
the Commission in such form; other than a registration statement, if
any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement and incorporated by reference in the Rule 462(b)
Registration Statement, if any, or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act
is hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 6(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was
declared effective or the Rule 462(b) Registration Statement, if any, at
the time it became effective, each as amended at the time such part of
such registration statement became effective, are hereinafter
collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the
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requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through you expressly for use therein. The Company and the Selling
Stockholders acknowledge that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement;
(c) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an 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, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through you
expressly for use therein;
(d) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the rules and regulations
thereunder which have not been described or filed as required; the
contracts so described in the Prospectus to which the Company or any of
its subsidiaries is a party have been duly authorized, executed and
delivered by the Company or its subsidiaries, constitute valid and
binding agreements of the Company or its subsidiaries and are
enforceable against and by the Company or its subsidiaries in accordance
with their respective terms, and are in full force and effect on the
date hereof; and neither the Company nor any of its subsidiaries, nor,
to
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the best of the Company's knowledge, any other party is in breach of or
default under any of such contracts;
(e) 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 Registration Statement. 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 respective
jurisdiction of organization, each with full power and authority
(corporate and otherwise) to own its properties and conduct its business
as described in the Prospectus, and each has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(f) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, prospects, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(g) Neither the Company nor any subsidiary of the Company owns any
real property; any real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company and its subsidiaries; the Company owns or leases all such
properties as are necessary to its operations as now conducted or as
proposed to be conducted, except where the failure to so own or lease
would not result
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in a material adverse change in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company;
(h) The Company has an authorized capitalization as set forth in
the Prospectus, and all the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform in all material respects to the
description of the Common Stock contained in the Prospectus; all of the
issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and, except as otherwise disclosed in the Prospectus, are
owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims; except as disclosed 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
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; and
the description of the Company's stock option and stock purchase plans
and the options or other rights granted and exercised thereunder set
forth in the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such
plans, options and rights;
(i) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and non-assessable and
will conform in all material respects to the description of the Common
Stock 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 Shares by the Company pursuant to this Agreement; no stockholder
of the Company has any right which has not been waived or terminated to
require the Company to register the sale of any shares of capital stock
owned by such stockholder under the Act in the public offering
contemplated by this Agreement (except with respect to the Shares to be
sold by the Selling Stockholders pursuant to this Agreement); and 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 Shares to be sold by the Company as contemplated herein;
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(j) The Company has full corporate power and authority to enter
into this Agreement, this Agreement has been duly authorized, executed
and delivered by the Company, constitutes a valid and binding obligation
of the Company and is enforceable against the Company in accordance with
its terms;
(k) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Articles of Organization or By-laws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Shares or the consummation by the Company of
the transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Shares by the
Underwriters;
(l) 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 or may be
a party or of which property owned or leased by the Company or any of
its subsidiaries is or may be the subject, or related to environmental
or discrimination matters, which actions, suits or proceedings, could
reasonably be expected, individually or in the aggregate, to prevent or
adversely affect the transactions contemplated by this Agreement or
result in a material adverse change in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company; no labor disturbance
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by the employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is imminent which might be expected to
materially affect adversely such general affairs, management, financial
position, stockholders' equity or results of operations; and 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;
(m) The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities that are necessary to
enable them to own, lease and operate their respective properties and to
carry on their respective businesses as presently conducted and which
are material to the Company and its subsidiaries, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, singly or in the
aggregate, would be expected to materially and adversely affect the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries;
(n) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte & Touche and Price Waterhouse,
