1
EXHIBIT 1.2
820,000 Shares
APAC TELESERVICES, INC.
(an Illinois corporation)
Common Shares
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
, 1996
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▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
as Lead Managers of the several Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Dear Sirs:
APAC TeleServices, Inc., a United States company incorporated
in the State of Illinois (the "Company"), and each of the shareholders of the
Company named in Schedule B hereto (the "Selling Shareholders"), confirm their
respective agreements with you and each of the other underwriters named in
Schedule A hereto (collectively, the "Managers," which term shall also include
any underwriter substituted as hereinafter provided in Section 10), for whom
you are acting as lead managers (in such capacity, the "Lead Managers"), with
respect to the sale by the Selling Shareholders, acting severally and not
jointly, and the purchase by the Managers, acting severally and not jointly, of
the respective number of Common Shares, par value $.01 per share, of the
Company (the "Common Shares") set forth in said Schedules A and B hereto and
with respect to the grant by certain of the
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Selling Shareholders to the Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 123,000
additional Common Shares to cover over-allotments, if any, in each case except
as may otherwise be provided in the International Pricing Agreement, as
hereinafter defined. The 820,000 Common Shares (the "Initial International
Securities") to be purchased by the Managers and all or any part of the 123,000
Common Shares subject to the option described in Section 2(b) hereof (the
"International Option Securities") are collectively hereinafter called the
"International Securities".
It is understood that the Company and the Selling Shareholders
are concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Selling Shareholders of
3,280,000 Common Shares (the "Initial U.S. Securities") through arrangements
with certain underwriters in the United States (the "U.S. Underwriters") for
which ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company, L.L.C. are acting as representatives (the "U.S. Representatives") and
the grant by certain of the Selling Shareholders to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or any part of
the U.S. Underwriters' pro rata portion of up to 492,000 additional Common
Shares solely to cover over-allotments, if any (the "U.S. Option Securities"
and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities". It is understood that the Selling
Shareholders are not obligated to sell, and the Managers are not obligated to
purchase, any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities" and the International Securities and the U.S. Securities
are hereinafter collectively called the "Securities".
Prior to the purchase and public offering of the International
Securities by the several Managers, the Company, the Selling Shareholders and
the Lead Managers, acting on behalf of the several Managers, shall enter into
an agreement substantially in the form of Exhibit A hereto (the "International
Pricing Agreement"). The International Pricing Agreement may take the form of
an exchange of any standard form of written telecommunication among the
Company, the Selling Shareholders and the Lead Managers and shall specify such
applicable information
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as is indicated in Exhibit A hereto. The offering of the International
Securities will be governed by this Agreement, as supplemented by the
International Pricing Agreement. From and after the date of the execution and
delivery of the International Pricing Agreement, this Agreement shall be deemed
to incorporate the International Pricing Agreement. The initial public
offering price and the purchase price with respect to the U.S. Securities shall
be set forth in a separate instrument (the "U.S. Pricing Agreement"), the form
of which is attached to the U.S. Purchase Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-14097) and related preliminary prospectuses for the registration of the
Securities under the Securities Act of 1933 (the "1933 Act"), has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required pursuant to
this Agreement, the 1933 Act or otherwise. Such registration statement (as
amended, if applicable) and the two prospectuses constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
therein by reference and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) or Rule 434 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), as from time to
time amended or supplemented pursuant to the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or otherwise, are hereinafter
referred to as the "Registration Statement", the "International Prospectus" and
the "U.S. Prospectus", respectively, and the International and U.S.
Prospectuses are hereinafter together called "Prospectuses" and, each
individually, a Prospectus except that if any revised prospectuses shall be
provided to the Managers or the U.S. Underwriters by the Company for use in
connection with the offering of the Securities which differs from the
Prospectuses on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
terms "International Prospectus" and "U.S. Prospectus" shall refer to each such
revised prospectus from and after the time it is first provided to the Managers
or the U.S. Underwriters, as the case may be, for such use. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all references to
the Prospectuses shall be deemed to include, without limitation, the form of
prospectuses and the term sheets, taken together, provided to the Managers and
the U.S. Underwriters by the Company in reliance on Rule 434 under the 1933 Act
(the "Rule 434 Prospectuses"). If the Company files a registration statement
to register a portion of the Securities and relies on Rule 462(b)
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for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to include both the
registration statement referred to above (No. 333-14097) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the 1933 Act, the 1934 Act, or otherwise. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectuses, the Prospectuses or any term sheets or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and
schedules and other information which is "contained", "included", "described"
or "stated" in the Registration Statement, any preliminary prospectus or the
Prospectuses (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectuses, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectuses shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
The Company and the Selling Shareholders understand that the
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after the Registration Statement
becomes effective and the International Pricing Agreement has been executed and
delivered. The price per share for the U.S. Securities to be purchased by the
U.S. Underwriters pursuant to the U.S. Purchase Agreement shall be identical to
the price per share for the International Securities to be purchased by the
Managers hereunder.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each of the
Managers as of the date hereof and as of the date of the International Pricing
Agreement (such latter date being hereinafter referred to as the "International
Representation Date") as follows:
(i) The Company meets the requirements for use of
Form S-3 under the 1933 Act. At the respective times the
Registration Statement and any post-effective amendments
thereto become effective and at the International
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Representation Date, the Registration Statement will comply in
all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations 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 not misleading. The Prospectuses, at the
International Representation Date (unless the term
"Prospectuses" refers to prospectuses which have been provided
to the Managers and the U.S. Underwriters by the Company for
use in connection with the offering of the Securities which
differ from the Prospectuses on file at the Commission at the
time the Registration Statement becomes effective, in which
case at the time such prospectuses are first provided to the
Managers and the U.S. Underwriters for such use) and at
Closing Time referred to in Section 2 hereof, will not include
an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration
Statement or Prospectuses made in reliance upon and in
conformity with information furnished to the Company in
writing by the Managers through the Lead Managers expressly
for use in the Registration Statement or the Prospectuses.
(ii) The documents incorporated or deemed to be
incorporated by reference in the Prospectuses, at the time
they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements
of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when
read together with the other information in the Prospectuses,
at the time the Registration Statement and any post-effective
amendments thereto become effective and at the Closing Time
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.
(iii) The accountants who certified the financial
statements and supporting schedules included or incorporated
by reference in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) The historical financial statements included or
incorporated by reference in the Registration Statement and
the Prospectuses, together with the related schedules and
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notes, present fairly the financial position of the Company at
the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company for the
periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated
therein. The historical Income Statement Data and Balance
Sheet Data contained in the Registration Statement under the
captions "Summary Financial and Operating Data" and "Selected
Financial and Operating Data" and the historical Income
Statement Data under the caption "Recent Developments" in the
Registration Statement have been compiled on a basis
consistent with that of the audited financial statements
included in the Registration Statement.
(v) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein, (A) there
has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Illinois and has the corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and to
enter into and perform its obligations under this Agreement,
the International Pricing Agreement, the U.S. Purchase
Agreement and the U.S. Pricing Agreement; the Company is duly
qualified as a foreign corporation to transact business and is
in good standing in the State of Iowa; and the Company is duly
qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing
would not have a material adverse effect on the condition,
financial
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or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(vii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business and is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and
outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of the subsidiaries
was issued in violation of the preemptive or similar rights of
any stockholder of such corporation arising by operation of
law, under the charter or by-laws of any subsidiary or under
any agreement to which the Company or any subsidiary is a
party. Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries,
neither the Company nor any such subsidiary owns any shares of
stock or any other equity securities of any corporation or has
any equity interest in any firm, partnership, association or
other entity, except as described in or by the Prospectuses.
The only subsidiaries of the Company are APAC TeleServices of
Michigan, Inc., a Michigan corporation, APAC TeleServices of
Illinois, Inc., an Illinois corporation, and APAC Insurance
Services Agency, Inc., an Illinois corporation. Such
subsidiaries, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) Each of the contracts and agreements between
the Company and the clients of the Company listed on Schedule
C hereto (each, a "Contract" and collectively, the
"Contracts") and the Employment Agreement, dated May 26, 1995,
as amended on October 3, 1995, between the Company and ▇▇▇▇ ▇.
▇▇▇▇▇ (the "▇▇▇▇▇ Agreement") has been duly authorized,
executed and delivered by the Company and, to the knowledge of
the Company (with respect to each
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Contract), by the other parties thereto, is enforceable in
accordance with its terms and is in full force and effect,
without termination or cancellation provisions having been
exercised by any of the parties thereto; to the knowledge of
the Company, no exercise of termination or cancellation
provisions of any of the Contracts or the Simon Agreement is
contemplated or has been threatened by any of the parties
thereto; and the consummation of the transactions contemplated
in each of the Contracts and the Simon Agreement has been duly
authorized by all necessary corporate action. The Company has
not received any notice or is otherwise aware of any material
infringement of or material dispute arising out of the rights
or obligations of the Company or the other parties to such
Contracts or the Simon Agreement under the terms of any of the
Contracts or the Simon Agreement.
