ENGINEERING ANIMATION, INC.
1,102,937 Shares of Common Stock
Underwriting Agreement
March 18, 1998
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The selling stockholders listed under the heading "Management Selling
Stockholders" on Schedule I hereto (the "Management Selling Stockholders")
and the selling stockholders listed under the heading "Non-management Selling
Stockholders" on Schedule I hereto (the "Non-Management Selling
Stockholders," and, together with the Management Selling Stockholders, the
"Selling Stockholders") propose to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative") an aggregate of 960,000 shares of
common stock, par value $.01 per share, of Engineering Animation, Inc., a
Delaware corporation (the "Company") (the "Underwritten Shares"), and for the
sole purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, certain of the
Selling Stockholders propose to sell to the several Underwriters up to an
additional 142,937 shares of common stock, par value $.01 per share, of the
Company (the "Option Shares"). The Underwritten Shares and the Option Shares
are herein referred to as the "Shares". The shares of common stock of the
Company, $.01 par value per share, are herein referred to as the "Common
Stock". The Common Stock, including the Shares, will have attached thereto
rights (the "Rights") to purchase one one-hundredth of a share of the
Company's Series A Junior Participating Preferred Stock for a price of $50.00
per one hundredth of a share. If you are the only firm listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to you.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is 333-47809) on Form S-3, relating to
shares of Common Stock, including the attached Rights, to be sold from time
to time by certain persons, including the Selling Stockholders. The Company
also has filed with, or proposes to file with, the Commission pursuant to
Rule 424 under the Securities Act a prospectus supplement specifically
relating to the Shares. The registration statement as amended to the date of
this
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Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus covering the Common Stock and associated Rights is
hereinafter referred to as the "Basic Prospectus". The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the Shares
in the form first used to confirm sales of the Shares is hereinafter referred
to as the "Prospectus". If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
Any reference in this Agreement to the Registration Statement, the Basic
Prospectus, any preliminary form of Prospectus (a "preliminary prospectus")
previously filed with the Commission pursuant to Rule 424 or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act
which were filed under the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") on or before the date of this Agreement or the date of the
Basic Prospectus, any preliminary prospectus or the Prospectus, as the case
may be; and any reference to "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include any
documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the
Prospectus, as the case may be, which are deemed to be incorporated by
reference therein.
The Company and each Selling Stockholder hereby agree, severally and not
jointly, with the Underwriters as follows:
1. Each Selling Stockholder agrees to sell to the several Underwriters as
hereinafter provided the number of Underwritten Shares set forth opposite such
Selling Stockholder's name in Schedule I hereto, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Selling Stockholders the Underwritten Shares at a purchase price per
share (the "Purchase Price") of $43.375. In addition, each Selling Stockholder
agrees to sell to the several Underwriters as hereinafter provided the number of
Option Shares set forth opposite such Selling Stockholder's name in Schedule I
hereto, and the Underwriters on the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, shall have
the option to purchase, severally and not jointly, from the Selling Stockholders
up to an aggregate of 142,937 Option Shares at the Purchase Price, for the sole
purpose of covering over-allotments (if any) in the sale of Underwritten Shares
by the several Underwriters.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
aggregate number of Underwritten
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Shares set forth opposite the name of such Underwriter in Schedule II hereto
(or such number increased as set forth in Section 11 hereof) bears to the
aggregate number of Underwritten Shares being purchased from the Selling
Stockholders by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Representative in its
sole discretion shall make. If any Option Shares are to be purchased, the
number of Option Shares to be sold by each Selling Stockholder shall be the
number of Option Shares which bears the same ratio to the aggregate number of
Option Shares being purchased as the number of Selling Stockholders Option
Shares set forth opposite the name of such Selling Stockholder in Schedule I
hereto, bears to the aggregate number of Option Shares being offered by the
Selling Stockholders, subject, however, to such adjustments to eliminate any
fractional Shares as the Representative in its sole discretion shall make and
further subject to the number of Selling Stockholders Option Shares set forth
opposite the name of such Selling Stockholder in Schedule I hereto.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but no more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representative to the Company
and to each Selling Stockholder that is selling Option Shares. Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised and the date and time when the Option Shares are to be delivered
and paid for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of such
notice (unless such time and date are postponed in accordance with the
provisions of Section 11 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. The Company and the Selling Stockholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
this Agreement becomes effective as in the judgment of the Underwriters is
advisable and (ii) initially to offer the Shares upon the terms set forth in the
Prospectus.
