EXHIBIT 1.1
5,000,000 Shares
Nationwide Electric, Inc.
Common Stock
UNDERWRITING AGREEMENT
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_______________, 1998
BT Alex. Xxxxx Incorporated
Xxxxx Xxxxxxx Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Nationwide Electric, Inc., a Delaware corporation (together with its
wholly-owned subsidiary, Xxxxxxx Electric Co. ("Xxxxxxx"), the "Company"),
proposes to sell to the several underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 5,000,000 shares of the Company's Common
Stock, $.01 par value (the "Firm Shares"). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 750,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
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accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
Simultaneously with the closing with respect to the purchase of the Firm
Shares by the Underwriters, the Company will acquire, through acquisitions of
either shares of outstanding capital stock or assets, each of the Acquired
Companies (as hereinafter defined) (collectively, the "Acquisitions"), the
consideration for which will be a combination of cash and shares of the
Company's Common Stock as described in the Registration Statement (as
hereinafter defined).
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company.
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The Company represents and warrants to each of the Underwriters as follows:
(a) A registration statement on Form S-1 (File No. 333-57013) with respect
to the Shares has been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, as amended at the time it becomes
effective, together with any registration statement filed by the Company
pursuant to Rule 462(b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted therefrom
in reliance upon Rule 430A and contained in the Prospectus referred to below,
has become effective under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement.
"Prospectus" means (a) the form of prospectus first filed with the Commission
pursuant to Rule 424(b) or (b) the last preliminary prospectus included in the
Registration Statement filed prior to the time it becomes effective or filed
pursuant to Rule 424(a) under the Act that is delivered by the Company to the
Underwriters for delivery to purchasers of the Shares, together with the term
sheet or abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "Preliminary Prospectus."
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement.
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Each of The Xxxxxxx Company ("Xxxxxxx-Xxxxx"), Xxxxxxxxx Electric Co. Inc.
(including its wholly-owned subsidiary, Eagle Electrical Systems, Inc.,
"Xxxxxxxxx") and Potter Electric Company, Inc. ("Potter," and collectively with
Xxxxxxx-Xxxxx and Xxxxxxxxx, the "Acquired Companies") and Xxxxxxx has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement. As of the date hereof, the Company has no
subsidiaries except those listed as Exhibit 21.1 to the Registration Statement.
The Company, Xxxxxxx and each of the Acquired Companies are duly qualified to
transact business as a foreign corporation in all jurisdictions in which the
conduct of their respective businesses requires such qualification, except where
the failure to be so qualified would not have a material adverse effect,
individually or in the aggregate, on the business, properties, assets, results
of operations or condition (financial or otherwise) of either the Company,
Xxxxxxx, Xxxxxxx-Xxxxx or Xxxxxxxxx, after giving effect to the Acquisitions
(any such effect is hereinafter referred to as a "Material Adverse Effect"). The
outstanding shares of capital stock of each of Xxxxxxx and the Acquired
Companies have been duly authorized and validly issued and are fully paid and
non-assessable. As of the Closing Date (as hereinafter defined), after giving
effect to the Acquisitions, all of the outstanding shares of capital stock of
Xxxxxxx, Xxxxxxx-Xxxxx and Xxxxxxxxx will be owned by the Company or another
subsidiary of the Company free and clear of all liens, encumbrances and claims
and all of the tangible and intangible assets of Potter will be owned by the
Company free and clear of all liens, claims, mortgages, security interests,
restrictions and encumbrances of any nature, other than certain "Current
Liabilities" (as defined in the Asset Purchase Agreement relating to the
Company's acquisition of Potter's assets) of Potter which the Company has agreed
to assume and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in Xxxxxxx or any of the Acquired
Companies will be outstanding.
(c) The outstanding shares of Common Stock, Redeemable Preferred Stock and
Class A Nonvoting Common Stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; the Shares to be issued
and sold by the Company pursuant to the terms of this Agreement have been duly
authorized and when issued and paid for as contemplated herein will be validly
issued, fully paid and non-assessable; and no preemptive rights of stockholders
exist with respect to any of the Shares or the issue and sale thereof. Neither
the filing of the Registration Statement nor the offering or sale of the Shares
as contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of any
shares of Common Stock. Upon completion of the Acquisitions in the manner
described in the Registration Statement, the shares of Common Stock of the
Company to be issued in such Acquisitions will be duly authorized, validly
issued, fully paid and non-assessable.
