Exhibit 1
DRAFT: 5/9/02
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
2,000,000 Common Shares*
UNDERWRITING AGREEMENT
May [ ], 2002
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
MCDONALD INVESTMENTS INC.
As Representatives of the Several Underwriters
Identified in Schedule II Annexed Hereto
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., an Ohio corporation
(the "Company"), and the shareholder of the Company identified in Schedule I
annexed hereto (the "Selling Shareholder") propose to sell 2,000,000 common
shares (the "Firm Shares"), without par value (the "Common Shares"), to the
several underwriters identified in Schedule II annexed hereto (the
"Underwriters"), who are acting severally and not jointly. In addition, the
Company has agreed to grant to the Underwriters an option to purchase up to
300,000 additional Common Shares (the "Optional Shares") as provided in section
6 hereof. The Firm Shares and, to the extent such option is exercised, the
Optional Shares are hereinafter collectively referred to as the "Shares."
You, as representatives of the several Underwriters (the
"Representatives"), have advised the Company and the Selling Shareholder that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon hereafter as in your judgment is advisable and that the
public offering price of the Shares initially will be [$_____] per share.
The Company and the Selling Shareholder hereby confirm their respective
agreements with the Underwriters and each other as follows:
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company represents and warrants to, and agrees with, the several
Underwriters, and shall be deemed to represent and warrant to, and agree with,
the several Underwriters on each Closing Date (as hereinafter defined), that:
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* Plus an option to acquire up to 300,000 additional Common Shares from
the Company to cover over-allotments.
(a) Each of the Company and the subsidiaries of the Company (i) that
are listed on Exhibit 21.1 of the Company's most recent Annual Report on Form
10-K incorporated by reference into the Registration Statement (as hereinafter
defined); and (ii) that would be required to be listed on an exhibit to the
Company's Annual Report on Form 10-K if the period covered thereby ended on the
date hereof (each individually, a "Subsidiary" and collectively, the
"Subsidiaries") has been duly incorporated or organized and is validly existing
as a corporation, limited liability company or limited partnership and in active
status or good standing under the laws of its jurisdiction of incorporation or
organization, with full corporate or other power and authority to own, lease and
operate its properties and to conduct its business as presently conducted and
described in the Prospectus (as hereinafter defined) and the Registration
Statement; each of the Company and the Subsidiaries is duly registered and
qualified to do business as a foreign corporation, limited liability company or
limited partnership under the laws of, and is in good standing as such in, each
jurisdiction in which such registration or qualification is required, except
where the failure to so register or qualify would not have a material adverse
effect on the condition (financial or other), business, property, net worth,
results of operations or prospects of the Company and the Subsidiaries, taken as
a whole ("Material Adverse Effect"); and no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification. Complete and
correct copies of the articles of incorporation, by-laws and other similar
governing documents, as amended or restated ("Governing Documents"
respectively), of the Company and each of the Subsidiaries as in effect on the
date hereof have been delivered to the Representatives, and no changes thereto
will be made on or subsequent to the date hereof and prior to each Closing Date.
(b) The Common Shares issued and outstanding immediately prior to the
issuance and sale of the Shares to be sold by the Company hereunder as set forth
in the Prospectus have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description thereof contained in the
Prospectus and the Registration Statement. There are no preemptive, preferential
or, except as described in the Prospectus, other rights to subscribe for or
purchase any Common Shares (including the Shares), and no Common Shares have
been issued in violation of such rights. The Shares to be issued and sold by the
Company to the Underwriters have been duly authorized and, when issued,
delivered and paid for pursuant to this Agreement, will be validly issued, fully
paid and nonassessable and will conform to the description thereof contained in
the Prospectus and the Registration Statement. The delivery of certificates for
the Shares to be issued and sold by the Company hereunder and payment therefor
pursuant to the terms of this Agreement will pass valid title to such Shares to
the Underwriters, free and clear of any lien, claim, encumbrance or defect in
title. Except as described in the Prospectus, there are no outstanding options,
warrants or other rights of any description, contractual or otherwise, entitling
any person to be issued any class of security by the Company or any Subsidiary,
and there are no holders of Common Shares or other securities of the Company or
any Subsidiary, or of securities that are convertible or exchangeable into
Common Shares or other securities of the Company or any Subsidiary, that have
rights to the registration of such Common Shares or securities under the
Securities Act of 1933, as
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amended, and the regulations thereunder (together, the "Act") or the securities
laws or regulations of any of the states of the United States (the "Blue Sky
Laws").
(c) Except for the Subsidiaries, and as otherwise set forth in the
Prospectus or on Schedule III annexed hereto, the Company has no subsidiaries
and does not own any equity interest in or control, directly or indirectly, any
other corporation, limited liability company, partnership, joint venture,
association, trust or other business organization. Except as otherwise set forth
in the Prospectus or on Schedule III, the Company owns directly or indirectly
all of the issued and outstanding capital stock of each Subsidiary, free and
clear of any and all liens, claims, encumbrances or security interests, and all
such capital stock has been duly authorized and validly issued and is fully paid
and nonassessable. Except as otherwise set forth in the Prospectus or on
Schedule III, there are no outstanding options, warrants or other rights of any
description, contractual or otherwise, entitling any person to subscribe for or
purchase any shares of capital stock of any Subsidiary.