(ix) The authorized, issued and outstanding capital
stock of the Company is set forth in the Prospectuses under
the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to employee benefit plans referred to in the
Prospectuses, pursuant to the exercise of options referred to
in the Prospectuses or pursuant to the employee stock purchase
plan referred to in the Prospectuses); the issued and
outstanding Common Shares, including the Securities to be
purchased by the Underwriters from the Selling Shareholders,
have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding Common
Shares, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company arising by operation of law,
under the charter or by-laws of the Company or under any
agreement to which the Company or any of its subsidiaries is a
party; the Common Shares conform in all material respects to
all statements relating thereto contained in the Prospectuses;
and the Securities are not subject to preemptive or other
similar rights of any securityholder of the Company arising by
operation of law, under the charter and by-laws of the Company
or under any agreement to which the Company or any of its
subsidiaries is a party.
(x) Neither the Company nor any of its subsidiaries
is in violation of its charter or in material default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any material contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease 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 may be bound, or to which any of
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the material property or assets of the Company or any of its
subsidiaries is subject, including any of the Contracts; and
the execution, delivery and performance of this Agreement, the
International Pricing Agreement, the U.S. Purchase Agreement
and the U.S. Pricing Agreement and the consummation of the
transactions contemplated herein and therein and compliance by
the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice
or the passage of time or both, conflict with or constitute a
material breach of, or material default or Repayment Event (as
defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any material property
or assets of the Company or any of its subsidiaries pursuant
to, any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the
material property or assets of the Company or any of its
subsidiaries is subject, including any of the Contracts, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company, any applicable law,
statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets or properties or the terms
and conditions of any material Governmental License (as
defined below). As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xi) Other than disputes incidental to the Company's
business that could not reasonably be expected to result in a
material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise, no labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge
of the Company, is imminent; and the Company is not aware of
any existing or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors
or any party to a Contract which in either case might be
expected to result in any material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business
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prospects of the Company and its subsidiaries considered as
one enterprise.
(xii) There is no action, suit, proceeding, inquiry
or investigation before or by any court or governmental agency
or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the
Company or any of its subsidiaries, which is required to be
disclosed in the Registration Statement (other than as
disclosed therein), or which the Company, acting reasonably,
believes is likely to result in any material adverse change in
the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or which the
Company, acting reasonably, believes is likely to materially
and adversely affect the properties or assets of the Company
or any of its subsidiaries or the consummation of this
Agreement or the U.S. Purchase Agreement or the performance by
the Company of its obligations hereunder or thereunder or
under any of the Contracts; the aggregate of all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective
property or assets is the subject which are not described in
the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be
expected to result in a material adverse change in the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xiii) There are no contracts or documents which are
required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference
therein or to be filed as exhibits thereto by the 1933 Act,
the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations which have not been so described and filed as
required.
(xiv) The Company and its subsidiaries own or
possess, or reasonably believe they can acquire on reasonable
terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks
and trade names (collectively, "patent and proprietary
rights") presently employed by them in connection with the
business now operated by them, and, other than as explicitly
disclosed in writing to the Lead Managers, neither the Company
nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict
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with asserted rights of others with respect to any such patent
or proprietary rights, or of any facts which would render any
such patent and proprietary rights invalid or inadequate to
protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in any
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(xv) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree
of, any court or governmental authority or agency is necessary
or required for the performance by the Company of its
obligations hereunder or under the U.S. Purchase Agreement, or
in connection with the offering, issuance or sale of the
Securities hereunder or under the U.S. Purchase Agreement or
the consummation of the transactions contemplated by this
Agreement, the U.S. Purchase Agreement, the International
Pricing Agreement and the U.S. Pricing Agreement, except such
as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
(xvi) The Company, its subsidiaries and their
respective telephone representatives who sell
insurance-related products possess such certificates,
authorities, permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued
by the appropriate state, federal, local or foreign regulatory
agencies or bodies necessary to conduct the business now
operated or conducted by them except where the failure to
possess such Governmental Licenses would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; the Company, its subsidiaries
and their respective telephone representatives who sell
insurance-related products are in compliance with the terms
and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; all of the Governmental Licenses
are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of
such Government Licenses to be in full force and effect would
not have a material adverse
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effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and
neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely
affect the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xvii) This Agreement and the U.S. Purchase
Agreement have been, and, at the International Representation
Date, the International Pricing Agreement and the U.S. Pricing
Agreement will have each been, duly authorized, executed and
delivered by the Company.
(xviii) Except as set forth in the Prospectuses, the
Company and its subsidiaries are in compliance in all material
respects with all applicable laws, statutes, ordinances, rules
or regulations, the enforcement of which, individually or in
the aggregate, would be reasonably expected to have a material
adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xix) The Company and its subsidiaries have good and
marketable title to all material properties (real and
personal) owned by the Company and its subsidiaries, free and
clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) do not, singly
or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed
to be made of such property by the Company or any of its
subsidiaries; and all properties held under lease by the
Company or its subsidiaries are held under valid, subsisting
and enforceable leases.
(xx) Except as disclosed in the Prospectuses, there
are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the
1933 Act.
(xxi) Except as disclosed in the Prospectuses, there
are no outstanding options, warrants, or other rights calling
for the issuance of, and no commitments, plans or
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arrangements to issue, any shares of capital stock of the
Company or any of its subsidiaries or any security convertible
into or exchangeable for capital stock of the Company or any
of its subsidiaries.
(xxii) The Company has complied with, and is and
will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and
the rules and regulations thereunder (collectively, the "Cuba
Act") or is exempt therefrom.
(xxiii) The Company is not, and upon the sale of the
Securities as contemplated herein and in the U.S. Purchase
Agreement will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xxiv) The Company and its subsidiaries have filed
all federal, state, local and foreign tax returns that are
required to be filed or has duly requested extension thereof
and has paid all taxes required to be paid by them and any
related assessments, fines or penalties except for any such
tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings; and adequate
charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iv) above in
respect of all federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or any of
its subsidiaries has not been finally determined or remains
open to examination by applicable taxing authorities.
(xxv) The Company and its subsidiaries carry or are
entitled to the benefits of insurance in such amounts and
covering such risks as they reasonably believe is adequate to
protect them against the occurrence of such events, (i)
against the risk of which insurance is available and (ii) the
occurrence of which would reasonably be likely to materially
and adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, and
all such insurance is in full force and effect.
(xxvi) The Company and its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general and specific
authorizations; (ii) transactions are recorded as necessary
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to permit preparations of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorizations; and (iv) the
recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxvii) The Company and its subsidiaries have not
(i) taken directly or indirectly, any action designed to cause
or result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale of the Securities or (ii) since the
initial filing of the Registration Statement (A) bid for,
purchased or paid anyone any compensation for soliciting
purchases of, the Securities, or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase
any other securities of the Company.
(xxviii) The Company has not distributed and, prior
to the later to occur of (i) the Closing Time and (ii)
completion of the distribution of the Securities, will not
distribute any prospectus (as such term is defined in the 1933
Act and the 1933 Act Regulations) in connection with the
offering and sale of the Securities other than the
Registration Statement, any preliminary prospectus filed with
the Commission, the Prospectuses or other materials, if any,
permitted by the 1933 Act or by the 1933 Act Regulations and
approved by the Lead Managers and the U.S. Representatives.
(xxix) No relationship, direct or indirect, exists
between or among any of the Company or any affiliate of the
Company, on the one hand, and any director, officer,
stockholder, customer or supplier of any of them, on the other
hand, which is required by the 1933 Act or the 1934 Act or by
the 1933 Act Regulations or the 1934 Act Regulations to be
described in the Registration Statement or the Prospectuses
which is not so described or is not described as required.
(b) Each Selling Shareholder severally and not jointly
represents and warrants to, and agrees with, each of the Managers as follows:
(i) All authorizations, approvals and consents
(other than the issuance of the order of the Commission
declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary
under state securities laws) necessary for the execution and
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delivery by such Selling Shareholder of this Agreement, the
International Pricing Agreement, the U.S. Purchase Agreement
and the U.S. Pricing Agreement and the sale and delivery of
the Securities to be sold by such Selling Shareholder
hereunder and under the U.S. Purchase Agreement have been
obtained and are in full force and effect; such Selling
Shareholder has the full right, power and authority to enter
into this Agreement, the International Pricing Agreement, the
U.S. Purchase Agreement and the U.S. Pricing Agreement and to
sell, transfer and deliver the Securities to be sold by such
Selling Shareholder hereunder and under the U.S. Purchase
Agreement; and the trustees of each Selling Shareholder which
is a trust and their successor or successors (the "Trustees")
are duly and validly authorized to take each such action
without the approval of any other person or court and the
execution hereof and of the International Pricing Agreement,
the U.S. Purchase Agreement and the U.S. Pricing Agreement by
the Trustees shall be an act which validly binds each Selling
Shareholder which is a trust to the terms of this Agreement,
the International Pricing Agreement, the U.S. Purchase
Agreement and the U.S. Pricing Agreement, respectively.