3. Payment for the Underwritten Shares and the Option Shares, if any,
shall be made to the Custodian on behalf of each Selling Stockholder or to its
order, in each case, by wire transfer of immediately available funds at the
office of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 9:00 A.M., Chicago time, in the case of the Underwritten
Shares, on March 24, 1998, or at such other time on the same or such other date,
not later than the fifth Business Day thereafter, as the Representative, the
Company and the Selling Stockholders may agree upon in writing or, in the case
of the Option Shares, on the date and time specified by the Representative in
the written notice of the Underwriters' election to purchase such Option Shares.
The time and date of such payment for the Underwritten Shares are referred to
herein as the Closing Date and the time and date for such payment for the Option
Shares, if other than the Closing Date, are herein referred to as the Additional
Closing Date. As
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used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representative for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representative shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by Selling Stockholders. The
certificates for the Shares will be made available for inspection and packaging
by the Representative at the office of ▇.▇. ▇▇▇▇▇▇ Securities, Inc., ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ not later than 12:00 noon, New York time, on the
Business Day prior to the Closing Date or the Additional Closing Date, as the
case may be.
4. The Company represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission; and the Registration Statement and
the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will comply, as
the case may be, in all material respects with the Securities Act, and do
not and will not, as of the applicable effective date of the Registration
Statement and any amendment thereto and as of the date of 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 light of the
circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented at the Closing Date, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
foregoing representations and warranties shall not apply to any statements
or omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
the Representative expressly for use therein;
(b) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such
documents contained an untrue statement of a material fact
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or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendments or supplements thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and will 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 light of the
circumstances under which they were made, not misleading;
(c) the financial statements, and the related notes thereto included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations and changes in its cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and
the supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated
therein; and the pro forma financial information, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus has been prepared in accordance with the
applicable requirements of the Securities Act and the Exchange Act, as
applicable, and is based upon good faith estimates and assumptions believed
by the Company to be reasonable;
(d) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
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,
business, 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;
and except as set forth or contemplated in the Prospectus neither the
Company nor any of its subsidiaries has entered into any transaction
or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and 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
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owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(f) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct is business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties or conducts any business so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the Company
and its subsidiaries taken as a whole; and all the outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable, and (except in the
case of foreign subsidiaries, for directors' qualifying shares) are owned
by the Company directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(g) this Agreement has been duly authorized, executed and delivered
by the Company;
(h) the authorized capital stock of the Company conforms as to legal
matters to the description thereof set forth in or incorporated by
reference into the Registration Statement and the Prospectus, and all of
the outstanding shares of capital stock of the Company, including the
Shares to be sold by the Selling Stockholders to the Underwriters
hereunder, have been duly authorized and validly issued, are fully-paid and
non-assessable and are not subject to any preemptive or similar rights;
and, except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of
the Company, any such convertible or exchangeable securities or any such
rights, warrants or options;
(i) the Rights attached to the Shares have been duly authorized and
are validly issued;
(j) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would not be, in violation of or
in default under, its Certificate of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan
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agreement or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them or any of
their respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company
and its subsidiaries taken as a whole; the issue and sale of the Shares
and the performance by the Company of its obligations under this
Agreement and the consummation of the transactions contemplated herein
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material 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 any such action result in any violation of the provisions of
the Certificate of Incorporation or the By-Laws of the Company or any of
its subsidiaries or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its subsidiaries or any of their
respective 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 such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(k) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries or
any of their respective properties or to which the Company or any of its
subsidiaries is or may be a party or to which any of their respective
properties is or may be the subject which, if determined adversely to the
Company or any of its subsidiaries, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the general
affairs, business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken
as a whole and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; and there are no 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;
(l) immediately after any sale of Shares by the Selling Stockholders
hereunder, the aggregate number of shares of Common Stock which have been
sold
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pursuant to the Registration Statement will not exceed the number of
shares of Common Stock registered under the Registration Statement;
(m) the Company and its subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to
in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are held
by them under valid, existing and enforceable leases with such exceptions
as are not material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company or its subsidiaries;
(n) no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus which is not
so described;
(o) except for registration rights granted pursuant to two
registration rights agreements, each dated November 25, 1997, to recipients
of Common Stock in connection with the acquisition by the Company of
Rosetta Technologies, Inc. and Technology Company Ventures, L.L.C. and
registration rights granted pursuant to a registration rights agreement,
dated November 26, 1997, to recipients of Common Stock in connection with
the acquisition by the Company of Cimtech, Inc., no person has the right to
require the Company to register any securities for offering and sale under
the Securities Act by reason of the filing of the Registration Statement
with the Commission or the issue and sale of the Shares;
(p) the Company and its subsidiaries own or possess, or can acquire
on reasonable terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names presently employed by them in
connection with the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a any material adverse
effect on the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole;
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(q) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessment received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been or
might reasonably be expected to be asserted or threatened against the
Company or any of its subsidiaries;
(r) the Company is not, and after completion of the sale of the
Shares contemplated hereby, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
(s) the Shares are listed on the Nasdaq National Market.