(d) The Company has full corporate power and authority to enter into
and perform this Agreement, and the execution and delivery by the Company of
this Agreement and the performance by the Company of its obligations hereunder
and the consummation of the transactions described herein, have been duly
authorized with respect to the Company by all necessary corporate action and
will not: (i) violate any provisions of the Governing Documents of the Company
or any Subsidiary; (ii) violate any provisions of, or result in the breach,
modification or termination of, or constitute a default under, any provision of
any agreement, lease, franchise, license, indenture, permit, mortgage, deed of
trust, evidence of indebtedness or other instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary, or any property
owned or leased by the Company or any Subsidiary, may be bound or affected;
(iii) violate any statute, ordinance, rule or regulation applicable to the
Company or any Subsidiary, or order or decree of any court, regulatory or
governmental body, arbitrator, administrative agency or instrumentality of the
United States or other country or jurisdiction having jurisdiction over the
Company or any Subsidiary; or (iv) result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary. No consent, approval, authorization or other order of any court,
regulatory or governmental body, arbitrator, administrative agency or
instrumentality of the United States or other country or jurisdiction is
required for the execution and delivery of this Agreement by the Company, the
performance of its obligations hereunder or the consummation of the transactions
contemplated hereby, except for compliance with the Act, the Securities Exchange
Act of 1934, as amended, and the regulations thereunder (together, the "Exchange
Act"), the Blue Sky Laws applicable to the public offering of the Shares by the
several Underwriters and the clearance of such offering and the underwriting
arrangements evidenced hereby with the National Association of Securities
Dealers, Inc. (the "NASD"). This Agreement has been duly executed and delivered
by and on behalf of the Company and is a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
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(e) A registration statement on Form S-3 (Reg. No. 333-87546) with
respect to the Shares, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the Act and has
been filed with the Securities and Exchange Commission (the "Commission"). The
conditions for use of Form S-3, set forth in the General Instructions thereto,
have been satisfied. Such registration statement, as finally amended and revised
at the time such registration statement was or is declared effective by the
Commission (including the information contained in the form of final prospectus,
if any, filed with the Commission pursuant to Rule 424(b) and Rule 430A under
the Act and deemed to be part of the registration statement if the registration
statement has been declared effective pursuant to Rule 430A(b)) and as
thereafter amended by post-effective amendment, if any, together with any
registration statement and amendment filed pursuant to Rule 462 under the Act,
is herein referred to as the "Registration Statement." The related final
prospectus in the form first filed with the Commission pursuant to Rule 424(b)
or, if no such filing is required, as included in the Registration Statement, or
any supplement thereto, is herein referred to as the "Prospectus." The
prospectus subject to completion in the form included in the Registration
Statement at the time of the initial filing of the Registration Statement with
the Commission, and each such prospectus as amended from time to time until the
date of the Prospectus, is referred to herein as the "Preliminary Prospectus."
Reference made herein to each Preliminary Prospectus or the Prospectus, as
amended or supplemented, shall include all documents and information
incorporated by reference therein and shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or Prospectus,
as the case may be, and so incorporated by reference, under the Exchange Act.
The Company has prepared and filed such amendments to the Registration Statement
since its initial filing with the Commission, if any, as may have been required
to the date hereof, and will file such additional amendments thereto as may
hereafter be required. There have been delivered to the Representatives two
signed copies of the Registration Statement and each amendment thereto, if any,
including any document filed under the Exchange Act and deemed to be
incorporated by reference into the Registration Statement, together with two
copies of each exhibit filed therewith or incorporated by reference therein, and
such number of conformed copies for each of the Underwriters of the Registration
Statement and each amendment thereto, if any (but without exhibits), and of each
Preliminary Prospectus and of the Prospectus as the Representatives have
requested.
(f) Neither the Commission nor any state securities commission has
issued any order preventing or suspending the use of any Preliminary Prospectus,
nor, to the knowledge of the Company, have any proceedings for that purpose been
initiated or threatened, and each Preliminary Prospectus filed with the
Commission as part of the Registration Statement as originally filed or as part
of any amendment or supplement thereto complied in all material respects when so
filed with the requirements of the Act and, as of its date, did not include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. As
of the effective date of the Registration Statement, and at all times subsequent
thereto up to each Closing Date, the Registration Statement and the
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Prospectus contained or will contain all statements that are required to be
stated therein in accordance with the Act and conformed or will conform in all
material respects to the requirements of the Act, and neither the Registration
Statement nor the Prospectus included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Notwithstanding any of the foregoing, the Company makes no representation or
warranty with respect to statements made in, or omissions from, the Registration
Statement, any Preliminary Prospectus or the Prospectus in reliance upon
information furnished by the Representatives pursuant to section 5 of this
Agreement. Neither the Company, nor any person that controls, is controlled by
(including the Subsidiaries) or is under common control with the Company, has
distributed or will distribute prior to each Closing Date any offering material
in connection with the offering and sale of the Shares other than a Preliminary
Prospectus, the Prospectus, the Registration Statement or other materials
permitted by the Act and provided to the Representatives.