(ii) The execution, delivery and performance of
this Agreement, the International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing Agreement and the sale
and delivery of the Securities to be sold by such Selling
Shareholder and the consummation of the transactions
contemplated herein and therein and compliance by such Selling
Shareholder with its obligations hereunder and thereunder have
been duly authorized by such Selling Shareholder and do not
and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a
material breach of, or material default under, or result in
the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities to be sold by such Selling
Shareholder or any material property or assets of such Selling
Shareholder pursuant to, any treaty, law, regulation or decree
or material contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, license, lease or other agreement
or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which
any of the material property or assets of such Selling
Shareholder is subject, nor will such action result in any
violation of the trust agreement or other
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organizational or governing instrument of such Selling
Shareholder, if applicable, or any applicable treaty, law,
statute, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, foreign or
domestic; and in the case of each Selling Shareholder that is
a trust, the trust agreement or other organizational or
governing instrument applicable thereto previously provided to
the Lead Managers and the U.S. Representatives is a valid,
binding and enforceable agreement under the laws of the State
of Illinois and such agreement or other instrument has not
been modified or revoked and is in full force and effect and
the powers granted thereby and thereunder to the Trustees to
take the actions referred to in (b)(i) above were validly
granted and have not been modified or revoked and are in full
force and effect; and no legal action is pending or threatened
that challenges the validity of such trust agreement or other
organizational or governing instrument or such powers granted
to the Trustees.
(iii) Except as described in the Prospectuses, such
Selling Shareholder has (or, in the case of ▇▇▇▇ ▇. ▇▇▇▇▇,
such Selling Shareholder has the right to acquire pursuant to
the Simon Agreement) and will at Closing Time referred to in
Section 2(c) hereof and, if any International Option
Securities are purchased, on each Date of Delivery referred to
in Section 2(b) hereof, have good and marketable title to the
Securities to be sold by such Selling Shareholder hereunder
and under the U.S. Purchase Agreement, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity other than pursuant to this Agreement or the U.S.
Purchase Agreement; and upon delivery of the International
Securities and payment of the purchase price therefor as
herein contemplated, each of the Managers will receive good
and marketable title to the International Securities purchased
by it from such Selling Shareholder, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(iv) Such Selling Shareholder 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 constitute the stabilization or manipulation of
the price of any security of the Company to facilitate the
sale of the Securities; and such Selling Shareholder has not
distributed and will not distribute any prospectus (as such
term is defined in the 1933 Act and the 1933 Act Regulations)
in connection with the offering and sale of the Securities
other than any preliminary prospectus filed with the
Commission or the Prospectuses or other material permitted by
the 1933 Act or the 1933 Act Regulations.
(v) No filing with, or consent, approval,
authorization, order, registration, qualification or decree
of, any governmental authority or body is necessary or
required for the performance by such Selling Shareholder of
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its obligations hereunder or under the U.S. Purchase Agreement
or in connection with the sale of the Securities hereunder or
under the U.S. Purchase Agreement or the consummation of the
transactions contemplated by this Agreement, the International
Pricing Agreement, the U.S. Purchaser Agreement and the U.S.
Pricing Agreement, except such as may have previously been
made or obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws.
(vi) Such Selling Shareholder (or, if the Selling
Shareholder is a trust, the Trustees thereof) has reviewed and
is familiar with the Registration Statement; to the best
knowledge of such Selling Shareholder such Registration
Statement does 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; such Selling Shareholder (or, if the Selling
Shareholder is a trust, the Trustees thereof) is not prompted
to sell the Securities to be sold by such Selling Shareholder
hereunder or under the U.S. Purchase Agreement by any
information concerning the Company or any subsidiary of the
Company which is not set forth in the Prospectuses.
(vii) Such parts of the Registration Statement as
specifically refer to such Selling Shareholder do 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.
(viii) During a period of 180 days from the date of
the International Pricing Agreement, such Selling Shareholder
will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any
shares of capital stock of the Company or any security
convertible or exchangeable into or exercisable for such
capital stock owned by such Selling Shareholder or with
respect to which such Selling Shareholder has the power of
disposition, other than to (A) the Managers or the U.S.
Underwriters pursuant to this Agreement or the U.S. Purchase
Agreement, (B) members of such Selling Shareholder's immediate
family, (C) a trust or trusts the beneficiaries of which are
exclusively such Selling Shareholder, a member or members of
the ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ family or other entities controlled
by such Selling Shareholder or members of the ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ family, or (D) family limited partnerships which are
controlled by such Selling Shareholder or members of the
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ family, provided that each transferee
pursuant to
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subclauses (B), (C) and (D) above agrees in writing to be
bound by the restrictions described above in b(viii).
(ix) Neither such Selling Shareholder nor any of its
affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within
the meaning of Article 1, paragraph (q) of the By-laws of the
National Association of Securities Dealers, Inc. (the
"NASD")), any member firm of the NASD.
(x) Such Selling Shareholder agrees to deliver to
the Lead Managers and the U.S. Representatives at or prior to
the Closing Time 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).
(c) Any certificate signed by any officer of the Company
and delivered to the Lead Managers or to counsel for the Managers pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
the Company to each Manager as to the matters covered thereby; and any
certificate signed by any Selling Shareholder as such and delivered to the Lead
Managers or to counsel for the Managers pursuant to the terms of this Agreement
shall be deemed a representation and warranty by such Selling Shareholder to
each Manager as to matters covered thereby.
(d) The liability of the Selling Shareholders for breach
of the representation and warranty set forth in clause (b)(vi) above is limited
as set forth in Section 6(a).
SECTION 2. Sale and Delivery to Managers; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each
Selling Shareholder, severally and not jointly, agrees to sell to each Manager,
severally and not jointly, and each Manager, severally and not jointly, agrees
to purchase from each Selling Shareholder, at the price per share set forth in
the International Pricing Agreement, that proportion of the number of Initial
International Securities set forth in Schedule B opposite the name of such
Selling Shareholder which the number of Initial International Securities set
forth in Schedule A opposite the name of such Manager (plus any additional
number of Initial International Securities that such Manager may become
obligated to purchase pursuant to the provisions of Section 10 hereof) bears to
the total number of Initial International Securities (except as otherwise
provided in the International Pricing Agreement), subject to such adjustments
as the Managers in their
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discretion shall make to eliminate any sales or purchases of fractional
securities.
(1) If the Company has elected not to rely upon Rule
430A under the 1933 Act Regulations, the initial public
offering price and the purchase price per share to be paid by
the several Managers for the International Securities have
each been determined and set forth in the International
Pricing Agreement, dated the date hereof, and an amendment to
the Registration Statement and the Prospectuses will be filed
before the Registration Statement becomes effective.
(2) If the Company has elected to rely upon Rule
430A under the 1933 Act Regulations, the initial public
offering price and the purchase price per share to be paid by
the several Managers for the International Securities shall be
determined by agreement among the Lead Managers, the Company
and the Selling Shareholders and, when so determined, shall be
set forth in the International Pricing Agreement. In the
event that such prices have not been agreed upon and the
International Pricing Agreement has not been executed and
delivered by all parties thereto by the close of business on
the fourteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, unless otherwise
agreed to by the Company, Selling Shareholders and the Lead
Managers, except that Sections 1, 6, 7 and 8 shall remain in
effect.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, certain of the Selling Shareholders as set forth on Schedule B hereto,
acting severally and not jointly, hereby grant an option to the Managers
severally and not jointly, to purchase up to an additional 123,000 Common
Shares at the price per share set forth in the International Pricing Agreement.
The option hereby granted will expire 30 days after (i) the date the
Registration Statement becomes effective, if the Company has elected not to
rely on Rule 430A under the 1933 Act Regulations, or (ii) the International
Representation Date, if the Company has elected to rely upon Rule 430A under
the 1933 Act Regulations, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial International
Securities upon notice by the Lead Managers to such Selling Shareholders
setting forth the number of International Option Securities as to which the
several Managers are then exercising the option and the time and date of
payment and delivery for such International Option Securities. Any such time
and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Lead Managers,
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but shall not be, unless otherwise agreed upon by the Lead Managers and the
Selling Shareholders granting such option, later than seven full business days
after the exercise of said option, and in no event prior to Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
International Option Securities, the International Option Securities shall be
sold by the Selling Shareholders granting such option substantially in
proportion to the respective number of International Option Securities set
forth opposite their names in Schedule B hereto and each of the Managers,
acting severally and not jointly, will purchase from each such Selling
Shareholder that proportion of the total number of International Option
Securities set forth in Schedule B opposite the name of such Selling
Shareholder as may be adjusted on a pro rata basis to reflect the aggregate
number of International Option Securities then being purchased, which the
number of Initial International Securities set forth in Schedule A opposite the
name of such Manager bears to the total number of Initial International
Securities.