5. Each Selling Stockholder, severally and not jointly, represents and
warrants to each Underwriter that:
(a) the execution and delivery of this Agreement, the sale of such
Selling Stockholders Underwritten Shares and, if applicable, Selling
Stockholders Option Shares and the performance by such Selling Stockholder
of its obligations under this Agreement, and the consummation of the
transactions contemplated herein will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject;
(b) such Selling Stockholder has and will have on the Closing Date
and, if applicable, the Additional Closing Date good and marketable title
to the Shares to be sold by such Selling Stockholder hereunder, free and
clear of any pledge, lien, security interest, encumbrance, claim or equity
other than pursuant to this Agreement; such Selling Stockholder has full
right, power and authority to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder; and upon delivery of the Shares
to be sold by such Selling Stockholder hereunder and payment of the
Purchase Price therefor as herein contemplated, each of the Underwriters
will receive good and marketable title to the Shares purchased by it from
such Selling Stockholder, free and clear of any pledge, lien security
interest, encumbrance, claim or equity;
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(c) such Selling Stockholder has duly executed and delivered in the
form heretofore furnished to the Underwriters a Power of Attorney with
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, as attorneys-in-fact (each, an
"Attorney-in-Fact"), and a Custody Agreement with First Chicago Trust
Company of New York, as custodian (the "Custodian") and such agreements are
valid and binding agreements of such Selling Stockholder enforceable
against such Selling Stockholder in accordance with their terms; the
Attorneys-in-Fact, or either of them, are authorized to execute and deliver
this Agreement on behalf of such Selling Stockholder, to determine the
Purchase Price to be paid by the Underwriters to such Selling Stockholder,
to authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder, to accept payment therefor, and otherwise to act on
behalf of such Selling Stockholder in connection with this Agreement;
(d) all authorizations, approvals and consents necessary for the
execution and delivery by such Selling Stockholder of the Power of Attorney
and the Custody Agreement, the execution and delivery by or on behalf of
such Selling Stockholder of this Agreement, and the sale and delivery of
the Shares to be sold by such Selling Stockholder hereunder (except such
consents, approvals, authorizations, registrations or qualifications as may
be required under the Securities Act and the state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters) have been obtained and are in full force and effect; and such
Selling Stockholder has the full right, power and authority to enter into
this Agreement and such Power of Attorney and Custody Agreement and to
sell, transfer and deliver the Shares to be sold by such Selling
Stockholder;
(e) all information furnished in writing to the Company by such
Selling Stockholder or on such Selling Stockholder's behalf for use in
connection with the preparation of the Registration Statement and
Prospectus (including, without limiting the generality of the foregoing,
all representations and warranties of such Selling Stockholder in the Power
of Attorney and Custody Agreement) is true and correct and does not omit to
state any material fact necessary to be stated therein in order to make
such information not misleading;
(f) if such Selling Stockholder is a Management Selling Stockholder,
such Selling Stockholder has no reason to believe that any of the
representations and warranties of the Company set forth in Section 4 of
this Agreement is or will be untrue or inaccurate in any material respect;
(g) such Selling Stockholder is not prompted to sell the Shares to be
sold by such Selling Stockholder hereunder by any information concerning
the Company which is not set forth in the Prospectus;
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(h) such Selling Stockholder has not taken, and will not take,
directly or indirectly, 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;
(i) certificates in negotiable form for all Shares to be sold
hereunder by such Selling Stockholder have been placed in custody with the
Custodian for the purpose of effecting delivery hereunder; and
(j) any statements in the Registration Statement and the Prospectus,
insofar as they relate to such Selling Stockholder, do not and will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
6. The Company covenants and agrees with the several Underwriters as
follows:
(a) to file the Prospectus in a form approved by you pursuant to Rule
424 under the Securities Act no later than the Commission's close of
business on the second Business Day following the date of determination of
the offering price of the Shares or, if applicable, such earlier time as
may be required by Rule 424(b);
(b) to deliver, at the expense of the Company, to the Representative
and counsel for the Underwriters, a signed copy of the Registration
Statement (as originally filed) and each amendment thereto, in each case
including exhibits and documents incorporated by reference therein and,
during the period mentioned in paragraph (e) below, to furnish each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as you may reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