(g) The documents that are incorporated by reference in the Prospectus
or the Registration Statement or from which information is so incorporated by
reference, when they became effective or were filed with the Commission, as the
case may be, complied in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and any document so filed and incorporated
by reference subsequent to the effective date of the Registration Statement
shall, when it is filed with the Commission, comply in all material respects
with the requirements of the Act and the Exchange Act, as applicable, and when
read together with the other information included in the Prospectus or the
Registration Statement, as the case may be, do 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.
(h) Ernst & Young LLP, which has expressed its opinion with respect to
the consolidated financial statements and schedules of the Company filed with
the Commission or incorporated by reference and included as a part of each
Preliminary Prospectus, the Prospectus or the Registration Statement are
independent accountants with respect to the Company as required by the Act.
(i) The consolidated financial statements of the Company and the
related notes thereto included or incorporated by reference in each Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly the
financial position, results of operations and cash flows of the Company as of
their respective dates or for the respective periods covered thereby, all in
conformity with accounting principles generally accepted in the United States of
America consistently applied throughout the periods involved except as otherwise
stated therein. The financial statement schedules, if any, included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein on a basis consistent with the
consolidated financial statements of the Company contained therein. The Company
had an outstanding capitalization as set forth in the column headed "Actual"
under "Capitalization" in the
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Prospectus as of the date indicated therein, and there has been no material
change thereto since such date except as disclosed in the Prospectus and other
than: (i) the issuance of _____ Common Shares upon the exercise of stock options
under the Company's stock option plans (the "Option Plans") and (ii) the
issuance of _____ Common Shares upon conversion of the Company's 6-1/2%
Convertible Subordinated Notes, Due 2003 (the "Convertible Notes"). The
financial and statistical information and data relating to the Company in each
Preliminary Prospectus, the Prospectus and the Registration Statement are
accurately presented in all material respects and prepared on a basis consistent
with the audited consolidated financial statements and books and records of the
Company. The consolidated financial statements and schedules of the Company and
the related notes thereto included or incorporated by reference in each
Preliminary Prospectus, the Prospectus or the Registration Statement are the
only such financial statements and schedules required under the Act to be set
forth therein.
(j) Neither the Company nor any Subsidiary is, nor with the giving of
notice or passage of time or both, would be, in violation or in breach of: (i)
its respective Governing Documents; (ii) any statute, ordinance, order, rule or
regulation applicable to the Company or such Subsidiary; (iii) any order or
decree of any court, regulatory body, arbitrator, administrative agency or other
instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company or such Subsidiary; or (iv) any provision of any
agreement, lease, franchise, license, indenture, permit, mortgage, deed of
trust, evidence of indebtedness or other instrument to which the Company or such
Subsidiary is a party or by which any property owned or leased by the Company or
such Subsidiary is bound or affected except where such violation or breach does
not and would not have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received notice of any violation of any applicable statute,
ordinance, order, rule or regulation applicable to the Company or any Subsidiary
that has had or would have a Material Adverse Effect. Except as does not or
would not have a Material Adverse Effect: (i) the Company and each Subsidiary
have obtained and hold, and are in compliance with, all permits, certificates,
licenses, approvals, registrations, franchises, consents and authorizations of
governmental or regulatory authorities required under all laws, rules and
regulations in connection with their businesses (hereinafter "permit" or
"permits"); (ii) all of such permits are in full force and effect; and the
Company and each Subsidiary have fulfilled and performed all of their respective
obligations with respect to each such permit; and (iii) no event has occurred
which would result in, or after notice or lapse of time would result in,
revocation or termination of any such permit or result in any other impairment
of the rights of the holder of any such permit. Except as does not or would not
have a Material Adverse Effect, neither the Company nor any Subsidiary is or has
been (by virtue of any action, omission to act, contract to which it is a party
or other occurrence) in violation of any applicable foreign, federal, state,
municipal or local statutes, laws, ordinances, rules, regulations or orders
(including those relating to environmental protection, occupational safety and
health and equal employment practices) heretofore or currently in effect.