(c) Payment of the purchase price for the Initial
International Securities shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and delivery of the certificates for
the Initial International Securities shall be made against payment therefor at
the office of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇
World Headquarters, North Tower, World Financial Center, New York, New York
10281-1305, or (in either case) at such other place or places as shall be
agreed upon by the Selling Shareholders and the Lead Managers, at 10:00 A.M. on
the third business day (unless postponed in accordance with the provisions of
Sections 10) following the date the Registration Statement becomes effective
(or, if the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the third business day after execution of the International
Pricing Agreement, unless the International Pricing Agreement is executed after
4:30 P.M., in which case on the fourth business day thereafter), or such other
time not later than ten business days after such date as shall be agreed upon
by the Selling Shareholders and the Lead Managers (such time and date of
payment and delivery being herein called "Closing Time"). In addition, in the
event that any or all of the International Option Securities are purchased by
the Managers, payment of the purchase price for, and delivery of certificates
for, such International Option Securities shall be made at the offices set
forth above, or at such other place as shall be agreed upon by the Lead
Managers and the Selling Shareholders that granted such option to the Managers,
on each Date of Delivery as specified in the notice from the Lead Managers to
such Selling Shareholders. Payment shall be made to the appropriate Selling
Shareholders by wire transfer of, or certified or official bank check or checks
drawn in, same day
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funds payable to the order of the appropriate Selling Shareholders against
delivery to the Lead Managers, for the respective accounts of the Managers of
certificates for the International Securities to be purchased by them.
Certificates for the Initial International Securities and the International
Option Securities, if any, shall be in such denominations and registered in
such names as the Lead Managers may request in writing at least two business
days before the Closing Time or the relevant Date of Delivery, as the case may
be.
(d) It is understood that each Manager has authorized the
Lead Managers, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any Manager whose funds have not been received by the Closing Time
or the relevant Date of Delivery, as the case may be, but such payment shall
not relieve such Manager from its obligations hereunder. The certificates for
the Initial International Securities and the International Option Securities,
if any, will be made available for examination and packaging by the Lead
Managers not later than 11:00 A.M. on the last business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each of the Managers as follows:
(a) The Company will use its best efforts to cause
the Registration Statement to become effective (as and when
requested by the Lead Managers) and will notify the Lead
Managers immediately, and confirm the notice in writing, (i)
when the Registration Statement, or any post-effective
amendment to the Registration Statement, shall become
effective, or any supplement to the Prospectuses or any
amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering
or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose. The
Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop
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order is issued, to obtain the lifting thereof at the earliest
possible moment. If the Company elects to rely on Rule 434
under the 1933 Act Regulations, the Company will prepare a
term sheet that complies with the requirements of Rule 434
under the 1933 Act Regulations. If the Company elects not to
rely on Rule 434, the Company will provide the Managers with
copies of the form of Prospectuses, in such number as the
Managers may reasonably request, and timely file with the
Commission such Prospectuses in accordance with Rule 424(b) of
the 1933 Act by the close of business in New York on the
business day immediately succeeding the date of the
International Pricing Agreement. If the Company elects to
rely on Rule 434, the Company will provide the Managers with
copies of the forms of Rule 434 Prospectuses, in such number
as the Managers may reasonably request, and timely file with
the Commission the form of Prospectuses complying with Rule
434(b)(2) of the 1933 Act in accordance with Rule 424(b) of
the 1933 Act by the close of business in New York on the
business day immediately succeeding the date of the
International Pricing Agreement.
(b) The Company will give the Lead Managers notice
of its intention to file or prepare any amendment to the
Registration Statement (including any post-effective
amendment) or any amendment or supplement to the Prospectuses,
whether pursuant to the 1933 Act, the 1934 Act or otherwise,
(including any revised prospectuses which the Company proposes
for use by the Managers or the U.S. Underwriters in connection
with the offering of the Securities which differs from the
prospectuses on file at the Commission at the time the
Registration Statement first becomes effective, whether or not
any such revised prospectus is required to be filed pursuant
to Rule 424(b) of the 1933 Act Regulations or any term sheet
prepared in reliance on Rule 434 of the 1933 Act Regulations),
will furnish the Lead Managers with copies of any such
amendment or supplement a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not
file any such amendment or supplement or use any such
prospectus to which the Lead Managers or counsel for the
Managers shall have reasonably objected; provided, however,
that such objection shall not prevent the filing of any such
amendment or supplement which, in the opinion of counsel for
the Company, is required to be filed, pursuant to the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations.
(c) The Company has furnished or will deliver to the
Lead Managers and counsel for the Managers, without charge,
signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits
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filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead
Managers a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without
exhibits) for each of the Managers. The copies of the
Registration Statement and each amendment thereto furnished to
the Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) The Company will deliver to each Manager,
without charge, from time to time until the effective date of
the Registration Statement (or, if the Company has elected to
rely upon Rule 430A, until such time the International Pricing
Agreement is executed and delivered), as many copies of each
preliminary prospectus as such Manager may reasonably request,
and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish
to each Manager, without charge, from time to time during the
period when the Prospectuses are required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of
the International Prospectus (as amended or supplemented) as
such Manager may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder;
provided, that, in the event that a Manager is required to
deliver an International Prospectus in connection with sales
of any of the International Securities at any time nine months
or more after the time of issuance of the International
Prospectus, upon the request of such Manager but at such
Manager's expense, the Company will prepare and deliver to
such Manager as many copies as it may request of an
International Prospectus (as amended or supplemented)
complying with Section 10(a)(3) of the 1933 Act. The
International Prospectus and any amendments or supplements
thereto furnished to the Managers will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(e) The Company will comply with the 1933 Act and
the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution
of the Securities as contemplated by this Agreement, the U.S.
Purchase Agreement and the Prospectuses. If, during the period
in which a prospectus is required to be delivered by a Manager
under the 1933 Act, any event
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shall occur as a result of which it is necessary to amend the
Registration Statement or amend or supplement any Prospectus
in order that the Prospectuses will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be
necessary during such period to amend the Registration
Statement or amend or supplement any Prospectus in order to
comply with the 1933 Act or 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary
to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the Managers
such number of copies of such amendment or supplement as the
Managers may reasonably request.
(f) If, at the time that the Registration Statement
becomes effective, any information shall have been omitted
therefrom in reliance upon Rule 430A of the 1933 Act
Regulations, then following the execution of the International
Pricing Agreement, the Company will prepare, and timely file
with the Commission in accordance with such Rule 430A and Rule
424(b) of the 1933 Act Regulations, copies of amended
Prospectuses, or, if required by such Rule 430A, a
post-effective amendment to the Registration Statement
(including amended Prospectuses), containing all information
so omitted and will use its best efforts to cause such
post-effective amendment to be declared effective as promptly
as practicable.
(g) The Company will endeavor, in cooperation
with the Managers and their counsel, to qualify the Securities
for offering and sale under the applicable securities laws of
such jurisdictions as the Lead Managers may designate;
provided, however, that the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to take any action that would
subject the Company to general service of process or taxation
in any jurisdiction where it is not so subject at the date of
this Agreement. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements
and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of
the Registration Statement.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than
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45 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve month
period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined
in said Rule 158) of the Registration Statement.
(i) [intentionally omitted]
(j) During a period of 180 days from the date of the
International Pricing Agreement, the Company will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ International,
directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any capital stock of
the Company or any security convertible or exchangeable into
or exercisable for such capital stock (except for Common
Shares issued pursuant to employee benefit plans referred to
in the Prospectuses, pursuant to the exercise of options
referred to in the Prospectuses or pursuant to the employee
stock purchase plan of the Company referred to in the
Prospectuses) or file any registration statement under the
1933 Act with respect to any of the foregoing (except for
registration statements on Form S-8 with respect to employee
benefit plans referred to in the Prospectuses or the employee
stock purchase plan of the Company referred to in the
Prospectuses).
(k) In accordance with the Cuba Act and without
limitation to the provisions of Sections 6 and 7 hereof, the
Company agrees to indemnify and hold harmless each Manager
from and against any and all loss, liability, claim damage and
expense whatsoever (including fees and disbursements of
counsel), as incurred, arising out of any violation by the
Company of the Cuba Act.
(l) The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, copying
and delivery to the Managers of this Agreement, the International Pricing
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation and
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delivery of the certificates for the Securities to the Underwriters, including
any capital duties, stamp duties and stock or other transfer taxes payable upon
the issuance, sale or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the Managers, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, the Selling Shareholders' respective counsel, accountants and other
advisors and the Trustees and their respective counsel, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(g) hereof and Section 3(g) of the U.S. Purchase Agreement, including
filing fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, provided that the Company's obligations with
respect to the amounts included in this clause (v) and clause (v) of Section 4
of the U.S. Purchase Agreement shall not exceed $10,000 in the aggregate, (vi)
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each
preliminary prospectus, and of the Prospectuses and any amendments or
supplements thereto including any term sheet delivered by the Company pursuant
to Rule 434 of the 1933 Act Regulations, (vii) the preparation, copying and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, and (ix) the filing fees in connection with the
review by the NASD of the terms of the sale of the Securities.
(b) The Selling Shareholders, jointly and severally, will
pay all expenses incident to the performance of their respective obligations
under, and the consummation of the transactions contemplated by this Agreement,
including any stamp duties, capital duties and stock transfer taxes, if any,
payable upon the sale of the Securities to the Underwriters, and their transfer
between the Managers and the U.S. Underwriters.
(c) If this Agreement is terminated by the Lead Managers
in accordance with the provisions of Section 5, Section 9(a)(i) or Section 11
hereof, the Company and the Selling Shareholders, jointly and severally, shall
reimburse the Managers for all of their reasonable out-of-pocket expenses
relating to the transactions contemplated hereby, including the reasonable fees
and disbursements of counsel for the Managers.