you a copy of any proposed amendment or supplement to the Registration
Statement or the Prospectus, for your review, and not file any such
proposed amendment or supplement to which you reasonably object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares, and during such period, to advise
you promptly, and to confirm such advice in writing, (i) when any amendment
to the Registration Statement shall have become effective, (ii) of any
request by the
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Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that purpose and (iv) of
the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as possible
the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Representative will furnish to the Company) to which Shares may have
been sold by the Representative on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Shares and to pay all
fees and expenses (including fees and disbursements of counsel to the
Underwriters) reasonably incurred in connection with such qualification;
PROVIDED that the Company shall not be required to file a general consent
to service of process in any jurisdiction;
(g) to make generally available to its security holders and to the
Representative as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company occurring after the "effective date" (as defined in Rule 158
under the Securities Act) of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158;
-13-
(h) so long as the Shares are outstanding, to furnish to the
Representative copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) for a period of 90 days after the date of the initial public
offering of the Shares not to (i) offer, sell, contract to sell or
otherwise dispose of any shares of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for shares of
Common Stock of the Company without the prior written consent of the
Representative, other than shares of common stock of the Company issued
upon the exercise of options granted under existing employee stock option
plans or (ii) file a registration statement with the Commission relating to
shares of Common Stock of the Company issuable upon exercise or exchange of
securities convertible into shares of Common Stock of the Company, in
either case without the prior written consent of the Representative;
(j) to not take, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares; and
(k) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution and delivery of the Shares, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements thereto),
(iii) incurred in connection with the registration or qualification of the
Shares under the laws of such jurisdictions as the Representative may
designate (including reasonable fees and disbursements of counsel for the
Underwriters), (iv) in connection with the listing of the Shares on any
stock exchange, (v) related to the filing with, and clearance of the
offering by, the National Association of Securities Dealers, Inc.
(including the reasonable fees and disbursements of counsel for the
Underwriters) and (vi) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the
Underwriters and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided.
-14-
7. (a) Each Selling Stockholder, severally and not jointly, covenants
and agrees (except that Non-Management Selling Stockholders are not
covenanting or agreeing to the provisions of Section 7(a)(v)) with the
several Underwriters as follows:
(i) to cooperate to the extent necessary to cause any
post-effective amendment to the Registration Statement to become
effective at the earliest possible time;
(ii) to pay all federal and other taxes, if any, on the transfer
or sale of the Shares being sold by the Selling Stockholder to the
Underwriters;
(iii) to do or perform all things required to be done or
performed by such Selling Stockholder prior to the Closing Date or any
Additional Closing Date, as the case may be, to satisfy all conditions
precedent to the delivery of the Shares by such Selling Stockholder
pursuant to this Agreement;
(iv) not to not take, directly or indirectly, any action designed
to or that might reasonably be expected to case or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares; and
(v) to advise the Representative promptly, and if requested by
any Representative, will confirm such advice in writing during any
period during which an Underwriter is required to deliver a Prospectus
in connection with the offering contemplated hereby, of (A) any change
in the Company's general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations or
of any change in the information relating to such Selling Stockholder,
or (B) the happening of any event, which change or event makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to
state a material fact required by the Securities Act to be stated
therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus
in order to comply with the Securities Act or any other law; and
(b) each Management Selling Stockholder, severally and not jointly,
covenants and agrees with the several Underwriters for a period of 90 days
after the date of the initial public offering of the Shares not to offer,
sell, contract to sell or otherwise dispose of any shares of Common Stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of Common Stock of the Company without the prior
written consent of the Representative, other than the Shares to be sold
hereunder.