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(d) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct in all material respects. All of the Shares
conform to the description thereof contained in the Registration Statement in
all material respects. The form of certificates for the Shares conforms to the
corporate law of the jurisdiction of the Company's incorporation.
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(e) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares or, after
due inquiry by the Company, notified the Company of the institution of
proceedings for that purpose. The Registration Statement contains, in all
material respects, and the Prospectus and any amendments or supplements thereto
will contain, in all material respects, all statements which are required to be
stated therein by, and will conform in all material respects to, the
requirements of the Act and the Rules and Regulations. The Registration
Statement and any amendment thereto do not contain, and will not contain, any
untrue statement of a material fact and do not omit, and will not omit, to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue statement
of material fact; and do not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in the
preparation thereof.
(f) The combined financial statements of the Company and the separate
financial statements of Xxxxxxx, Xxxxxxx-Xxxxx and Xxxxxxxxx, in each case
together with related notes as set forth in the Registration Statement, present
fairly the financial position and the results of operations and cash flows of
the Company, Xxxxxxx and of each of Xxxxxxx-Xxxxx and Xxxxxxxxx, respectively,
at the indicated dates and for the indicated periods. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, except as disclosed
therein or in the notes thereto, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary financial
and statistical data included in the Registration Statement presents fairly the
information shown therein and such data have been compiled on a basis consistent
with the financial statements presented therein and the books and records of the
Company. The pro forma combined financial statements and other pro forma
financial information of the Company and the Acquired Companies, together with
the related notes, as set forth in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in accordance
with the Commission's rules with respect to pro forma financial statements, have
been properly compiled on the pro forma bases described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(g) Deloitte & Touche LLP and McGladrey & Xxxxxx LLP, who have certified
certain of the financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required by the
Act and the Rules and Regulations.
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(h) Except as set forth in the Registration Statement, there is no action,
suit, claim or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of the Acquired Companies before any court
or administrative agency or otherwise which if determined adversely to the
Company or such Acquired Company would have a Material Adverse Effect or prevent
the consummation of the transactions contemplated hereby.
(i) Each of the Company and the Acquired Companies has good and marketable
title to all of its properties and assets reflected in its financial statements
(or as described in the Registration Statement, if applicable) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as described in the
Registration Statement) or which would not have a Material Adverse Effect. Each
of the Company and the Acquired Companies occupies its leased properties under
valid and binding leases conforming in all material respects to the description
thereof, if any, set forth in the Registration Statement.
(j) Each of the Company, Xxxxxxx, Xxxxxxx-Xxxxx and Xxxxxxxxx have filed
all Federal, State, local and foreign income tax returns which have been
required to be filed and have paid all taxes indicated by said returns and all
assessments received by it or any of them to the extent that such taxes have
become due and are not being contested in good faith, except for any failure to
file income tax returns or pay taxes or assessments which would not have a
Material Adverse Effect.
(k) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any change or any development that would have a Material Adverse Effect, whether
or not occurring in the ordinary course of business, and there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Company or any of the Acquired Companies, other
than transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be amended or
supplemented, or otherwise disclosed in writing to the Underwriters. Neither
the Company nor any of the Acquired Companies has any material contingent
obligations which are not disclosed in the Registration Statement, as it may be
amended or supplemented, or in the Company's or such Acquired Company's
financial statements which are included in the Registration Statement, or
otherwise disclosed in writing to the Underwriters.
(l) Neither the Company nor any of the Acquired Companies is, or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-Laws or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and which violation or default would have
a Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions
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herein contemplated and the fulfillment of the terms hereof will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of the Acquired Companies is a party, or
of the Charter or By-Laws of the Company or any of the Acquired Companies or any
order, rule or regulation applicable to the Company or any of the Acquired
Companies of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction, except for any such conflict,
breach or default that would not have a Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby.
(m) Each approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein contemplated (except
such additional steps as may be required by the Commission or the National
Association of Securities Dealers, Inc. (the "NASD")) has been obtained or made
and is in full force and effect.