(d) The provisions of this Section shall not affect any
agreement among the Company and the Selling Shareholders with repect to such
costs and expenses.
SECTION 5. Conditions of Managers' Obligations. The
obligations of the several Managers hereunder are subject to the
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accuracy of the representations and warranties of the Company and the Selling
Shareholders herein contained, to the performance by the Company and the
Selling Shareholders of their obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with
the consent of the Lead Managers, at a later time and date,
not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as
may be approved by a majority in interest of the Managers; and
at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission
for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Managers. If
the Company has elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations within the prescribed time
period and prior to Closing Time the Company shall have
provided evidence satisfactory to the Lead Managers of such
timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of
the 1933 Act Regulations.
(b) At Closing Time the Lead Managers shall have
received:
(1) The favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for
the Company and the Selling Shareholders, in form and
substance reasonably satisfactory to counsel for the
Managers, to the effect that:
(i) The Company has been duly
incorporated and is validly existing and in
good standing under the laws of the State of
Illinois.
(ii) The Company has corporate power
and authority to conduct its business as
described in the Registration Statement and
to execute and deliver and perform its
obligations under this Agreement, the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement.
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(iii) The Company is duly qualified to
transact business and is in good standing as
a foreign corporation in the States of
Florida, Indiana, Iowa, Maryland, Michigan,
North Carolina, South Carolina, Texas and
Virginia (in rendering such opinion such
counsel shall be entitled to rely solely on
certificates of public officials of such
States).
(iv) The authorized and outstanding
capital stock of the Company is as set forth
in the Prospectuses under the caption
"Capitalization" and under the caption
"Description of Capital Stock"; the issued
and outstanding Common Shares, including the
Securities to be purchased by the Managers
and the U.S. Underwriters from the Selling
Shareholders, have been duly authorized and
validly issued and are fully paid and
non-assessable; and none of the outstanding
shares of capital stock of the Company was
issued in violation of the preemptive rights
of any stockholder of the Company arising by
operation of law, under the charter or
by-laws of the Company or any of its
subsidiaries or, to the knowledge of such
counsel, under any agreement to which the
Company or any of its subsidiaries is a
party.
(v) The shareholders of the Company do
not have any preemptive rights with respect
to the Securities to be purchased by the
Managers and the U.S. Underwriters from the
Selling Shareholders.
(vi) Except as disclosed in or
specifically contemplated by the
Prospectuses, to the knowledge of such
counsel, there are no outstanding options,
warrants or other rights calling for the
issuance of any shares of capital stock of
the Company or any security convertible into
or exchangeable for capital stock of the
Company. The stock option plans of the
Company described in the Prospectuses have
been duly authorized by the Company and the
descriptions of the stock option granted to
▇▇. ▇▇▇▇▇ and the stock option plans of the
Company contained in the Prospectuses are
accurate in all material requests.
(vii) This Agreement, the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement have each been duly authorized,
executed and delivered by the Company.
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(viii) Such counsel has been advised
by the Commission that the Registration
Statement has been declared effective under
the 1933 Act; any required filing of the
Prospectuses pursuant to Rule 424(b) has been
made in the manner and within the time period
required by Rule 424(b); and, to the
knowledge of such counsel, no stop order
suspending the effectiveness of the
Registration Statement has been issued under
the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(ix) The Registration Statement, the
Prospectuses and each amendment or supplement
to the Registration Statement and
Prospectuses as of their respective effective
or issue dates appeared on their face to be
appropriately responsive in all material
respects to the requirements of the 1933 Act
and the 1933 Act Regulations, except that
such counsel need not express any opinion as
to the financial statements, schedules and
other financial data included therein or
excluded therefrom, or the exhibits to the
Registration Statement (except to the extent
set forth in the next sentence of this
paragraph) and such counsel need not assume
responsibility for the accuracy, completeness
or fairness of the statements contained in
the Registration Statement and the
Prospectuses. To the knowledge of such
counsel without having made any independent
investigation and based upon representations
of officers of the Company as to the factual
matters, there were no contracts or documents
required to be described or referred to in,
or to be filed as exhibits to, the
Registration Statement as of its Effective
Date which were not so described, referred to
or filed or incorporated by reference as
exhibits thereto.
(x) The Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 1995, its Quarterly Reports on Form 10-Q
for the quarters ended March 31 and June 30,
1996, its Current Report on Form 8-K dated
October 17, 1996 and the description of the
Common Shares contained in the Company's
Registration Statement on Form 8-A for such
securities, as of their respective filing or
effective dates, appeared on their face to be
appropriately responsive in all material
respects to the requirements of the
applicable provisions of the 1934 Act, the
1934 Act Regulations, the 1933 Act and the
1933 Act Regulations, except that
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such counsel need not express any opinion as
to the financial statements, schedules and
other financial data included therein or
excluded therefrom or the exhibits to such
documents (except to the extent set forth in
the last sentence of paragraph (ix) above).
(xi) The Common Shares conform in all
material respects to the description thereof
under the caption "Description of Capital
Stock" in the Prospectuses, and the form of
certificate used to evidence the Common
Shares is in due and proper form and complies
with all requirements of the Illinois
Business Corporation Act and with any
applicable requirements of the charter and
by-laws of the Company.
(xii) To the knowledge of such counsel
there are no legal or governmental actions,
suits or proceedings pending or threatened
against the Company or any of its
subsidiaries that are required to be
described in the Prospectuses that are not
described as required.
(xiii) The information in the
Prospectuses under "Description of Capital
Stock," "Certain United States Federal Tax
Consequences to Non-United States Holders"
and in the Registration Statement under Item
15 of Form S-3 to the extent that it
constitutes matters of law, summaries of
legal matters, documents or proceedings, or
legal conclusions, has been reviewed by them
and is correct in all material respects; to
the knowledge of such counsel, there are no
Illinois, New York or United States statutes
or regulations that are required to be
described in the Prospectuses that are not
described as required.
(xiv) All descriptions in the
Prospectuses of contracts and other documents
to which the Company or any of its
subsidiaries is a party are accurate in all
material respects.
(xv) No authorization, approval,
consent or order of any governmental
authority or agency or, to the knowledge of
such counsel, any court (other than under the
1933 Act and the 1933 Act Regulations, which
have been obtained, or as may be required
under the securities or blue sky laws of the
various states, as to which such counsel need
express no opinion) is required under the
laws of the United States or the States of
Illinois or New York (except that such
counsel
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need not express any opinion regarding
matters relating to the regulation of
insurance companies as such or consumer
credit laws) to be obtained by the Company
for the due authorization, execution and
delivery of this Agreement, the International
Pricing Agreement, the U.S. Purchase
Agreement and the U.S. Pricing Agreement or
in connection with the offering, issuance or
sale of the International Securities to the
Managers and the U.S. Securities to the U.S.
Underwriters; and, except as otherwise stated
in such opinion (the form of which has
previously been provided to ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Managers,) the
execution, delivery and performance of this
Agreement, the International Pricing
Agreement, the U.S. Purchase Agreement and
the U.S. Pricing Agreement and the
consummation of the transactions contemplated
herein and therein and compliance by the
Company with its obligations hereunder and
thereunder will not, whether with or without
the giving of notice or lapse of time or
both, (A) constitute a breach of, or default
or Repayment Event by the Company under, or
result in the creation or imposition of any
lien, charge or encumbrance upon any property
or assets of the Company or any of its
subsidiaries pursuant to, any contract,
credit agreement, note, or any other
agreement or instrument listed on Schedule D
hereto, (B) violate the provisions of the
charter or by-laws of the Company, (C)
contravene any applicable law, statute, rule
or regulation of the United States or the
States of New York or Illinois, or (D) to the
knowledge of such counsel violate any,
judgment, order, writ or decree of any New
York, Illinois or federal executive,
legislative, judicial, administrative or
regulatory body applicable to the Company or
any of its subsidiaries or any of their
respective properties.
(xvi) To the knowledge of such
counsel, except as disclosed in the
Prospectuses, there are no persons with
registration or other similar rights to have
any securities registered pursuant to the
Registration Statement or otherwise
registered by the Company under the ▇▇▇▇ ▇▇▇.
(xvii) The Company is not an
"investment company" or an entity
"controlled" by an "investment company," as
such terms are defined in the 1940 Act.
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(xviii) No authorization, approval,
consent or order of any governmental
authority or agency or, to the knowledge of
such counsel, any court (other than under the
1933 Act and the 1933 Act Regulations, which
have been obtained or as may be required
under the securities or blue sky laws of the
various states, as to which such counsel need
express no opinion) is required under the
laws of the United States or the States of
Illinois or New York (except that such
counsel need not express any opinion
regarding matters relating to the regulation
of insurance companies as such or consumer
credit laws) to be obtained by the Selling
Shareholders for the execution and delivery
of this Agreement, the International Pricing
Agreement, the U.S. Purchase Agreement and
the U.S. Pricing Agreement or in connection
with the offer or sale of the International
Securities hereunder and the U.S. Securities
pursuant to the U.S. Purchase Agreement or
the consummation of the transactions
contemplated by this Agreement, the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement; and the Trustees are duly and
validly authorized to take each such action
without the approval of any other person or
court and the execution hereof and of the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement by the Trustees is an act which
validly binds each Selling Shareholder which
is a trust to the terms of this Agreement,
the International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement, respectively.