(k) There are no legal or governmental proceedings or investigations
pending or, to the knowledge of the Company, threatened to which the Company or
any
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Subsidiary is or may be a party to, or to which any property owned or leased
by the Company or any Subsidiary is or may be subject, that are required to be
described in the Registration Statement or the Prospectus and which are not so
described, or which question the validity of this Agreement or any action taken
or to be taken pursuant hereto. Except as described in the Registration
Statement or the Prospectus, neither the Company nor any Subsidiary: (i) is in
violation of any statute, ordinance, rule or regulation, or any decision, order
or decree of any court, regulatory body, arbitrator, administrative agency or
other instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company or such Subsidiary relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environmental or human exposure to hazardous or
toxic substances (collectively, "environmental laws"); (ii) owns or operates any
real property contaminated with any substance that is subject to any
environmental laws; (iii) is liable for any off-site disposal or contamination
pursuant to any environmental laws; or (iv) is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim has
had or would have a Material Adverse Effect.
(l) There is no transaction, relationship, obligation, agreement or
other document required to be described in the Registration Statement or the
Prospectus or to be filed or deemed to be filed as an exhibit to the
Registration Statement by the Act, that has not been described or filed as
required. All such contracts or agreements to which the Company or any
Subsidiary is a party have been duly authorized, executed and delivered by the
Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary, and are enforceable by and against the Company or
such Subsidiary, in accordance with the respective terms thereof.
(m) The Company or a Subsidiary has marketable title to all real
property, and good and valid title to all other property and assets, reflected
as owned by the Company or such Subsidiary in the Company's consolidated
financial statements included or incorporated by reference in the Registration
Statement (or elsewhere in the Registration Statement or the Prospectus), free
and clear of all liens, claims, mortgages, security interests or other
encumbrance of any kind or nature whatsoever except those, if any, reflected in
such financial statements (or elsewhere in the Registration Statement or the
Prospectus) or which do not materially affect the value and do not materially
interfere with the use made by the Company or such Subsidiary of such real
property or other property or assets. All material property (real and personal)
held or used by the Company or a Subsidiary under leases, licenses, franchises
or other agreements is held by the Company or such Subsidiary under valid,
subsisting, binding and enforceable leases, franchises, licenses or other
agreements, with such exceptions as are not material and do not materially
interfere with the use made by the Company or such Subsidiary of such property.
(n) Neither the Company nor any person that controls, is controlled by
(including the Subsidiaries) or is under common control with the Company has
taken or will take, directly or indirectly, any action designed to cause or
result in, or which constituted, or which could cause or result in,
stabilization or manipulation, under the
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Exchange Act or otherwise, of the price of any security of the Company to
facilitate the sale or resale of the Common Shares in connection with the
transactions contemplated by this Agreement.
(o) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in the
Registration Statement or the Prospectus and prior to each Closing Date: (i)
neither the Company nor any Subsidiary has or will have incurred any liability
or obligation, direct or contingent, or entered into any transaction, that is
material to the Company, except as in the ordinary course of business; (ii) the
Company has not and will not have paid or declared any dividend or other
distribution with respect to its capital shares (other than its regular
quarterly dividend), and neither the Company nor any Subsidiary is or will be
delinquent in the payment of any material amount (or immaterial amount, the
failure of which to timely pay has resulted or would result in a Material
Adverse Effect) of principal or interest on any outstanding debt obligation; and
(iii) there has not been any material change in the capital shares, any material
change in the indebtedness of the Company or any Subsidiary, or any change or
development involving or which has involved or would involve, a Material Adverse
Effect, whether or not arising from transactions in the ordinary course of
business.
(p) The Company or a Subsidiary owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights and
licenses presently used in or necessary for the conduct of its business or
ownership of its properties, and neither the Company nor any Subsidiary has
violated or infringed upon the rights of others, or received any notice of
conflict with the asserted rights of others, in respect thereof in any manner
which has had or would have a Material Adverse Effect.
(q) The Company or a Subsidiary has in place and effective such
policies of insurance, with limits of liability in such amounts, as are normal
and prudent in the ordinary course of the business of the Company and the
Subsidiaries.
(r) Except as does nor or would not have a Material Adverse Effect, no
labor dispute with, or grievances by, the employees of the Company or any
Subsidiary is pending or, to the knowledge of the Company, is imminent. Since
August 31, 2001, except as reflected in the financial statements included in the
Prospectus, there has been no change in the relationship of the Company or any
Subsidiary with any of its principal suppliers, manufacturers, contractors or
customers resulting in or that would result in a Material Adverse Effect.
(s) Neither the Company nor any Subsidiary is an "investment company",
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended.
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(t) All federal, state and local tax returns required to be filed by or
on behalf of the Company or any Subsidiary have been filed (or are the subject
of valid extension) with the appropriate federal, state and local authorities,
and all such tax returns, as filed, are accurate in all material respects; and
all federal, state and local taxes (including estimated tax payments) required
to be shown on all such tax returns or claimed to be due from or with respect to
the business of the Company or such Subsidiary have been paid or reflected as a
liability on the financial statements of the Company or such Subsidiary for
appropriate periods.