(n) The Company and each of the Acquired Companies holds all licenses,
certificates and permits from municipal, county, state, federal or other
governmental authorities which are necessary to the conduct of their businesses
or the absence of which would have a Material Adverse Effect; and neither the
Company nor any of the Acquired Companies has infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement would have a
Material Adverse Effect. The Company knows of no infringement by others of
patents, patent rights, trade names, trademarks or copyrights owned by or
licensed to the Company or any of the Acquired Companies which would have a
Material Adverse Effect.
(o) Neither the Company, nor to the Company's best knowledge, any of its
affiliates, or any of the Acquired Companies or any of their affiliates, has
taken or may take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.
(p) Neither the Company nor any of the Acquired Companies is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "1940 Act") and the rules and regulations
of the Commission thereunder.
(q) Except as described in Exhibit A hereto, the Company and each of the
Acquired Companies maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain
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accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) The Company and each of the Acquired Companies carries, or are covered
by, insurance in such amounts and covering such risks as is reasonably adequate
for the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in the Company's industry.
(s) The Company, Xxxxxxx, Xxxxxxx-Xxxxx and Xxxxxxxxx are in compliance
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any of the Acquired Companies would have any liability;
neither the Company nor any of the Acquired Companies has incurred nor expects
to incur liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any of the Acquired Companies would have any liability that
is intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification, except in any such case for any failure to
comply, "reportable event" or liability that would not have a Material Adverse
Effect.
(t) No labor dispute with the employees of the Company or any of the
Acquired Companies exists, or to the knowledge of the Company, is threatened,
other than such disputes which would not have a Material Adverse Effect.
(u) There is (i) no significant unfair labor practice complaint pending
against the Company or any of the Acquired Companies or, to the knowledge of the
Company, threatened against any of them, before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of the Acquired
Companies, or to the knowledge of the Company, threatened against any of them,
and (ii) no significant strike, slowdown or stoppage pending against the Company
or any of the Acquired Companies or, to the knowledge of the Company, threatened
against it or any of the Acquired Companies, except for such actions specified
in clause (i) or (ii) above, which would not have a Material Adverse Effect.
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2. Purchase, Sale and Delivery of the Firm Shares.
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(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $_____ per share, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made in
same day funds via wire transfer to the order of the Company against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of BT
Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m.,
Baltimore time, on the third business day after the date of this Agreement or at
such other time and date not later than five business days thereafter as you and
the Company shall agree upon, such time and date being herein referred to as the
"Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Representatives request in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day prior to the
Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in paragraph (a) of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option and the time and date at which such certificates are to be delivered. The
time and date at which certificates for Option Shares are to be delivered shall
be determined by the Representatives but shall not be earlier than three nor
later than 10 full business days after the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein referred to as
the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to 5,000,000, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option Shares granted
hereunder may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters. You, as Representatives of the several Underwriters,
may cancel such option at
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any time prior to its expiration by giving written notice of such cancellation
to the Company. To the extent, if any, that the option is exercised, payment for
the Option Shares shall be made on the Option Closing Date in same day funds via
wire transfer to the order of the Company against delivery of certificates
therefor at the offices of BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx.
3. Offering by the Underwriters.
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It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company.
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The Company covenants and agrees with the several Underwriters that:
(a) The Company will (A) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the Rules and
Regulations is followed, to prepare and timely file with the Commission under
Rule 424(b) of the Rules and Regulations a Prospectus in a form approved by the
Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations.
(b) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
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(c) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), and of all amendments thereto, as the Representatives
may reasonably request.
(d) The Company will comply with the Act and the Rules and Regulations,
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of
the Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not materially misleading,
or, if it is necessary at any time to amend or supplement the Prospectus to
comply with any law, the Company promptly will prepare and file with the
Commission an appropriate amendment to the Registration Statement or supplement
to the Prospectus so that the Prospectus as so amended or supplemented will not,
in the light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(e) The Company will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(f) The Company will, for a period of five years from the Closing Date,
deliver to the Representatives copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its stockholders
generally or filed with any securities exchange pursuant to the requirements of
such exchange or with the Commission pursuant to the Act or the Exchange Act.
The Company will deliver to the Representatives similar reports with respect to
significant subsidiaries, as that term is defined in Regulation S-X promulgated
by the Commission, which are not consolidated in the Company's financial
statements.