(xix) This Agreement, the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement have each been duly executed and
delivered by or on behalf of each Selling
Shareholder.
(xx) The execution, delivery and
performance of this Agreement, the
International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. Pricing
Agreement and the sale and delivery of the
Securities and the consummation of the
transactions contemplated herein and therein
and compliance by the Selling Shareholders
with the terms of this Agreement and the U.S.
Purchase Agreement have been duly authorized
by all necessary action on the part of the
Selling Shareholders and do not and will not,
whether with
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or without the giving of notice or passage of
time or both, violate, or result in the
creation or imposition of any tax, lien,
charge or encumbrance upon the Securities
pursuant to, any treaty, law, statute,
regulation or decree, nor will such action
result in any violation of the provisions of
the trust agreement or other organizational
or governing instruments of the Selling
Shareholders, if applicable, or any
applicable treaty, law, statute or regulation
under the laws of the United States or the
States of Illinois or New York, or, to the
knowledge of such counsel, violate any
judgment, order, writ or decree of any
government, government instrumentality or
court, foreign or domestic, having
jurisdiction over any Selling Shareholder;
with respect to the Selling Shareholders that
are trusts, the trust agreement or other
organizational or governing instrument
relating to such trust is a valid, binding
and enforceable agreement under the laws of
the State of Illinois and, to such counsel's
knowledge, such agreement or other instrument
has not been modified or revoked and is in
full force and effect and the powers granted
thereby and thereunder to the Trustees were
validly granted and have not been modified or
revoked and are in full force and effect;
and, to the knowledge of such counsel, no
legal action is pending or threatened that
challenges the validity of such trust
agreement or other organizational or
governing instrument or such powers granted
to the Trustees.
(xxi) Based solely upon a review of
the Company's stock transfer book, to the
knowledge of such counsel, each Selling
Shareholder other than ▇▇▇▇ ▇. ▇▇▇▇▇ is, and
immediately prior to Closing time will be,
the sole registered owner of the
International Securities to be sold by such
Selling Shareholder; the Simon Agreement has
been duly authorized, executed and delivered
by the Company and ▇▇▇▇ ▇. ▇▇▇▇▇, and to the
knowledge of such counsel, the Simon
Agreement is in full force and effect,
without termination or cancellation
provisions having been exercised by either
party thereto, and is enforceable in
accordance with its terms except that
enforcement may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting
creditors' rights generally and by general
principles of equity (regardless of whether
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enforcement is sought in equity or at law);
upon payment for the International Securities
and when the Managers take delivery of the
certificates representing the International
Securities and, assuming such certificates
are registered in the names of the Managers
and the Managers purchased such International
Securities for value in good faith (as
defined in Section 1-201 of the Illinois
Uniform Commercial Code (the "UCC")) and
without notice of any adverse claim (as
defined in Section 8-302 of the UCC), each
Manager will have acquired such International
Securities free of any adverse claim; and
such Selling Shareholder has the full right,
power and authority (A) to enter into this
Agreement, the International Pricing
Agreement, the U.S. Purchase Agreement and
the U.S. Pricing Agreement and (B) to sell,
transfer and deliver the Securities to be
sold by such Selling Shareholder under this
Agreement and the U.S. Purchase Agreement.
(2) The favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for
the Managers, with respect to the matters set forth
in (i) (as to the Company's existence and good
standing), (v) (solely as to preemptive rights
arising by operation of law or under the charter or
by-laws of the Company), (vii), (viii), the first
sentence of (ix), (xi) and (xiii) (solely as to the
information in the Prospectus under "Description of
Capital Stock -- Common Shares") of subsection (b)(1)
of this Section.
(3) In giving their opinions required by
subsections (b)(1) and (b)(2), respectively, of this
Section, ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇ and ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇ shall each additionally state that such counsel
has participated in conferences with officers and
representatives of the Company, the Selling
Shareholders and representatives of the independent
accountants of the Company and the Underwriters, at
which the contents of the Registration Statement and
the Prospectuses were discussed, and that although
such counsel is not required to pass upon or assume
any responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Prospectuses (except to
the extent specifically set forth in subsections
(b)(1) and (b)(2) respectively) and are not required
to make an independent check or verification thereof,
except to the extent otherwise set forth in their
opinion, based upon the foregoing, no facts have come
to their
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attention to lead them to believe that as of its
effective date, the Registration Statement, contained
an untrue statement of a material fact or omitted to
state any material fact required to be stated therein
or necessary to make the statements therein not
misleading or the Prospectuses as of their dates
(unless the term "Prospectuses" refers to a
prospectus which has been provided to the Managers by
the Company for use in connection with the offering
of the Securities which differs from the Prospectuses
on file at the Commission at the time the
Registration Statement becomes effective, in which
case at the time it is first provided to the Managers
for such use) and as of the Closing Time contained or
contain an untrue statement of a material fact or
omitted 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, except that such counsel need not express
any opinion or belief as to the financial statements,
schedules and other financial data included or
incorporated by reference therein or excluded from
the Registration Statement or the Prospectuses or the
exhibits to the Registration Statement.
(c) At Closing Time there shall not have been, since
the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and
the Lead Managers shall have received a certificate of the
Company signed by the President or a Vice President of the
Company and the chief financial or chief accounting officer of
the Company, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the
representations and warranties of the Company contained in
Section 1(a) are true and correct with the same force and
effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or
satisfied under this Agreement at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the
Commission. As used in this Section 5(c), the term
"Prospectuses" means the Prospectuses in the form first used
to confirm sales of the Securities.
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(d) At Closing Time the Lead Managers shall have
received a certificate of each of the Selling Shareholders,
dated as of Closing Time, to the effect that (i) to the
knowledge of such Selling Shareholder (or, if such Selling
Shareholder is a trust, to the knowledge of the Trustees
thereof), there has been no material adverse change as
described in Section 5(c), (ii) the representations and
warranties of such Selling Shareholder contained in Section
1(b) are true and correct with the same force and effect as
though expressly made at and as of Closing Time and (iii) such
Selling Shareholder has complied in all material respects with
all agreements and satisfied all conditions on its part to be
performed under this Agreement at or prior to Closing Time.
(e) At the time of the execution of this Agreement,
the Lead Managers shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
a letter dated such date, in form and substance satisfactory
to the Lead Managers, to the effect that (i) they are
independent public accountants with respect to the Company
within the meaning of the 1933 Act, the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations; (ii) in their
opinion, the financial statements and financial statement
schedules, if any, audited by them and included or
incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations; (iii)
based upon limited procedures set forth in detail in such
letter (which shall include, without limitation, the
procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, with respect to the Company's unaudited balance
sheet as of June 30, 1996, and the Company's unaudited
statements of income, shareholders' equity and cashflows for
the twenty-six weeks ended June 30, 1996, and the Company
unaudited statements of income and cash flows for the
twenty-six weeks ended July 2, 1995, included in the
Registration Statement and the Company's condensed financial
statements for the same periods included in the Company's
quarterly report on Form 10-Q for the quarter ended June 30,
1996 and incorporated by reference in the Registration
Statement (collectively, the "Unaudited Financial
Statements")), nothing has come to their attention which
causes them to believe that (A) any material modifications
should be made to the Unaudited Financial Statements for them
to be in conformity with generally accepted accounting
principles or (B) the Unaudited Financial Statements do not
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the 1933
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37
Act Regulations, the 1934 Act and the 1934 Act Regulations or
(C) at a specified date not more than three days prior to the
date of this Agreement, there has been any change in the
capital stock of the Company or any increase in the long-term
debt or any decrease in the working capital or stockholders'
equity of the Company as compared with the amounts shown in
the June 30, 1996 balance sheet included in the Registration
Statement or, during the period from July 1, 1996 to a
specified date not more than three days prior to the date of
this Agreement, there were any decreases as compared with the
corresponding period in the preceding year, in revenues,
income from operations, net income or net income per share of
the Company, except in all instances for changes, increases or
decreases which the Registration Statement and the
Prospectuses disclose have occurred or may occur or which such
letter discloses have occurred; (iv) in addition to the
examination referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have
carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by
reference in the Registration Statement and Prospectuses and
which are specified by the Lead Managers, and have found such
amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other
records of the Company identified in such letter; and (v) they
have compared the information included or incorporated by
reference in the Prospectuses under selected captions with the
disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform
in all material respects with the disclosure requirements of
Items 301 and 402, respectively, of Regulation S-K.
(f) At Closing Time the Lead Managers shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to Closing Time and,
if the Company has elected to rely on Rule 430A of the 1933
Act Regulations, to the further effect that they have carried
out procedures as specified in clause (iv) of subsection (e)
of this Section with respect to certain amounts, percentages
and financial information specified by the Lead Managers and
deemed to be a part of the Registration Statement pursuant to
Rule 430(A)(b) and have found such amounts, percentages and
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38
financial information to be in agreement with the records
specified in such clause (iv).