who have certified certain financial statements of the Company,
Cincinnati/Dynacomp, Inc. ("Cincinnati/Dynacomp") and ▇▇▇▇▇▇ Industrial
Software Inc. ("▇▇▇▇▇▇"), are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(o) The consolidated financial statements and schedules of the
Company, Cincinnati/Dynacomp and ▇▇▇▇▇▇, and the related notes thereto,
included in the Registration Statement and the Prospectus present fairly
in all material respects the financial position of the Company as of the
respective dates of such financial statements and schedules, and the
results of operations and cash flows of the Company for the respective
periods covered thereby; such statements, schedules and related notes
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis and to the extend indicated in
the Registration Statement or Prospectus, have been certified by the
independent public accountants named in paragraph (n) above; no other
financial statements or schedules are required to be included in the
Registration Statement; and the selected financial data set forth in the
Prospectus
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under the captions "Capitalization" and "Selected Consolidated Financial
Data" fairly present in all material respects the information set forth
therein on the basis stated in the Registration Statement; the pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly in all material
respects the information shown therein, have been prepared in accordance
with the rules and regulations under the Act and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein;
(p) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient legal or
contractual rights to use the trademarks, trade names, patent rights,
copyrights, licenses, approvals and governmental authorizations to
conduct their business as now conducted; the Company has no knowledge of
any material infringement by the Company or any of its subsidiaries of
trademark, trade name rights, patent rights, copyrights, licenses, trade
secret or other similar rights of others; and there is no claim being
made against the Company regarding trademark, trade name, patent,
copyright, license, trade secret or other infringement which could have
a material adverse effect on the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries;
(q) The Company and each of its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown as due thereon, except in cases where the
Company has received an extension to file such return or is contesting
the payment of such taxes in good faith and has established sufficient
reserves therefor, and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company or any of its subsidiaries which could materially and adversely
affect the general affairs, management, financial position,
stockholders' equity or results of operation of the Company;
(r) The Company is not, and upon the consummation of the
transactions contemplated by this Agreement and the application by the
Company of the net proceeds from the sale of Shares by it hereunder as
described in the Prospectus under the caption "Use of Proceeds" will not
be, an
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"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an investment company, as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) Each of the Company and its subsidiaries maintains insurance
of the types and in the amounts which it deems adequate for its
business, all of which insurance is in full force and effect;
(t) 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 foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
foreign, 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;
(u) The Company has not taken and will not take, directly or
indirectly through any of its directors, officers or controlling
persons, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares; and
(v) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to register the Common Stock, has filed an application
to list the Common Stock on the Nasdaq National Market and has received
notification that the listing has been approved, subject to notice of
issuance of the Shares.
2. REPRESENTATIONS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder represents and warrants to, and agrees with, each of the
Underwriters that:
(a) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power-of-Attorney and Custody Agreement (the "Custody Agreement")
hereinafter referred to, and for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and
such Selling Stockholder has full right, power and authority
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to enter into this Agreement and the Custody Agreement and to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder;
(b) This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by such Selling Stockholder and each
such document constitutes a valid and binding obligation of such Selling
Stockholder, enforceable in accordance with its terms;
(c) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is
required in connection with the sale of the Shares by such Selling
Stockholder or the consummation by such Selling Stockholder of the
transactions on its part contemplated by this Agreement and the Custody
Agreement, except such as have been obtained under the Act or the rules
and regulations thereunder and such as may be required under state
securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the
Shares;
(d) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the performance by such Selling Stockholder of this
Agreement and the Custody Agreement and the consummation of the
transactions contemplated hereby and thereby will not result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation
under, any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling Stockholder
or any of its properties is bound or affected, [or violate or conflict
with the Certificate of Incorporation or By-laws of such Selling
Stockholder] or any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to
such Selling Stockholder;
(e) Such Selling Stockholder has, and at the Closing Date will
have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, will pass to
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each of the several Underwriters who have purchased such Shares in good
faith and without notice of any such lien, encumbrance, equity or claim
or any other adverse claim within the meaning of the Uniform Commercial