(u) With respect to each United States employee pension benefit plan as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or United States employee welfare benefit plan as defined
in Section 3(1) of ERISA, including, without limitation, any multiemployer
welfare or pension plan, with respect to which the Company or any Subsidiary is
a participating employer or plan sponsor (collectively, the "Plans"), the
Company is in substantial compliance with all applicable regulations, including
ERISA and the Code. With respect to each defined benefit retirement Plan, such
Plan does not have benefit liabilities (as defined in Section 4001(a)(16) of
ERISA) exceeding the assets of the Plan. The Company or the administrator of
each of the Plans, as the case may be, has timely filed the reports required to
be filed by ERISA and the Code in connection with the maintenance of the Plans,
and no facts, including, without limitation, any "reportable event" as defined
by ERISA and the regulations thereunder, exist in connection with the Plans
which, under applicable law, would constitute grounds for the termination of any
of the Plans by the Pension Benefit Guaranty Corporation or for the appointment
by the appropriate United States District Court of a trustee to administer any
of the Plans.
(v) The Company and each Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of consolidated financial statements in conformity with generally
accepted accounting principles 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 existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(w) Other than as set forth in the Prospectus, none of the Company, any
Subsidiary, or, to the knowledge of the Company, any officer or director of the
Company or any Subsidiary is: (i) an officer, director or partner of any
brokerage firm, broker or dealer that is a member of the NASD ("NASD Member");
or (ii) directly or indirectly, a "person associated with" an NASD member or an
"affiliate" of an NASD member, as such terms are used in the NASD Rules or
By-Laws. In addition, neither the Company nor any Subsidiary has issued or
transferred any Common Shares, warrants, options or other securities, or any
other items of value, to any of the Underwriters or any "related person" of any
Underwriter, as such term is used in the NASD Rules, except as provided
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in this Agreement at any time within the one-year period ending on the date of
this Agreement.
(x) The Common Shares have been registered pursuant to Section 12(b) of
the Exchange Act. The Shares have been approved for listing upon notice of
issuance on the New York Stock Exchange (the "NYSE") concurrently with the
effectiveness of the Registration Statement.
(y) Neither the Company, any Subsidiary nor any affiliate of the
Company or such Subsidiary does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section 517.075 of the
Florida Statutes, and the Company agrees to comply with such Section if, prior
to the completion of the distribution of the Shares, the Company, any Subsidiary
or any affiliate of the Company or such Subsidiary commences doing such
business.
(z) During the three years prior to the date hereof, all offers and
sales of securities by the Company and each Subsidiary were made in compliance
with the Act and all other applicable state and federal laws or regulations.
(aa) The Company has obtained for the benefit of the Underwriters an
agreement in the form attached to this Agreement as EXHIBIT A, enforceable by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated ("Baird"), executed by each of the executive
officers and directors of the Company, and M.H.M. & Co. Ltd. (collectively, the
"Lock-Up Agreements") and providing that for a period of 90 days after the date
of the Prospectus, such persons will not, without the prior written consent of
Baird, directly or indirectly, offer, sell, transfer, or pledge, contract to
sell, transfer or pledge, or cause or in any way permit to be sold, transferred,
pledged, or otherwise disposed of, any: (i) Common Shares; (ii) rights to
purchase Common Shares (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by any such shareholder in
accordance with the applicable regulations of the Commission and Common Shares
that may be issued upon the exercise of a stock option, warrant or other
convertible security); or (iii) securities that are convertible or exchangeable
into Common Shares; and that for a period of 90 days after the date of the
Prospectus, such persons will not, without the prior written consent of Baird,
exercise or cause to be exercised, directly or indirectly, any rights to
initiate the registration of Common Shares under the Act or any Blue Sky Laws.
The Company hereby represents and warrants that it will not release or purport
to release any person from any Lock-Up Agreement without the prior written
consent of Baird.
(bb) Copies of the Durable Power of Attorney and the Custody Agreement
executed by the Selling Shareholder and a copy of the Selling Shareholder's
Selling Shareholder's Questionnaire have been furnished to counsel for the
Underwriters prior to the date hereof, along with such other information as such
counsel reasonably has requested in connection with their review thereof.
A certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty
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by the Company to the Underwriters as to the matters covered thereby. A
certificate delivered by the Company to its counsel for purposes of enabling
such counsel to render the opinion referred to in section 10(d) will also be
furnished to the Representatives and counsel for the Underwriters and shall be
deemed to be additional representations and warranties to the Underwriters by
the Company as to the matters covered thereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder represents and warrants to and agrees with the several
Underwriters and the Company, and shall be deemed to represent and warrant to
the several Underwriters and the Company on the First Closing Date, that:
(a) The Selling Shareholder has duly executed a durable power
of attorney and custody agreement ("Durable Power of Attorney" and
Custody Agreement", respectively) naming ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇. ▇▇▇▇▇, or either of them, as the Selling Shareholder's
attorney(s)-in-fact ("Attorneys-in-Fact") for the purpose of entering
into and carrying out this Agreement and naming the Company as
custodian ("Custodian") of the Shares of the Selling Shareholder for
the purpose of selling such Shares to the Underwriters on the First
Closing Date and receiving payment therefor.