(g) At the Closing Time the Securities shall have
been approved for inclusion in the Nasdaq National Market and
such approval shall not have been withdrawn or limited.
(h) At Closing Time and at each Date of Delivery
counsel for the Managers shall have been furnished with such
documents and opinions as they may require for the purpose of
enabling them to pass upon the offer and sale of the
International Securities as contemplated herein and the U.S.
Securities as contemplated in the U.S. Purchase Agreement and
related proceedings, or the fulfillment of any of the
conditions herein or therein contained; and all proceedings
taken by the Company or the Selling Shareholders in connection
with the sale of the International Securities as contemplated
herein and the U.S. Securities as contemplated in the U.S.
Purchase Agreement shall be reasonably satisfactory in form
and substance to the Lead Managers and counsel for the
Managers.
(i) In the event that the Managers exercise their
option provided in Section 2(b) hereof to purchase all or any
portion of the International Option Securities, the
representations and warranties of the Company and the Selling
Shareholders contained herein and the statements in any
certificates furnished by the Company and the Selling
Shareholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the
Lead Managers shall have received:
(1) Certificates, dated such Date of
Delivery, of (x) the President or a Vice President of
the Company and of the chief financial or chief
accounting officer of the Company and (y) the Selling
Shareholders confirming that the certificates
delivered at the Closing Time pursuant to Section
5(c) and 5(d) hereof, respectively, remain true and
correct as of such Date of Delivery.
(2) The favorable opinion of ▇▇▇▇▇▇▇▇▇, Will
& ▇▇▇▇▇, counsel for the Company and the Selling
Shareholders, in form and substance satisfactory to
counsel for the Managers, dated such Date of
Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(3) hereof.
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(3) The favorable opinion of ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Managers, dated such Date of
Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion
required by Sections 5(b)(2) and 5(b)(3) hereof.
(4) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in
form and substance satisfactory to the Lead Managers
and dated such Date of Delivery, substantially the
same in form and substance as the letter furnished to
the Lead Managers pursuant to Section 5(e) hereof,
except that the "specified date" in the letter
furnished pursuant to this Section 5(i)(4) shall be a
date not more than three days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Lead Managers by notice to the Company and the Selling
Shareholders at any time at or prior to Closing Time, and such termination
shall be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 3(k), 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Company and the Selling Shareholders jointly and
severally agree to indemnify and hold harmless each Manager and each person, if
any, who controls any Manager within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) or Rule 434 of
the 1933 Act Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in any
preliminary prospectus or prospectus, including the
Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
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(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
alleged untrue statement or omission; provided that (subject
to Section 6(d) below) any such settlement is effected with
the written consent of the indemnifying party and parties; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to the third sentence of Section
6(c) hereof, the fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇ International), reasonably incurred in
investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectuses (or any amendment or supplement thereto), (B) this
indemnity agreement, with respect to any preliminary prospectus, shall not
apply to any loss, liability, claim, damage or expense if a copy of the
International Prospectus (as then amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto to such Manager) was not
sent or given by or on behalf of such Manager to the person asserting any such
loss, liability, claim, damage or expense if such is required by law at or
prior to the written confirmation of the sale of such International Securities
to such person and if the International Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, liability,
claim, damage or expense, and (C) the obligations of each Selling Shareholder
for indemnification pursuant to this Section 6, for contribution pursuant to
Section 7 and for any breach of the representation and
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warranty of such Selling Shareholder set forth in Section 1(b)(vi) of this
Agreement (to the extent such breach does not also constitute a breach of any
other representation and warranty of such Selling Shareholder) (together with
any liability of such Selling Shareholder under Section 6 of the U.S. Purchase
Agreement or for any breach of the representation and warranty set forth in
Section 1(b)(vi) of the U.S. Purchase Agreement (to the extent such breach does
not also constitute a breach of any other representation and warranty of such
Selling Shareholder)) shall be limited to the net proceeds received by such
Selling Shareholder from the sale of his or its Securities pursuant to this
Agreement and the U.S. Purchase Agreement.
In making a claim for indemnification under this Section 6 or
contribution under Section 7 hereof by the Company or the Selling Shareholders,
the indemnified parties may proceed against either (1) both the Company and the
Selling Shareholders jointly or (2) the Company only, but may not proceed
solely against the Selling Shareholders. In the event that the indemnified
parties are entitled to seek indemnity or contribution hereunder against any
loss, liability, claim, damage and expense incurred with respect to a final
judgment from a trial court then, as a precondition to any indemnified party
obtaining indemnification or contribution from any Selling Shareholder, the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution under this
Agreement with respect to such loss, liability, claim, damage or expense (the
"Final Judgment") from the Company and the Selling Shareholders and shall seek
to satisfy such Final Judgment in full from the Company by making a written
demand upon the Company for such satisfaction. Only in the event such Final
Judgment shall remain unsatisfied in whole or in part 30 days following the
date of receipt by the Company of such demand shall any party entitled to
indemnification hereunder have the right to take action to satisfy such Final
Judgment by making demand directly on the Selling Shareholders (but only if and
to the extent the Company has not already satisfied such Final Judgment,
whether by settlement, release or otherwise). The indemnified parties shall,
however, be relieved of their obligation to first obtain a Final Judgment, to
seek to obtain payment from the Company with respect to such Final Judgment or,
having sought such payment, to wait such 30 days after failure by the Company
to immediately satisfy any such Final Judgment if (A) the Company files a
petition for relief under the United States Bankruptcy Code (the "Bankruptcy
Code"), (B) an order for relief is entered against the Company in an
involuntary case under the Bankruptcy Code, (C) the Company makes an assignment
for the benefit of its creditors, or (D) any court orders or approves the
appointment of a receiver or custodian for the Company or a substantial portion
of its assets. The foregoing provisions of this paragraph are not intended to
require any indemnified party to obtain a Final Judgement against the Company
or the Selling Shareholders before obtaining reimbursement of expenses pursuant
to clause (a)(iii) of this Section 6. However, the indemnified parties shall
first seek to obtain such reimbursement in full from the Company by making a
written demand upon the Company for such reimbursement. Only in
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the event such expenses shall remain unreimbursed in whole or in part 30 days
following the date of receipt by the Company of such demand shall any
indemnified party have the right to receive reimbursement of such expenses from
the Selling Shareholders by making written demand directly on the Selling
Shareholders (but only if and to the extent the Company has not already
satisfied the demand for reimbursement, whether by settlement, release or
otherwise). The indemnified parties shall, however, be relieved of their
obligation to first seek to obtain such reimbursement in full from the Company
or, having made written demand therefor, to wait such 30 days after failure by
the Company to immediately reimburse such expenses if (I) the Company files a
petition for relief under the Bankruptcy Code, (II) an order for relief is
entered against the Company in an involuntary case under the Bankruptcy Code,
(III) the Company makes an assignment for the benefit of its creditors, or (IV)
any court orders or approves the appointment of a receiver or custodian for the
Company or a substantial portion of its assets.
(b) Each Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each
Selling Shareholder and each Trustee against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary international
prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Manager through the Lead Managers expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party may assume the defense of such action, with counsel chosen by it, unless
the indemnified parties reasonably object to such assumption on the grounds
that there are legal defenses available to them which are different from, or
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in addition to, those available to such indemnifying party. If the
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding 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 at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
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(e) The provisions of this Section shall not affect any
agreement among the Company and the Selling Shareholders with respect to
indemnification.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the Managers on the
other hand from the offering of the International Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) 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 Shareholders on the one hand and of the Managers
on the other hand in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Managers on the other hand in connection
with the offering of the International Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Selling Shareholders and
the total underwriting discount received by the Managers, in each case as set
forth on the cover of the International Prospectus, bear to the aggregate
initial public offering price of the International Securities as set forth on
such cover.
The relative fault of the Company and the Selling Shareholders
on the one hand and the Managers on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Shareholders or by the Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the Managers agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Managers were
treated as one entity for such purpose) or by
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any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Manager has otherwise been required to pay by reason of any
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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls a Manager within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as such Manager,
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company and each Trustee
shall have the same rights to contribution as the Selling Shareholder that is a
trust of which such Trustee is a Trustee. The Managers' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the
number of Initial International Securities set forth opposite their respective
names in Schedule A hereto and not joint.
Notwithstanding the provisions of this Section 7, each Selling
Shareholder's liability for contribution shall be limited as specified in
clause (c) of the proviso to Section 6(a). Any claim for contribution pursuant
to this Section 7 against any of the Selling Shareholders may be made only in
accordance with the last paragraph of Section 6(a).
The provisions of this Section shall not affect any agreement
among the Company and the Selling Shareholders with respect to contribution.
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SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement and the International Pricing Agreement, or contained in
certificates of officers of the Company or the Selling Shareholders submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Manager or
controlling person, or by or on behalf of the Company or the Selling
Shareholders, and shall survive delivery of the International Securities to the
Managers.
SECTION 9. Termination of Agreement.