Code;
(f) Such Selling Stockholder will not, directly or indirectly,
offer, sell or otherwise dispose of any shares of Common Stock within
180 days after the date of the Prospectus otherwise than hereunder or
with the written consent of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.;
(g) Such Selling Stockholder has not taken and will not at any
time take, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result in, or which will constitute,
stabilization of the price of shares of Common Stock to facilitate the
sale or resale of any of the Shares;
(h) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(i) Such Selling Stockholder has reviewed the Registration
Statement and Prospectus and, although such Selling Stockholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of such
Selling Stockholder that would lead such Selling Stockholder to believe
that on the Effective Date, the Registration Statement contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the
Prospectus contained and, at each Time of Delivery, contains any untrue
statement of a material fact or omitted or omits to state
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any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, each Selling
Stockholder agrees to deliver to you prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
Each Selling Stockholder represents and warrants that one or more
certificates in negotiable form representing and/or convertible debentures or
shares exchangeable for shares of common stock of the Company convertible
into all of the Shares to be sold by such Selling Stockholder (together, in
the case of the Convertible Debenture or the ▇▇▇▇▇▇ Exchangeable Shares, as
defined in the Registration Statement, with a conversion or exchange form
duly executed) have been placed in custody under the Custody Agreement, in
the form heretofore furnished to you, duly executed and delivered by such
Selling Stockholder to the Custodian (as defined in the Custody Agreement),
and that such Selling Stockholder has duly executed and delivered a
power-of-attorney, in the form heretofore furnished to you and included in
the Custody Agreement (the "Power-of-Attorney"), appointing
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,] ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and each of them,
as such Selling Stockholder's attorney-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement on behalf of such Selling
Stockholder, to determine (subject to the provisions of the Custody
Agreement) the purchase price to be paid by the Underwriters to such Selling
Stockholder as provided in Section 3 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise to act
on behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
Each Selling Stockholder specifically agrees that the Shares represented
by the certificates (or the Convertible Debenture or the ▇▇▇▇▇▇ Exchangeable
Shares) held in custody for such Selling Stockholder under the Custody
Agreement are subject to the interests of the Underwriters hereunder, and
that the arrangements made by such Selling Stockholder for such custody, and
the appointment by such Selling Stockholder of the Attorneys-in-Fact by the
Power-of-Attorney, are to that extent irrevocable. Each Selling Stockholder
specifically agrees that the obligations of such Selling Stockholder
hereunder shall not be terminated by
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operation of law, whether by the death or incapacity of such Selling
Stockholder or, in the case of an estate or trust, by the death or incapacity
of any executor or trustee or the termination of such estate or trust, or in
the case of a partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other event. If such
Selling Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be dissolved, or if such
Corporation or partnership should be dissolved, or if any other such event
should occur, before the delivery of the Shares hereunder, certificates
representing the Shares to be sold by such Selling Stockholder shall be
delivered by or on behalf of such Selling Stockholder in accordance with the
terms and conditions of this Agreement and of the Custody Agreement, and
actions taken by the Attorneys-in-Fact pursuant to the Power-of-Attorney
shall be as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such death,
incapacity, termination, dissolution or other event.
3. SHARES SUBJECT TO SALE. (a) On the basis of the representations,
warranties and agreements of the Company and the Selling Stockholders
contained herein, and subject to the terms and conditions of this Agreement,
(i) the Company agrees to issue and sell the Company Firm Shares to the
several Underwriters, (ii) the Selling Stockholders agree to sell the Selling
Stockholder Firm Shares in the respective amounts shown on Schedule II to the
several Underwriters, and (iii) each of the Underwriters agrees, severally
and not jointly, to purchase from the Company and the Selling Stockholders,
at a purchase price per share of $ , the respective number of Firm Shares
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares by a fraction, the numerator
of which is the aggregate number of Firm Shares to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the aggregate number of Firm Shares to
be purchased by all the Underwriters and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Shares
as provided below, (i) the Company agrees to issue and sell the Optional
Shares to the several Underwriters, and (ii) each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase
price per share set forth in clause (a) of this Section 3, that portion of
the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of
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Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of the Optional Shares which all
of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 412,500 Optional Shares at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from you to the Company,
given at any time (but not more than once) within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number
of Optional Shares to be purchased and the date on which such Optional Shares
are to be delivered, as determined by you but in no event earlier than the
First Time of Delivery (as defined in Section 5 hereof) or, unless you and
the Company otherwise agree in writing, earlier than two or later than three
business days after the date of such notice.