-15-
8. The several obligations of the Underwriters hereunder to purchase the
Underwritten Shares are subject to the performance by the Company and the
Selling Stockholders of their obligations hereunder and to the following
additional conditions:
(a) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for additional information
shall have been complied with to the satisfaction of the Representative;
(b) the representations and warranties of the Company and of each
Selling Stockholder contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date and each of the
Company and each Selling Stockholder shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(c) 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 of its subsidiaries or material
adverse change or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as whole otherwise
than as set forth or contemplated in the Prospectus, the effect of which in
the judgment of the Representative makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus; and neither the Company
or any of its subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by reference
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;
(d) the Representative shall have received on and as of the Closing
Date a certificate of an executive officer of the Company satisfactory to
the Representative to the effect set forth in subsections (a) and (b) of
this Section and to the further effect that there has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results
of operations of
-16-
the Company and its subsidiaries taken as a whole from that set forth or
contemplated in the Registration Statement;
(e) the Representative shall have received on and as of the Closing
Date a certificate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, as
Attorney-in-Fact for the Selling Stockholders, to the effect that the
representations and warranties of each Selling Stockholder contained herein
are true and correct on and as of the Closing Date as if made on and as of
the Closing Date and each Selling Stockholder shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(f) ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, special counsel for the Company, shall
have furnished to the Representative their written opinion, dated the
Closing Date, in form and substance satisfactory to the Representative, 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 Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) 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
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(iii) Each of the Company's subsidiaries that is a "significant
subsidiary", as such term is defined in Rule 405 under the Securities
Act (each a "Subsidiary"), is validly existing as a corporation or
limited liability company, as the case may be, under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct is business as described in
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and all the outstanding shares of capital stock or membership
interests, as the case may be, of each Subsidiary of the Company have
been duly authorized and validly issued, are fully-paid and
non-assessable,
17
and (except in the case of foreign subsidiaries, for directors'
qualifying shares) are owned by the Company directly or
indirectly, to the knowledge of such counsel free and clear of all
liens, encumbrances, security interests and claims;
(iv) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the
knowledge of such counsel, threatened against the Company or any of
its subsidiaries or any of their respective properties or to which the
Company or any of its subsidiaries is or may be a party or to which
any of their respective properties is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole and,
to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others; and such counsel does not know 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;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the authorized capital stock of the Company conforms as to
legal matters to the description thereof included or incorporated by
reference in the Prospectus;
(vii) the outstanding shares of capital stock of the Company
have been duly authorized and are validly issued, fully paid and
non-assessable;
(viii) the Rights attached to the Shares have been duly
authorized and have been validly issued;
(ix) neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would not be, in
violation of or in default under, its Certificate of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except for
violations and defaults which individually and in the aggregate are
not material to the
-18-
Company and its subsidiaries taken as a whole; the issue and sale
of the Shares and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
material agreement or 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 is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
any such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any of
its subsidiaries or any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or its subsidiaries or any of their
respective properties;
(x) 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 such consents, approvals, authorizations, registrations or
qualifications as have been obtained under the Securities Act and as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(xi) the statements in the Prospectus under "Underwriting", and
the statements contained under the captions "Item 1. Business --
Proprietary Rights," "Item 2. Description of Property," and "Item 3.
Legal Proceedings" in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 and incorporated by reference in the
Prospectus, incorporated by reference from the Company's registration
statement on Form 8-A, and in the Registration Statement in Item 15,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
or proceedings;
(xii) the Company is not, and after completion of the sale of
the Shares contemplated hereby, will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended; and
(xiii) such counsel (A) is of the opinion that each document
incorporated by reference in the Registration Statement and the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein,
-19-
as to which such counsel need express no opinion) complied as to
form in all material respects with the Exchange Act, and the rules
and regulations of the Commission thereunder, (B) believes that
(except for the financial statements included therein as to which
such counsel need express no belief) each part of the Registration
Statement (including the documents incorporated by reference therein)
filed with the Commission pursuant to the Securities Act relating to
the Shares; when such part became effective, 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 not misleading; (C) is of the opinion that the
Registration Statement and the Prospectus and any amendments and
supplements thereto (except for the financial statements included
therein as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the
Securities Act); and (D) believes that (except for the financial
statements included therein as to which such counsel need express
no belief) the Registration Statement and the Prospectus, on the
date of this Agreement, 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,
and that the Prospectus as amended or supplemented, if applicable,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein in light of the circumstances under which they were made, not
misleading.