(a) The Lead Managers may terminate this Agreement, by notice
to the Company and the Selling Shareholders, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the
International Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as
to make it, in the judgment of the Lead Managers, impracticable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in the Common Shares has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by any of said exchanges or by such system or by order of
the Commission, the NASD or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New York or Illinois
authorities. As used in this Section 9(a), the term "International Prospectus"
means the International Prospectus in the form first used to confirm sales of
the International Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof. Notwithstanding any such termination,
the provisions of Sections 1, 3(k), 6, 7 and 8 hereof shall remain in effect.
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SECTION 10. Default by One or More of the Managers. If one
or more of the Managers shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement and the International Pricing Agreement (the "Defaulted Securities"),
the Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Managers, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Lead Managers shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the number of International Securities to be
purchased on such date, each of the non-defaulting Managers
shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Managers, or
(b) if the number of Defaulted Securities exceeds
10% of the number of International Securities to be purchased
on such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation
of the Managers to purchase and of the relevant Selling
Shareholders to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting Manager.
No action taken pursuant to this Section shall relieve any
defaulting Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Managers to purchase and the relevant Selling Shareholders to
sell the relevant International Option Securities, as the case may be, either
(i) the Lead Managers or (ii) the Company and any Selling Shareholder shall
have the right to postpone Closing Time for a period not exceeding seven days
in order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "Manager" includes any person substituted for a Manager under this Section
10.
SECTION 11. Default by One or More of the Selling
Shareholders. If a Selling Shareholder shall fail at Closing Time or at a Date
of Delivery to sell and deliver the number of International Securities that
such Selling Shareholder or Selling
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Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of International Securities to be sold by them hereunder
to the total number to be sold by all Selling Shareholders as set forth in
Schedule B hereto, then the Managers may, at the option of the Lead Managers,
by notice from the Lead Managers to the Company and the non-defaulting Selling
Shareholders, either (a) terminate this Agreement without any liability on the
part of any non-defaulting party except that the provisions of Sections 1,
3(k), 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to
purchase the International Securities which the non-defaulting Selling
Shareholders have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Shareholder so defaulting from liability,
if any, in respect of such default.
In the event of any default by any Selling Shareholder as
referred to in this Section 11, each of the Lead Managers, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectuses or in
any other documents or arrangements.
SECTION 12. Notices. 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 Managers shall be directed to the Lead Managers at ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇;
notices to the Company shall be directed to it at APAC TeleServices, Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇
▇. ▇▇▇▇▇; notices to any Selling Shareholder which is not a trust shall be
directed to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and notices to the Selling Shareholders
which are trusts shall be directed to M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, c/o TCS Group,
L.L.C., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 13. Parties. This Agreement and the International
Pricing Agreement shall each inure to the benefit of and be binding upon the
Managers, the Company and the Selling Shareholders and their respective
successors, heirs and legal representatives. Nothing expressed or mentioned in
this Agreement or the International Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Managers, the
Company and the Selling Shareholders and their respective successors, heirs and
legal representatives and the controlling persons, officers and directors and
Trustees referred to in Sections 6 and 7 and their respective successors, heirs
and legal representatives, any legal or equitable right,
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remedy or claim under or in respect of this Agreement or the International
Pricing Agreement or any provision herein or therein contained. This Agreement
and the International Pricing Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
Managers, the Company and the Selling Shareholders and their respective
successors, heirs and legal representatives and said controlling persons,
officers and directors and Trustees and their respective successors, heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Manager shall be deemed to be
a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE
PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to each of the Company and the Selling
Shareholders, a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Managers, the Company
and the Selling Shareholders in accordance with its terms.
Very truly yours,
APAC TELESERVICES, INC.
By:
----------------------------------------
Title:
-------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Seven Hundred Thirty U/A/D 4/2/94
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
-------------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Four Hundred Thirty U/A/D 4/2/94
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-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not individually,
but solely as Co-Trustee of the Trust
Four Hundred Thirty U/A/D 4/2/94
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not individually, but
solely as Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not individually,
but solely as Trustee of the ▇▇▇▇▇▇▇▇
1996 Charitable Remainder Unitrust
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
----------------------------------------
Authorized Signatory
For themselves and as Lead Managers of the other
Managers named in Schedule A hereto.
-51-
52
SCHEDULE A
Number of
Initial
International
Name of Manager Securities
--------------- ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International . . . . . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇ Brothers International (Europe). . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. . . . . . . . . . . . . . . . . . . . . . . .
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820,000
=======
Sch A - 1
53
SCHEDULE B
Maximum
Number of Number of
Initial International
International Option
Securities Securities
Name to be sold to be sold
---- ---------- ----------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000
▇▇▇▇▇▇▇▇ 1996 Charitable
Remainder Unitrust . . . . . . . . . . . . . . . . . . . . . . . . 220,000 120,000
Trust Seven Hundred Thirty . . . . . . . . . . . . . . . . . . . . . . . .
U/A/D 4/2/94 . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Trust Four Hundred Thirty . . . . . . . . . . . . . . . . . . . . . . . . .
U/A/D 4/2/94 . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
▇▇▇▇ ▇. ▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 3,000
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . 820,000 123,000
======= =======
Sch B - 1
54
SCHEDULE C
Certain Clients of the Company
▇.▇. Penney Life Insurance Company (each contract with ▇.▇.
▇▇▇▇▇▇ Life Insurance Company includes an exhibit thereto
regarding the services to be performed for Mass Marketing
Insurance)
American Bankers Life Assurance Company
Discover Card Services, Inc.
Western Union Financial Services, Inc.
United Parcel Service General Services Company
Chevy Chase Bank
Quill Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Corporation
AT&T
Sch C - 1
55
SCHEDULE D
Certain Contracts and Other Agreements
1. Credit Agreement, dated as of June 5, 1996, among APAC TeleServices,
Inc., the Lenders party thereto and ▇▇▇▇▇▇ Trust and Savings Bank.
2. APAC TeleServices, Inc. Revolving Note (Facility A) dated as of _____,
19 __.
3. APAC TeleServices, Inc. Revolving Note (Facility B) dated as of _____,
19 __.
4. APAC TeleServices, Inc. Facility B Term Note dated as of _____, 19 __.
5. All Industrial Revenue Bonds described in the "Notes to Financial
Statements" contained in the Prospectus.
6. Registration Rights Agreement dated as of October 3, 1995 between APAC
TeleServices, Inc., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Co-Trustees of the
1994 ▇▇▇▇▇▇▇▇ Family Trust No. 1 u/a/d April 2, 1994 and the 1994
▇▇▇▇▇▇▇▇ Family Trust No. 2 u/a/d April 2, 1994, as co-trustees.
7. Tax Agreement dated as of October 2, 1995 between APAC TeleServices,
Inc., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Co-Trustees of the 1994 ▇▇▇▇▇▇▇▇
Family Trust No. 1 u/a/d April 2, 1994 and the 1994 ▇▇▇▇▇▇▇▇ Family
Trust No. 2 u/a/d April 2, 1994, as co-trustees.
8. Each contract and agreement between the Company and the following
clients of the Company:
▇.▇. ▇▇▇▇▇▇ Life Insurance Company (each contract with ▇.▇.
Penney Life Insurance Company includes an exhibit thereto
regarding the services to be performed for Mass Marketing
Insurance)
American Bankers Life Assurance Company
Discover Card Services, Inc.
Western Union Financial Services, Inc.
United Parcel Service General Services Company
AT&T
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Corporation
Chevy Chase Bank
Quill Corporation
Sch D - 1
56
Exhibit A
820,000 Shares
APAC TELESERVICES, INC.
(an Illinois corporation)
Common Shares
(Par Value $.01 Per Share)
PRICING AGREEMENT
-----------------
, 1996
-------
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
as Lead Managers of the several Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Dear Sirs:
Reference is made to the International Purchase Agreement dated
_______, 1996 (the "International Purchase Agreement") relating to the purchase
by the several Managers named in Schedule A thereto, for whom you are acting as
representatives (the "Lead Managers"), of the above Common Shares (the "Initial
International Securities"), of APAC TeleServices, Inc., an Illinois corporation
(the "Company").
Pursuant to Section 2 of the International Purchase Agreement, the
Company and the Selling Shareholders named in Schedule B to the International
Purchase Agreement (the "Selling Shareholders") agree with each Manager as
follows:
1. The initial public offering price per share for the
Initial International Securities, determined as provided in said
Section 2, shall be $_________________.
2. The purchase price per share for the Initial International
Securities to be paid by the several Managers
Exh. A - 1
57
shall be $ , being an amount equal to the initial public
offering price set forth above less $ per share.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
Exh. A - 2
58
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders,
a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Managers, the Company and the Selling
Shareholders in accordance with its terms.
Very truly yours,
APAC TELESERVICES, INC.
By:
---------------------------
Title:
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Seven
Hundred Thirty U/A/D 4/2/94
Exh. A - 3
59
-------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, not
individually, but solely as
Co-Trustee of the Trust Four
Hundred Thirty U/A/D 4/2/94
-------------------------------
M. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, not
individually, but solely as
Trustee of the ▇▇▇▇▇▇▇▇ 1996
Charitable Remainder Unitrust
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Exh. A - 4
60
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE)
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
---------------------------------------
Authorized Signatory
For themselves and as Lead Managers of the
other Managers named in the Purchase Agreement
Exh. A - 5