4. OFFERING. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
5. CLOSING. Certificates in definitive form for the Shares to be
purchased by each Underwriter hereunder, and in such denominations and
registered in such names as ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. may request upon at
least forty-eight hours' prior notice to the Company, shall be delivered by
or on behalf of the Company to you for the account of such Underwriter,
against payment by such Underwriter or on its behalf of the purchase price
therefor by wire transfer or certified or official bank check or checks
payable in same day funds, payable to the order of the Company and of the
Custodian, on behalf of the Selling Stockholders, respectively, in New York
Clearing House funds, all at the office of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
Boston time, on such date, not later than the third (or, if the Firm Shares
are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after
4:30 P.M. Washington, D.C. time, the fourth) full business day following the
first date that any of the Shares are released by you for sale to the public,
or such other time and date as you and the Company may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., Boston time, on the date
specified by you in the written notice given by you of the Underwriters'
election to purchase such
-14-
Optional Shares, or at such other time and date as you and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is herein called
the "Second Time of Delivery," and each such time and date for delivery is
herein called a "Time of Delivery." Such certificates will be made available
for checking and packaging at least twenty four hours prior to each Time of
Delivery at such location as you may specify.
6. COVENANTS OF THE COMPANY. The Company agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form reasonably approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when the Registration Statement,
or any amendment thereto, has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be
-15-
necessary to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as you may from time to time reasonably request, and if
at any time within the nine-month period referred to in Section 10(a)(3)
of the Act, the delivery of a prospectus is required in connection with
the offering or sale of the Shares, and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time after such nine-month period, upon your request but
at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than fifteen months after the
effective date of the Registration Statement (as defined in Rule
158(c)), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including at the
option of the Company Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of
the Company's equity securities or any other securities convertible into
or exchangeable for its Common Stock or other equity securities, other
than options to purchase shares of Common Stock under the stock
-16-
option plans described in the Prospectus under the caption "Management -
Stock Option Plans" at an exercise price not less than the initial
public offering price, without the prior written consent of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.;
(f) To the extent and during the period required by the Exchange
Act, the Nasdaq National Market or any national securities exchange on
which any class of securities of the Company is listed, to furnish to
its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flow of the Company and its
consolidated subsidiaries certified by independent public accountants)
and, to furnish or make available to its stockholders, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders generally,
and deliver to you as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission, the
Nasdaq National Market or any national securities exchange on which any
class of securities of the Company is listed;
(h) To use the net proceeds acquired by it from the sale of the
Shares in the manner specified in the Prospectus under the caption "Use
of Proceeds" and in a manner such that the Company will not become an
"investment company" as that term is defined in the Investment Company
Act;
(i) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act;
(j) Not to file with the Commission any registration statement on
Form S-8 relating to shares of its Common Stock prior to 180 days after
the effective date of the Registration Statement; and
(k) Not to accelerate the vesting of any option issued under any
stock option plan such that any such option may be exercised within 180
days from the date of the Prospectus.
-17-
7. COVENANTS OF THE SELLING STOCKHOLDER. Each Selling Stockholder
agrees to pay or cause to be paid all taxes, if any, on the transfer and sale
of the Shares to be sold by such Selling Stockholder hereunder, fees and
expenses, if any, of counsel and accountants specially retained by such
Selling Stockholder, the fees and expenses of the Custodian, if any, and its
pro rata share (based on the percentage which the number of Shares sold by
such Selling Stockholder bears to the total number of Shares sold) of all
underwriting discounts and commissions.
8. EXPENSES. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or producing any Agreement among Underwriters, this Agreement,
the Blue Sky Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 6(b) hereof, including the fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) the filing
fees and the reasonable fees and expenses of counsel to the Underwriters
incident to securing any required review by the NASD of the terms of the sale
of the Shares; (v) the cost of preparing stock certificates; (vi) the cost
and charges of any transfer agent or registrar; and (vii) all other costs and
expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, Section 10 and Section 13
hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers
they may make.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and the
Selling Stockholders herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company and the Selling Stockholders shall
each have performed all of their respective
-18-
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 6(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to your reasonable satisfaction;
(b) ▇▇▇▇ and ▇▇▇▇, counsel to the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to this Agreement, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) ▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Illinois, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Registration Statement and Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and to its knowledge all of the issued shares of
capital stock of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and, to the best of