(b) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Shareholder of
this Agreement, the Durable Power of Attorney and the Custody
Agreement, and for the sale and delivery of the Shares to be sold by
the Selling Shareholder hereunder, as set forth on Schedule I annexed
hereto, have been obtained. The Selling Shareholder has, and at the
time of delivery thereof hereunder the Selling Shareholder will have,
good and valid title to the Shares proposed to be sold by the Selling
Shareholder hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, security interests, equities, claims and community
or marital property rights, other than any created by the Durable Power
of Attorney, the Custody Agreement or this Agreement for the benefit of
the Underwriters. The Selling Shareholder has full right, power and
authority to enter into this Agreement, the Durable Power of Attorney
and the Custody Agreement and to sell, assign, transfer and deliver
such Shares hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, security interests, equities, claims and community
or marital property rights, other than any created by the Durable Power
of Attorney, the Custody Agreement or this Agreement for the benefit of
the Underwriters. Upon delivery of and payment for such Shares
hereunder, the Underwriters will acquire good and valid title thereto,
free and clear of all voting trust arrangements, liens, encumbrances,
security interests, equities, claims and community or marital property
rights.
(c) The Selling Shareholder has not distributed and will not
distribute any Preliminary Prospectus, the Prospectus or any other
material in connection with the offering and sale of the Shares. The
Selling Shareholder has not taken and will not take, directly or
indirectly, any action designed to or which could cause or result in,
under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Common Shares.
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(d) The execution, delivery and performance by the Selling
Shareholder of this Agreement, the Durable Power of Attorney and the
Custody Agreement will not, if applicable, result in the violation of
any provisions of the Articles of Incorporation, By-laws or other
governing documents of the Selling Shareholder, or constitute a breach,
or be in contravention, of any provision of any agreement, franchise,
license, indenture, mortgage, deed of trust or other instrument to
which the Selling Shareholder is a party or by which the Selling
Shareholder or the Selling Shareholder's property may be bound or
affected, or any statute, rule or regulation applicable to the Selling
Shareholder, or violate any order or decree of any court, regulatory
body, administrative agency or other governmental body having
jurisdiction over the Selling Shareholder or any of the Selling
Shareholder's property. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of, and
performance under, this Agreement by the Selling Shareholder or the
consummation by the Selling Shareholder of the transactions
contemplated by this Agreement, except for compliance with the Act, the
Exchange Act, the Blue Sky Laws applicable to the public offering of
the Shares by the Underwriters and the clearance of such offering with
the NASD. The Selling Shareholder hereby represents and warrants that
each Attorney-in-Fact has been duly appointed as attorney-in-fact by
the Selling Shareholder for the purpose of entering into and carrying
out this Agreement, and the Durable Power of Attorney and the Custody
Agreement have been duly executed and delivered by or on behalf of the
Selling Shareholder to the Representatives.
(e) This Agreement, the Durable Power of Attorney and the
Custody Agreement are each valid and binding agreements of the Selling
Shareholder enforceable in accordance with their respective terms.
(f) The Selling Shareholder has deposited in custody, under
the Durable Power of Attorney and the Custody Agreement, certificates
in negotiable form for the 450,000 Shares to be sold hereunder by the
Selling Shareholder for the purpose of further delivery pursuant to
this Agreement. The Selling Shareholder agrees that the Shares of the
Selling Shareholder on deposit with the Custodian are subject to the
interests of the Company and the Underwriters, that the arrangements
made for such custody, and the appointment of the Attorneys-in-Fact
pursuant to the Durable Power of Attorney and the Custody Agreement,
are to that extent irrevocable, and that the obligations of the Selling
Shareholder hereunder and under the Durable Power of Attorney and the
Custody Agreement shall not be terminated, except as provided in this
Agreement, the Durable Power of Attorney and the Custody Agreement, by
any act of the Selling Shareholder, by operation of law, whether by the
dissolution, winding up or other event affecting the legal life of the
Selling Shareholder, or by the occurrence of any other event. If the
Selling Shareholder should be wound up or dissolved, or if any other
event should occur before the delivery of the Shares hereunder, the
certificates for Shares then on deposit with the Custodian shall, to
the extent the Shares are purchased by the Underwriters, be delivered
by the Custodian in accordance with the terms and conditions of this
Agreement, the Durable Power of Attorney and the Custody Agreement as
if such winding up, dissolution or other event had not occurred,
regardless of whether or not the Custodian shall have received notice
thereof. The Selling Shareholder represents that each Attorney-in-Fact
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has been authorized by the Selling Shareholder to execute and deliver
this Agreement and the Custodian has been authorized to receive and
acknowledge receipt of the proceeds of sale of the Shares sold by the
Selling Shareholder against delivery thereof and otherwise to act on
behalf of the Selling Shareholder.