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(g) No offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other securities convertible into or exchangeable
or exercisable for shares of Common Stock or derivative of Common Stock (or
agreement for such) will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by the Company without the prior written
consent of BT Alex. Xxxxx Incorporated, except for the grant of employee stock
options (up to a maximum of 500,000 shares) under each of the Non-Qualified
Stock Option Plan or the Incentive Stock Option Plan, and for shares issued (i)
in connection with acquisitions of businesses and (ii) pursuant to the
Nationwide Executive Stock Purchase Plan (up to a maximum of 250,000 shares).
(h) The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange.
(i) The Company has caused each officer and director and certain
shareholders of the Company and each person acquiring shares of the Company's
Common Stock in connection with the Acquisitions to furnish to you, on or prior
to the date of this Agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person has agreed
not to offer, sell, sell short or otherwise dispose of any shares of Common
Stock of the Company or other capital stock of the Company, or any other
securities convertible, exchangeable or exercisable for shares of Common Stock
or derivative of Common Stock owned by such person (or as to which such person
has the right to direct the disposition of) or request the registration for the
offer or sale of any of the foregoing for a period of one year after the date of
this Agreement, directly or indirectly, except with the prior written consent of
BT Alex. Xxxxx Incorporated ("Lockup Agreements").
(j) The Company will (i) use its reasonable best efforts to satisfy all
conditions precedent to the other parties' obligation to close the Acquisitions
which are within the Company's reasonable control, (ii) use its reasonable best
efforts to cause each other party to such agreements to satisfy all conditions
precedent to the Company's obligation to close the Acquisitions which are within
such other party's reasonable control and (iii) promptly notify the Underwriters
of the occurrence of any event which is reasonably likely to result in the non-
consummation of any of the Acquisitions on the Closing Date.
(k) The Company shall apply the net proceeds of its sale of the Shares as
set forth in the Prospectus and shall file such reports with the Commission with
respect to the sale of the Shares and the application of the proceeds therefrom
as may be required in accordance with Rule 463 under the Act.
(l) The Company shall not invest, or otherwise use the proceeds received
by the Company from its sale of the Shares in such a manner as would require the
Company or any of the Acquired Companies to register as an investment company
under the 1940 Act.
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(m) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common Stock.
(n) The Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably be expected
to constitute, the stabilization or manipulation of the price of any securities
of the Company.
5. Costs and Expenses.
The Company will pay all costs, expenses and fees incident to the
performance of its obligations under this Agreement and in connection with the
Acquisitions, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company; during the period specified in Section 4(d) hereof (but not
exceeding nine months after the effective date of the Registration Statement),
the cost of printing and delivering to, or as requested by, the Underwriters
copies of the Registration Statement, Preliminary Prospectuses, the Prospectus
and this Agreement and the Underwriters' Invitation Letter; the fees of the
Commission; the filing fee pursuant to NASD Rule 2710 (the "NASD Fee"); transfer
agent and registrar fees and expenses; and the Listing Fee of the New York Stock
Exchange. The Company shall not, however, be required to pay for any of the
Underwriters' expenses (other than the NASD Fee) except that, if this Agreement
shall not be consummated because the conditions in Section 6 hereof are not
satisfied, or because this Agreement is terminated by the Representatives
pursuant to Section 11 hereof, or by reason of any failure, refusal or inability
on the part of the Company to perform any undertaking or satisfy any condition
of this Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure to satisfy said condition or to comply with said
terms is due to the default or omission of any Underwriter, then the Company
shall reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. Conditions of Obligations of the Underwriters.
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:
-13-
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made, and any request of
the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission and no
injunction, restraining order, or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxxxx, Mag & Fizzell,
P.C., counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that it may
be relied upon by counsel to the Underwriters) to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement (the "Business"); the
Company is duly qualified to transact its Business in all jurisdictions in which
the conduct of its Business requires such qualification, or in which the failure
to qualify would have a Material Adverse Effect; and, to the knowledge of such
counsel, the outstanding shares of capital stock of Xxxxxxx, Xxxxxxx-Xxxxx and
Xxxxxxxxx will be owned by the Company, free and clear of all liens,
encumbrances and claims and all of the tangible and intangible assets of Potter
will be owned by the Company free and clear of all liens, claims, mortgages,
security interests, restrictions and encumbrances of any nature other than
certain "Current Liabilities" (as defined in the Asset Purchase Agreement
relating to the Company's acquisition of Potter's assets) of Potter which the
Company has agreed to assume; and to the knowledge of such counsel, no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any shares of capital stock, or
of ownership interests in, any of the Acquired Companies will be outstanding.