such counsel's knowledge, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase any securities which have not been waived; the Shares
have been duly authorized and when issued and paid for as
contemplated by this Agreement will be validly issued, fully paid
and non-assessable; and the Shares conform in all material respects
to the description of the Common Stock contained in the Prospectus;
no preemptive
-19-
rights or other rights to subscribe for or purchase exist with
respect to the issuance and sale of the Shares by the Company
pursuant to this Agreement arising by operation of law, under the
charter or by-laws of the Company or, to the best of such counsel's
knowledge, otherwise; to the best of such counsel's knowledge, no
stockholder of the Company has any right which has not been waived
to require the Company to register the sale of any shares of
capital stock owned by such stockholder under the Act in the public
offering contemplated by this Agreement (except with respect to the
Shares to be sold by such Selling Stockholders pursuant to this
Agreement); and 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 Shares to be sold by the
Company as contemplated herein;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or
leases real property or has employees (such counsel being entitled
to rely in respect of the opinion in this clause upon certificates
of public officials and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified
in relying upon such certificates);
(iv) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of organization; and all of the issued
shares of capital stock of each such subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable,
and, except as otherwise disclosed in the Prospectus, are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying
upon such opinions and certificates);
(v) To the best of such counsel's knowledge and
-20-
other than as set forth in the Prospectus, there are no legal or
governmental proceedings, actions or suits pending or threatened to
which the Company or any of its subsidiaries is or may be a party
or of which property owned or leased by the Company or any of its
subsidiaries is or may be the subject, or related to environmental
or discrimination matters, which actions, suits or proceedings,
could, if determined adversely to the Company, individually or in
the aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or result in a material adverse
change in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company or its subsidiaries, taken as a whole; no labor disturbance
by the employees of the Company or any of its subsidiaries exists
or is imminent which might be expected to affect adversely such
general affairs, management, financial position, stockholders'
equity or results of operations; and 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 governmental body;
(vi) The Company has full corporate power and authority to
enter into this Agreement and this Agreement has been duly
authorized, executed and delivered by the Company; this Agreement
is a valid and binding agreement of the Company, and is enforceable
against the Company in accordance with its terms.
(vii) The issuance and sale of the Shares being delivered at
such Time of Delivery by the Company and the compliance by the
Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
agreement listed as an exhibit to the Registration Statement or
described in the Registration Statement or Prospectus, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
subsidiary or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
-21-
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Act of the Shares, and such consents, approval, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the purchase and distribution of the Shares by the
Underwriters;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents required to be described in the
Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and regulations
thereunder which have not been described or filed as required; the
contracts so described in the Prospectus are in full force and
effect on the date hereof; and neither the Company nor any of its
subsidiaries is in breach of or default under any such contract;
(x) The statements under the captions "Risk Factors -
Preferred Stock; Staggered Board and Anti-Takeover Effects of
Corporate Provisions," "Risk Factors -Shares Eligible for Future
Sale," "Business - Supply Relationship with Digital Electronics,"
"Recent Acquisitions," "Certain Transactions," "Management -
Employment Agreements," "Management - Stock Option Plans,"
"Description of Capital Stock" and "Shares Eligible for Future
Sale" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all
material respects, the information called for with respect to such
documents and matters;
(xi) No transfer taxes are required to be paid in connection
with the sale and delivery of the Shares to the Underwriters
hereunder;
(xii) The Company is not, and upon the consummation of the
transactions contemplated by this Agreement and the application by
the Company of the net proceeds from the sale of Shares by it
hereunder as described in the Prospectus under the caption "Use of
-22-
Proceeds" will not be, an "investment company" or an "affiliated
person" of, or "promoter" or principal underwriter" for, an
"investment company" as defined in the Investment Company Act;
(xiii) The Shares have been duly authorized for inclusion on
the Nasdaq National Market System, subject to notice of issuance;
(xiv) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company
prior to such Time of Delivery (other than the financial
statements, financial data and related schedules 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 thereunder; and
(xv) The Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued by the Commission nor has any proceeding been instituted or
contemplated for that purpose under the Act; and the Prospectus has
been filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations under the Act within the time period required
thereby.
Such counsel shall also state that they have participated in the
preparation of the Registration Statement and Prospectus and nothing has
come to their attention that would give them reason to believe that, as
of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements, financial data and related
schedules therein, as to which such counsel need express no opinion)
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 not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements, financial data and related schedules therein, as to which
such counsel need express no opinion) 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 in which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or
-23-
the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements, financial data and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required.