(g) Insofar as it relates to the Selling Shareholder, each
Preliminary Prospectus, as of its date, has conformed in all material
respects with the requirements of the Act and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not misleading;
and on the effective date of the Registration Statement and at all
times subsequent thereto up to the First Closing Date, (i) the
Registration Statement and the Prospectus, as they relate to the
Selling Shareholder, did or will conform to the requirements of the
Act, and (ii) neither the Registration Statement nor the Prospectus as
it relates to the Selling Shareholder did or will include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(h) The information contained in the Selling Shareholder's
Selling Shareholder's Questionnaire completed in connection with the
Company's public offering of Shares and delivered to the
Representatives was, as of the date of such questionnaire, and is, as
of the date of this Agreement, true and correct.
A certificate signed by or on behalf of the Selling Shareholder
as such and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Selling Shareholder to the
Underwriters as to the matters covered thereby. A certificate delivered by or on
behalf of the Selling Shareholder to counsel for the Selling Shareholder for
purposes of enabling such counsel to render the opinion referred in Section
10(e) will also be furnished to the Representatives and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by the Selling Shareholder as to the matters covered
thereby.
SECTION 4. REPRESENTATION OF UNDERWRITERS. The Representatives
will act as the representatives for the several Underwriters in connection with
the public offering of the Shares, and any action under or in respect of this
Agreement taken by the Representatives will be binding upon all of the
Underwriters.
SECTION 5. INFORMATION FURNISHED BY THE UNDERWRITERS. The
information set forth (i) in the table of participating Underwriters and the
third paragraph appearing under the caption "Underwriting" in the Prospectus,
and (ii) in the last two paragraphs appearing under the caption "Underwriting"
in the Prospectus constitutes all of the information furnished to the Company by
and on behalf of the Underwriters for use in connection with the preparation of
the Registration Statement and the Prospectus, as such information is referred
to in this Agreement.
SECTION 6. PURCHASE, SALE AND DELIVERY OF SHARES.
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(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions
herein set forth, the Company agrees to sell to the Underwriters
identified in Schedule II annexed hereto 1,550,000 Firm Shares, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company the number of Firm Shares as hereinafter set forth at
the price per share of [$__________]. The obligation of each
Underwriter to the Company shall be to purchase from the Company that
number of full Firm Shares which (as nearly as practicable in full
shares as determined by the Representatives) bears the same proportion
to the number of Firm Shares to be sold by the Company as the number of
shares set forth opposite the name of such Underwriter in Schedule II
annexed hereto bears to the total number of Firm Shares to be purchased
by all of the Underwriters under this Agreement.
(b) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions
herein set forth, the Selling Shareholder agrees to sell to the
Underwriters 450,000 Firm Shares, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Selling Shareholder the
number of Firm Shares as hereinafter set forth at the same purchase
price per share as stated in the preceding paragraph. The obligation of
each Underwriter to the Selling Shareholder shall be to purchase from
the Selling Shareholder that number of full Firm Shares which (as
nearly as practicable in full shares as determined by the
Representatives) bears the same proportion to the number of Firm Shares
to be sold by the Selling Shareholder as the number of shares set forth
opposite the name of such Underwriter in Schedule II annexed hereto
bears to the total number of Firm Shares to be purchased by all of the
Underwriters under this Agreement.
(c) On the First Closing Date (as hereinafter defined), the
Company and the Custodian on behalf of the Selling Shareholder will
deliver to the Representatives, at the offices of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
through the facilities of The Depository Trust Company, for the
accounts of the several Underwriters, certificates representing the
Firm Shares to be sold by them against payment in Milwaukee, Wisconsin
of the purchase price therefor by wire transfer of immediately
available funds payable to the account designated in writing by the
Company with respect to the Firm Shares being sold by the Company and
to the account designated in writing by the Custodian with respect to
the Firm Shares being sold by the Selling Shareholder. As referred to
in this Agreement, the "First Closing Date" shall be on the fourth (or
third, if the price set forth in Section 6(a) above is determined
before 3:30 p.m., Milwaukee, Wisconsin time on the date of this
Agreement) full business day after the date of the Prospectus, at 9:00
a.m., Milwaukee, Wisconsin time, or at such other date or time not
later than ten full business days after the date of the Prospectus as
the Representatives, the Company and the Attorneys-in-Fact (or either
of them) may agree. The certificates for the Firm Shares to be so
delivered will be in denominations and registered in such names as the
Representatives request by notice to the Company and the
Attorneys-in-Fact, or either of them, prior to the first full business
day preceding the First Closing Date, and such certificates will be
made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full
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business day preceding the First Closing Date at a location to be
designated by the Representatives.