(ii) The Company has authorized and outstanding capital stock as set forth
under the caption "Capitalization" in the Prospectus; the outstanding shares of
the Company's Common Stock, Class A Nonvoting Common Stock and Redeemable
Preferred Stock have been duly authorized and validly issued and are fully paid
and non-assessable; all of the Shares conform in all material respects to the
description thereof contained in the Prospectus; the certificates for the
Shares, assuming they are in the form filed with the Commission, are in due and
proper form; the shares of Common Stock, including the Option Shares, if any, to
be sold by the Company pursuant to this Agreement and the shares of Common Stock
of the Company to be issued in
-14-
connection with the Acquisitions have been duly authorized and will be validly
issued, fully paid and non-assessable when issued and paid for as contemplated
by this Agreement; and no statutory, or to the knowledge of such counsel,
contractual preemptive rights of stockholders exist with respect to any of the
Shares or the shares to be issued in connection with the Acquisitions or the
issue or sale thereof.
(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in the
Prospectus, to the knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise, which has
not been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any shares of Common Stock or other securities of
the Company included in the Registration Statement or the right, as a result of
the filing of the Registration Statement, to require registration under the Act
of any shares of Common Stock or other securities of the Company.
(iv) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order proceedings with respect
thereto have been instituted or are pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Act and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to the financial
statements, notes thereto and other financial and statistical information
included therein or any information furnished to the Company by or through the
Representatives specifically for use therein).
(vi) The statements under the captions "Business--Services,"
"--Employees," "Management--Employment Agreements," "--1998 Stock Option Plans,"
"--Stock Purchase Plans," "Certain Transactions," "Description of Capital Stock"
and "Shares Eligible for Future Sale" in the Prospectus, insofar as such
statements constitute a summary of documents referred to therein or matters of
law, fairly summarize in all material respects the information called for with
respect to such documents and matters.
(vii) Each agreement with respect to the Acquisitions to which the
Company is a party (all of which have been filed with the Commission to the
extent required to be filed as exhibits to the Registration Statement) has been
duly authorized, executed and delivered by the Company
-15-
and constitutes the valid and binding obligation of the Company, except to the
extent that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of equity
regardless of whether enforceability is considered in a proceeding in equity or
at law.
(viii) To the knowledge of such counsel, there are no contracts or
documents required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are not so filed
or described as required. All such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly summarized
in all material respects.
(ix) To the knowledge of such counsel, there are no material legal
or governmental proceedings pending or threatened against the Company or any of
the Acquired Companies, except as set forth in the Prospectus.
(x) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Certificate of Incorporation or By-Laws, as
amended or restated, of the Company, or to the knowledge of such counsel, any
agreement or instrument to which the Company is a party or by which the Company
is bound.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is required to be made or obtained by the Company or necessary
in connection with the execution and delivery of this Agreement and the
consummation of the transactions herein contemplated (other than as may be
required by the NASD as to which such counsel need express no opinion) except
such as have been obtained or made, specifying the same.
(xiii) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and application
of the net proceeds therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
In rendering such opinion Xxxxxxx, Mag & Fizzell, P.C. may provide that its
opinion is limited to matters governed by the laws of Missouri and the General
Corporation Law of the State of Delaware or Federal securities laws of the
United States, and may rely on counsel (such counsel having been deemed
acceptable by the Underwriters) to one or more of the Acquired Companies with
respect to matters related to the Acquired Companies, provided that, in lieu of
such reliance, Xxxxxxx, Mag & Fizzell, P.C. may provide separate opinions of
such counsel so long as such opinions are addressed to the Underwriters, and
further provided that in each case
-16-
Xxxxxxx, Mag & Fizzell, P.C. shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition to the
matters set forth above, the opinion of Xxxxxxx, Mag & Fizzell, P.C. shall also
include a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration Statement, at the
time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, notes thereto and other financial and statistical information
included therein or any information furnished to the Company by or throgh the
Representatives specifically for use therein). With respect to such statement,
Xxxxxxx, Mag & Fizzell, P.C. may state that their belief is based upon the
procedures set forth therein, but is without independent check and verification.