In rendering such opinions, such counsel may rely (A) as to matters of law
involving the application of the laws of the State of New York upon the
assumption that such laws are identical to the laws of the State of Illinois;
(B) as to matters involving the application of laws other than the laws of the
United States and the States of New York, Illinois and Delaware, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably satisfactory
to Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (C) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. The opinion of such counsel for the
Company shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in such counsel's opinion, the Underwriters
and they are justified in relying thereon. With respect to the matters to be
covered in subparagraph (xiv) above counsel may state their opinion and belief
is based upon their participation in the preparation of the Registration
Statement and the Prospectus and any amendment or supplement thereto and review
and discussion of the contents thereof but is without independent check or
verification except as specified.
-20-
(g) ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, special counsel for the Selling
Stockholders, shall have furnished to the Representative their written
opinion, dated the Closing Date, in form and substance satisfactory to the
Representative, to the effect that:
(i) this Agreement, the Power of Attorney and Custody Agreement
have been duly authorized, executed and delivered by or on behalf of
each Selling Stockholder and are valid and binding agreements of each
Selling Stockholder enforceable against each Selling Stockholder in
accordance with their terms; and
(ii) to the knowledge of such counsel, the Selling Stockholders
have full right, power and authorization, and any approval required by
law, to sell, assign, transfer and deliver good and marketable title
to Shares which the Selling Stockholders have agreed to sell pursuant
to this Agreement.
(h) on the date of this Agreement and also on the Closing Date, Ernst
& Young LLP shall have furnished to you letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus;
(i) the Representative shall have received on and as of the Closing
Date an opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Underwriters, with
respect to the due authorization and valid issuance of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representative 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; and
(j) on or prior to the Closing Date the Company shall have furnished
to the Representative such further certificates and documents as the
Representative shall reasonably request.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to satisfaction of the conditions set forth in paragraphs
(a) - (k) above on and as of the Additional Closing Date, except that the
certificates called for by paragraph (d) and (e) above, the opinions called for
by paragraphs (f), (g) and (i) above and the third letter called for by
paragraph (h) above shall be dated the Additional Closing Date.
9. The Company and each of the Selling Stockholders jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the
-21-
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted)
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representative expressly for use
therein; PROVIDED that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated
or remedied in the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) and, if
required by law, a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior
to the written confirmation of the sale of such Shares to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, each of the Selling Stockholders and each person who controls the
Company or any of the Selling Stockholders within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Selling Stockholders to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but
-22-
the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying
Person has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and that
all such fees and expenses shall be reimbursed as they are incurred. Any
such separate firm for the Underwriters and such control persons of
Underwriters shall be designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
any such separate firm for the Company, its directors, its officers who sign
the Registration Statement and such control persons of the Company shall be
designated in writing by the Company and any such separate firm for the
Selling Stockholders shall be designated in writing by a majority of the
Selling Stockholders who are Indemnified Parties with respect to such action.
The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 9 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other hand from the offering of the
-23-
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The 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 respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the Selling Stockholders and the total
underwriting discounts and the commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate public offering price of the Shares. The relative fault of the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Selling Stockholders or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by PRO RATA allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9, in no event shall
an Underwriter 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 that
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
Securities 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 9 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule II
hereto, and not joint.
In no event shall any Selling Stockholder's aggregate liability under this
Section 9 be greater than an amount equal to the net proceeds received by such
Selling Stockholder from the sale of the Shares offered by such Selling
Stockholder pursuant to this Agreement. In no event
-24-
shall the trustee of any trust that is a Selling Stockholder be liable under
this Section 9 solely as a result of having served as the trustee of any such
trust.
The indemnity and contribution agreements contained in this Section 9 are
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 9 and
the representations and warranties of the Company and the Selling Stockholders
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any other person
controlling the Company or the Selling Stockholders and (iii) acceptance of and
payment for any of the Shares.
10. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representative, by notice given
to the Company and the Selling Stockholders, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, and the National
Association of Securities Dealers, Inc., (ii) trading of any securities of or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the reasonable judgment of the Representative, is material and adverse
and which, in the reasonable judgment of the Representative, makes it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be
-25-
obligated severally in the proportions that the number of Shares set forth
opposite their respective names in Schedule II bears to the aggregate number
of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the
Representative may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If on the
Closing Date or the Additional Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Shares which it
or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares to be purchased on such date, and
arrangements satisfactory to the Representative, the Company and the Selling
Stockholders for the purchase of such Shares are not made within 36 hours
after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Shares, as the case may be) shall
terminate without liability on the part of any nondefaulting Underwriter, the
Company or any Selling Stockholder. In any such case either you or the
Company shall have the right to postpone the Closing Date (or, in the case of
the Option Shares, the Additional Closing Date), but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
12. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or any
of the Selling Stockholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or any of the
Selling Stockholders shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the reasonable fees and
expenses of its counsel) reasonably incurred by the Underwriters in
connection with this Agreement or the offering contemplated hereunder.
13. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Stockholders, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
-26-
14. Any action by the Underwriters hereunder may be taken by the
Representative on behalf of the Underwriters, and any such action taken by
the Representative shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representative, c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: Syndicate Department.
Notices to the Company or the Selling Stockholders shall be given them at
Engineering Animation, Inc., ISU Research Park, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, General
Counsel.
15. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
* * *
-27-
If the foregoing is in accordance with your understanding, please sign and
return six counterparts hereof.
Very truly yours,
ENGINEERING ANIMATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer and
President
Each of the Selling Stockholders
Listed on Schedule I hereto
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attorney-in-Fact
Accepted: March 18, 1998
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Acting on behalf of itself
and the several Underwriters
listed in Schedule II hereto.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Vice President
-28-
Number of Number of
Underwritten Option
Selling Stockholder Number of Shares
------------------- ------------ ----------
MANAGEMENT SELLING STOCKHOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . 179,227 71,468
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ . . . . . . . . . 179,226 71,469
NON-MANAGEMENT SELLING STOCKHOLDERS
Former Cimtech Stockholders
▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . 5,000
▇▇▇▇▇ ▇▇▇▇▇▇. . . . . . . . . . . . . . 4,252
Trustees of ▇▇▇▇▇▇▇▇ College. . . . . . 10,479
Iowa Seed Capital Corporation . . . . . 7,276
▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ Development Company . . . . 3,477
▇▇▇▇▇ ▇▇▇ . . . . . . . . . . . . . . . 9,667
FORMER ROSETTA SHAREHOLDERS AND TCV MEMBERS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . 4,605
▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . 465
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . 26,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . 465
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ . . . 2,400
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . 621
▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ . . . . . . . . . 76
▇▇▇▇ ▇. ▇▇▇▇▇▇▇. . . . . . . . . . . . 1,561
Cronus, Inc.. . . . . . . . . . . . . . 9,452
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . 5,493
▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . . 45,915
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . 7,910
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. . . . . . . . . . 2,450
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . 1,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . 154
First Trust Corporation as Trustee for
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.▇. . . . . . . . . 1,500
▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . . 100
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . . . . 76
Con R. Hanger and ▇▇▇▇▇ ▇▇▇▇▇ . . . . . 307
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . 268
First Trust Corporation as Trustee for
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇.▇.▇. . . . . . . . 6,312
-29-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ . . . . . . . . . . 512
▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . . 70,186
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ . . . . . . . . . 6,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . 1,093
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . 390
▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . . 521
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ . . . . . . . . . 3,866
▇▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . 1,988
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ . . . . . . . . . . . . 2,346
▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . 82
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . 100
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . 2,329
▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . . . 1,130
▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . . . . . 31,041
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Trust (UTA
7/28/89), ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Trustee . . . . . . . . . . . . . . . 2,500
▇▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . . . . . 1,082
▇▇▇▇▇, ▇▇▇▇▇ & Co. Profit Sharing A/C . 3,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . 11,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . 3,091
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇▇. 4,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President of North
American Sales, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ . 18,331
▇▇▇▇▇▇▇ ▇▇▇▇▇ . . . . . . . . . . . . . 745
OTHER SELLING STOCKHOLDERS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . 2,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . 7,500
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ . . . . . . . . . . 6,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ . . . . . . . . 1,500
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . . 4,660
▇▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . 3,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . 7,500
▇▇▇ ▇. ▇▇▇▇▇▇▇ . . . . . . . . . . . . 77,556
▇▇▇▇ ▇. ▇▇▇▇ . . . . . . . . . . . . . 168,444
------- ---------
Total................... 960,000 142,937
======= =========
-30-
SCHEDULE II
Number of
Shares
To Be
Underwriter Purchased
----------- ---------
▇.▇. ▇▇▇▇▇▇ Securities Inc. ............... 1,102,937
----------
Total................................. 1,102,937
==========