(d) [▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇], special counsel to the Selling
Stockholders, shall have furnished to you their written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of each Selling
Stockholder; the Custodian has been duly and validly authorized to
act as the custodian of the Shares to be sold by each Selling
Stockholders; to the best of such counsel's knowledge, the
performance of this Agreement and the Custody Agreement and the
consummation of the transactions therein contemplated by such
Selling Stockholders does not conflict with, result in a breach of,
or constitute a default under, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture,
note agreement or other evidence of indebtedness, lease, contract
or other agreement or instrument to which such Selling Stockholder
is a party or by which such Selling Stockholder or any of his
properties are bound or affected, or violate or conflict with (i)
the Certificate of Incorporation or By-laws of such Selling
Stockholder, (ii) any judgment, ruling, decree or order known to
such counsel or (iii) to the best of such counsel's knowledge, any
statute, rule or regulation of any court or other governmental
agency or body applicable to such Selling Stockholder (except that
such counsel need express no opinion as to state securities or Blue
Sky laws or as to compliance with the antifraud provisions of
federal and state securities laws); and to the best of such
counsel's knowledge, no consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental
agency or body is required for
-24-
consummation by such Selling Stockholder of the transactions on its
part contemplated by this Agreement and the Custody Agreement,
except such as may be required under state securities or Blue Sky
laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares (as to
which such counsel need express no opinion) and such as have been
obtained or made under the Act or the rules and regulations
thereunder;
(ii) Each Selling Stockholder has full corporate power and
authority to enter into this Agreement and the Custody Agreement
and to sell, transfer and deliver the Shares to be sold by such
Selling Stockholder; immediately prior to the date hereof, such
Selling Stockholder was the sole registered owner of the Shares to
be sold by such Selling Stockholder on the date hereof; upon
registration of the Shares to be sold by such Selling Stockholder
in the names of the Underwriters in the stock records of the
Company, assuming the Underwriters purchased such Shares in good
faith and without notice of any adverse claim within the meaning of
the Uniform Commercial Code, the Underwriters will have acquired
all rights of such Selling Stockholder in such Shares free of any
adverse claim, any lien in favor of the Company and any
restrictions on transfer imposed by the Company; and
(iii) Each of this Agreement and the Custody Agreement is a
valid and binding agreement of such Selling Stockholder,
constitutes a valid and binding obligation of such Selling
Stockholder and is enforceable against such Selling Stockholder in
accordance with its terms.
(e) On the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to
the Registration Statement and also at each Time of Delivery, each of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte & Touche and Price Waterhouse shall have
furnished to you a letter or letters, dated the respective date of
delivery thereof, in form and substance satisfactory to you;
(f) (i) Neither the Company nor any of its subsidiaries have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
-25-
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(g) On or after the date hereof there shall not have occurred any
of the following: (i) 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 over the counter market by the NASD,
or trading in securities generally shall have been suspended on either
such Exchange or in the over the counter market by the NASD, or a
general banking moratorium shall have been established by federal or New
York authorities, (ii) 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
Shares, or (iii) 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 judgment of the
Representatives, may materially and adversely affect the Company's
business or earnings and make it impracticable or inadvisable to offer
or sell the Shares;
(h) The Shares to be sold by the Company at such Time of Delivery
shall have been accepted for quotation, subject to notice of issuance,
on the Nasdaq National Market; and
(i) Each director and executive officer of the Company
-26-
and stockholders of the Company's capital stock or of securities
convertible into or exchangeable for the Company's capital stock holding
at least the number of shares described in the Prospectus, [each holder
of ▇▇▇▇▇▇ Exchangeable Shares] and holders of options to purchase at
least the number of shares of Common Stock as described in the
Prospectus shall have executed and delivered to you agreements in which
such holder undertakes, for 180 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of the
Company's equity securities or any other securities convertible into or
exchangeable for its Common Stock or other equity securities, without
the prior written consent of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.; and
(j) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to you at such Time of Delivery certificates
of officers of the Company and of the Selling Stockholders respectively,
satisfactory to you, as to the accuracy of the representations and
warranties of the Company and of such Selling Stockholders,
respectively, herein at and as of such Time of Delivery, as to the
performance by the Company and such Selling Stockholders of all of their
obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request and
the Company shall have furnished or caused to be furnished certificates
as to the matters set forth in subsections (a) and (g) of this Section,
and as to such other matters as you may reasonably request.
10. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Selling
Stockholders, jointly and severally, will indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement 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, in light of the circumstances in
which they were made, not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or
-27-
claim as such expenses are incurred; provided, however, that the Company and
the Selling Stockholders shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you expressly for use therein; and, provided further,
that the aggregate liability of each Selling Stockholder under the indemnity
agreement in this Section 8 (including the contribution agreement set forth
in Section 8(d)) shall not exceed the total initial public offering price of
the Shares sold by such Selling Stockholder under this Agreement, less
underwriters' discounts.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities
to which the Company or such Selling Stockholder may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement 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, in light of the
circumstances in which they were made, 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 any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the
Company or such Selling Stockholder in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such
-28-
subsection except to the extent the indemnified party is materially
prejudiced as a proximate result of such failure and in any event, shall not
relieve the indemnifying party from any liability which it may have otherwise
then on account of this indemnification agreement. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative
-29-
benefits but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders, respectively, bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Selling Stockholders on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim,
except as limited by (c) above. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under
this Section 10 shall be in addition to any
-30-
liability which the Company and the Selling Stockholders may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriter under this Section 10 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
11. TERMINATION. (a) If any Underwriter shall default in its obligation
to purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Shares, then the Company shall be entitled
to a further period of thirty-six hours within which to procure another party
or other parties satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Shares, or the
Company notifies you that it has so arranged for the purchase of such Shares,
you or the Company shall have the right to postpone such Time of Delivery for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to
this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase
the number of Shares which such Underwriter agreed to purchase hereunder at
such Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares
which such Underwriter agreed to purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve
-31-
a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company
to sell the Optional Shares) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 8 hereof and the indemnity and contribution agreements in Section 10
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
12. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company
and shall survive delivery of and payment for the Shares.
13. EXPENSES UPON TERMINATION. If this Agreement shall be terminated
pursuant to Section 11 hereof, the Company shall not then be under any
liability to any Underwriter except as provided in Section 8 and Section 10
hereof; but, if for any other reason this Agreement is terminated, other than
due to (i) any material default or material breach of this Agreement by any
Underwriter, or (ii) any event identified under Section 9(g) hereof, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Shares not so delivered, but the
Company shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Section 8 and
Section 10 hereof.
14. NOTICE. In all dealings hereunder, you shall act on
-32-
behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by you jointly or by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Inc. on behalf of you as the Representatives; and in all dealing with any
Selling Stockholder hereunder, you and the Company shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of such
Selling Stockholder made or given by any or all of the Attorneys-in-Fact for
such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the Representatives in care of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: President; and if to the Selling
Stockholders shall be delivered or sent by mail, telex or facsimile
transmission to the Attorneys-in-Fact, c/o the Company; provided, however,
that any notice to an Underwriter pursuant to Section 10(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriter's Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
15. MISCELLANEOUS. (a) This Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters and the Company and, to the
extent provided in Sections 10 and 12 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of
this Agreement. No purchaser of any of the Shares from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
(b) Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts
-33-
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters
and the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted
to the Company and the Selling Stockholders for examination, upon request,
but without warranty on your part as to the authority of the signors thereof.
-34-
Any person executing and delivering this Agreement as Attorney-in-Fact
for the Selling Stockholders represents by so doing that he has been duly
appointed as Attorney-in-Fact by the Selling Stockholders pursuant to a
validly existing and binding Power-of-Attorney which authorizes such
Attorney-in-Fact to take such action.
Very truly yours,
TOTAL CONTROL PRODUCTS, INC.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
SELLING STOCKHOLDERS
By:
-------------------------
Name:
-----------------------
Title: Attorney-in-Fact
Accepted as of the date
hereof at Boston, Massachusetts
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
-----------------------------
(▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
On behalf of each of
the Underwriters)
-35-
SCHEDULE I
Number
of
Optional
Total Shares
Number to be
of Purchased
Firm if
Shares Maximum
to be Option
Purchased Exercised
--------- ---------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.....
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc........
Total........................
-36-
SCHEDULE II
Number of Firm
Shares to be
Sold by Selling
Stockholder
-----------------
Name of Selling Stockholder
---------------------------
[ ]...................
[ ]...................
Total........................
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