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinions of counsel for Xxxxxxx and
each of the Acquired Companies, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that it may
be relied upon by counsel to the Underwriters) to the following effect, provided
that the opinions of counsel for Xxxxxxx, Xxxxxxxxx and Xxxxxx will not include
the opinion in clause (ii) below, and the opinion of counsel for Xxxxxxx will
not include the opinions in clause (iii) below.
(i) The Acquired Company or Xxxxxxx, as the case may be, has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement (the "Business"); the Acquired Company or Xxxxxxx,
as the case may be, is duly qualified to transact its Business in all
jurisdictions in which the conduct of its Business requires such qualification,
or in which the failure to qualify would have a Material Adverse Effect.
(ii) Upon consummation of the Acquisition, the outstanding shares of
capital stock of the Acquired Company will have been duly authorized and validly
issued and will be fully paid and non-assessable and will be owned by the
[Company].
(iii) The agreements with respect to the Acquisition of the Acquired
Company have been duly authorized, executed and delivered by the Acquired
Company and constitute the valid and binding obligations of the Acquired
Company, except to the extent that enforcement thereof may
-17-
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law.
-18-
(iv) To the knowledge of such counsel, there are no material legal or
governmental proceedings pending or threatened against the Acquired Company.
(v) The execution and delivery of this Agreement and the consummation of
the transactions herein contemplated do not and will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under,
the Certificate or Articles of Incorporation or By-Laws, as amended or restated,
of Xxxxxxx or the Acquired Company, as the case may be, or to the knowledge of
such counsel, any agreement or instrument to which Xxxxxxx or the Acquired
Company, as the case may be, is a party or by which Xxxxxxx or the Acquired
Company, as the case may be, is bound.
In rendering such opinions, each of counsel for Xxxxxxx and the Acquired
Companies may provide that its opinion is limited to matters governed by the
laws of the jurisdiction of incorporation of Xxxxxxx or the applicable Acquired
Company, as the case may be.
(d) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv) and (xi) of Paragraph (b) of this Section 6, and
that the Company is a duly organized and validly existing corporation under the
laws of the State of Delaware. In rendering such opinion, Piper & Marbury
L.L.P. may rely as to all matters governed other than by the laws of the State
of Delaware or Federal laws on the opinions of counsel referred to in Paragraph
(b) of this Section 6. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the Registration
Statement, or any amendment thereto, as of the time it became effective under
the Act (but after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act) as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii) the Prospectus,
or any supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact, necessary in order to make the statements, in the light of the
circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(e) You shall have received, on each of the date hereof, the Closing Date
and the Option Closing Date, as the case may be, letters dated the date hereof,
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, of Deloitte & Touche LLP and McGladrey & Xxxxxx,
LLP confirming that they are independent public
-19-
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating that in their opinion the financial
statements and schedules examined by them and included in the Registration
Statement comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations; and
containing such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the financial
statements and certain financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act
and no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration Statement were true and
correct in all material respects, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred that would require,
pursuant to Section 4(d) hereof, a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, there has not been any change or
development that would have a Material Adverse Effect, whether or not arising in
the ordinary course of business.
(g) The Company shall have furnished to the Representatives such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.
-20-
(h) The Firm Shares and Option Shares, if any, shall have been approved
for listing upon notice of issuance on the New York Stock Exchange.
(i) The Lockup Agreements described in Section 4(i) shall be in full force
and effect.
(j) Each of the Acquisitions shall have been completed upon the terms set
forth in the Prospectus and in the agreements governing such Acquisitions
simultaneously with the closing of the purchase of the Firm Shares by the
Underwriters on the Closing Date.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. Conditions of the Obligations of the Company.
--------------------------------------------
The obligations of the Company to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that: (a) at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened and (b) each of the Acquisitions shall have
been completed upon the terms set forth in the Prospectus and in the agreements
governing such Acquisitions simultaneously with the closing of the purchase of
the Firm Shares by the Underwriters on the Closing Date.
8. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or
-21-
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and will reimburse each Underwriter and each such controlling person
upon demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that the Company will not be liable in
any such case to the extent that (i) any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement,
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof or (ii) if it is finally judicially determined that such
loss, liability, claim or damage (or actions or proceedings in respect thereof)
resulted from the fct that the Underwriter sold the Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus, or a Prospectus as amended or supplemented, and
the Prospectus, or the Prospectus as so amended or supplemented, would have
corrected such untrue statement or omission of a material fact. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the offering of the
Shares, whether or not the Company, or any such director, officer or controlling
person is a party to any action or proceeding, only if such subpoena relates to
either (i) or (ii) set forth in this Section 8(b); provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity
-22-
with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof or (ii) if it
isfinally judicially determined that such loss, liability, claim or damage (or
actions or proceedings in respect thereof) resulted from the fact that the
Underwriter sold the Shares to a person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus, or
a Prospectus as amended or supplemented, and the Prospectus, or the Prospectus
as so amended or supplemented, would have corrected such untrue statement or
omission of a material fact. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any action or proceeding (including any governmental
investigation) is instituted involving any person in respect of which indemnity
may be sought pursuant to this Section 8, such person (the "indemnified party")
shall promptly notify each person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In case any
such proceeding is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may elect, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and shall pay as incurred the reasonable fees and disbursements of such
counsel related to such action or proceeding. In any such action or proceeding,
any indemnified party shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, the indemnifying party shall pay as
incurred (or within 30 days of presentation) the reasonable fees and expenses of
the counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impladed parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
reasonably acceptable to the indemnified party within a reasonable period of
time after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) and by the Company in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be
-23-
liable for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions, or failure to deliver a Prospectus, or a Prospectus, as
amended or supplemented, that would have corrected such statements or omissions,
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bears to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the
Underwriters, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
-24-
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or her or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or her or it as an additional defendant in any such proceeding in which such
other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company), you, as Representatives of
the Underwriters, shall use your reasonable best efforts to procure within 36
hours thereafter one or more of the other Underwriters, or any others, to
purchase from the Company such amounts as may be agreed upon and upon the terms
set forth herein, the Firm Shares or Option Shares, as the case may be, which
the defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall
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not have procured such other Underwriter or Underwriters, or any others, to
purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of Shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriter or Underwriters shall be obligated, severally, in
proportion to the respective numbers of Firm Shares or Option Shares, as the
case may be, which they are obligated to purchase hereunder, to purchase the
Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase or (b) if the aggregate number of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Company or you as the Representatives of the
Underwriters will have the right, by written notice given within the next 36-
hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriter or Underwriters
or of the Company except to the extent provided in Section 8 hereof. In the
event of a default by any Underwriter or Underwriters, as set forth in this
Section 9, the Closing Date or Option Closing Date, as the case may be, may be
postponed for such period, not exceeding seven days, as you, as Representatives,
may determine in order that the required changes in the Registration Statement
or in the Prospectus or in any other documents or arrangements may be effected.
The term "Underwriter" includes any person substituted for a defaulting
Underwriter. Any action taken under this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx Incorporated, 0
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxx, Managing
Director with a copy to BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: General Counsel; if to the Company, to Nationwide
Electric, Inc., 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Xxxxxxxxx X. Xxxxx, XX, Chief Executive Officer, with copies to
Xxxxxxx, Mag & Fizzell, P.C., 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Xxxx X. Xxxxxx, Esquire.
11. Termination.
-----------
This Agreement may be terminated by you by notice to the Company as
follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters or (ii) 11:30 a.m. on
the date of this Agreement;
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(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any change or development that would
have a Material Adverse Effect, whether or not arising in the ordinary course of
business; (ii) any outbreak or escalation of hostilities or declaration of war
or national emergency or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares; (iii) trading generally shall have been suspended or materially limited
on or by, as the case may be, any of the New York Stock Exchange, American Stock
Exchange or the Nasdaq Stock Market or limitation on prices (other than
limitations on hours or numbers of days of trading); (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company; (v) declaration of a banking moratorium
by United States or New York State authorities, (vi) the suspension of trading
of the Company's Common Stock by the Commission on the New York Stock Exchange
or (vii) the taking of any action by any governmental body or agency in respect
of its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), legends required by Item 502(d)
of Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.
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14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors, officers or controlling persons and (c) delivery of and payment
for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
NATIONWIDE ELECTRIC, INC.
By ______________________________________
Xxxxxxxxx X. Xxxxx, XX, President and
Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
XXXXX XXXXXXX INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By:_______________________________________
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Authorized Officer
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SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
BT Alex. Xxxxx Incorporated
Xxxxx Xxxxxxx Inc.
-----------
Total 5,000,000
===========
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