(d) In addition, on the basis of the representations,
warranties and agreements herein contained, and subject to the terms
and conditions herein set forth, the Company hereby agrees to sell to
the Underwriters, and the Underwriters, severally and not jointly,
shall have the right at any time within thirty days after the date of
the Prospectus to purchase up to 300,000 Optional Shares from the
Company at the purchase price per share to be paid for the Firm Shares,
for use solely in covering any over-allotments made by the Underwriters
in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised in whole or in part at any time (but not
more than once) upon written notice by the Representatives to the
Company within thirty days after the date of the Prospectus setting
forth the aggregate number of Optional Shares to be purchased by the
Underwriters and sold by the Company, the names and denominations in
which the certificates for such shares are to be registered and the
date and place at which such certificates will be delivered. Such date
of delivery (the "Second Closing Date") shall be determined by the
Representatives, provided that the Second Closing Date, which may be
the same as the First Closing Date, shall not be earlier than the First
Closing Date and, if after the First Closing Date, shall not be earlier
than three nor later than ten full business days after delivery of such
notice to exercise. The number of Optional Shares to be purchased by
each of the Underwriters pursuant to such notice shall equal that
number of full Optional Shares which (as nearly as practicable in full
shares as determined by the Representatives) bears the same proportion
to the number of Optional Shares to be purchased by all Underwriters
hereunder as the number of Firm Shares to be purchased by such
Underwriter under this Agreement bears to the total number of Firm
Shares to be sold hereunder. Certificates for the Optional Shares will
be made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time, on the first full business day preceding the Second
Closing Date at a location to be designated by the Representatives. The
manner of payment for and delivery of (including the denominations of
and the names in which certificates are to be registered) the Optional
Shares shall be the same as for the Firm Shares.
(e) The Representatives have advised the Company and the
Attorneys-in-Fact that each Underwriter has authorized the
Representatives to accept delivery of the Shares and to make payment
therefor. It is understood that the Representatives, individually and
not as representatives of the Underwriters, may (but shall not be
obligated to) make payment for any Shares to be purchased by any
Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any obligation under
this Agreement. As referred to in this Agreement, "Closing Date" shall
mean either the First Closing Date or the Second Closing Date.
SECTION 7. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the several Underwriters that:
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(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, the Company will
use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, upon notification from the
Commission that the Registration Statement has become effective, will
so advise the Representatives and counsel to the Underwriters promptly.
If the effective time of the Registration Statement is prior to the
execution and delivery of this Agreement and any information shall have
been omitted therefrom in reliance upon Rule 430A, the Company, at the
earliest possible time, will furnish the Representatives with a copy of
the Prospectus to be filed by the Company with the Commission to comply
with Rule 424(b) and Rule 430A under the Act and, if the
Representatives do not object to the contents thereof, will comply with
such Rules. Upon compliance with such Rules, the Company will so advise
the Representatives promptly. The Company will advise the
Representatives and counsel to the Underwriters and the
Attorneys-in-Fact promptly of the issuance by the Commission or any
state securities commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, or of any notification of the
suspension of qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceedings for that purpose,
and will also advise the Representatives and counsel to the
Underwriters and the Attorneys-in-Fact promptly of any request of the
Commission for amendment or supplement of the Registration Statement,
of any Preliminary Prospectus or of the Prospectus, or for additional
information, and the Company will not file any amendment or supplement
to the Registration Statement (either before or after it becomes
effective), to any Preliminary Prospectus or to the Prospectus
(including a prospectus filed pursuant to Rule 424(b)), or file any
document under the Exchange Act before the termination or completion of
the public offering of the Shares by the Underwriters if such document
would be deemed to be incorporated by reference in the Registration
Statement, if the Representatives have not been furnished with a copy
prior to such filing (with a reasonable opportunity to review such
amendment or supplement) or if the Representatives reasonably object to
such filing.
(b) If, at any time when a prospectus relating to the Shares
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event occurs as a result of which the
Prospectus would include an untrue statement of a material fact, or
would 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, or if it is
necessary at any time to supplement the Prospectus to comply with the
Act or to file under the Exchange Act any document which would be
deemed to be incorporated by reference in the Registration Statement to
comply with the Act or the Exchange Act, the Company promptly will
advise the Representatives and counsel to the Underwriters and the
Attorneys-in-Fact thereof and will promptly prepare and file with the
Commission, at its expense, an amendment to the Registration Statement
or a Current Report on Form 8-K with such documents that will correct
such statement or omission or will effect such compliance; and, if any
Underwriter is required to deliver a prospectus after the effective
date of the Registration Statement, the Company, upon request of the
Representatives, will prepare promptly such prospectus or prospectuses
as may be
-16-
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act. The Company consents to the use, in accordance
with the provisions of the Act and with the Blue Sky Laws of the
jurisdictions in which the Shares are offered by the several
Underwriters and by dealers, of each Preliminary Prospectus.
(c) Neither the Company nor any Subsidiary will, prior to the
Second Closing Date, if any, acquire any of the Common Shares nor will
the Company declare or pay any dividend or make any other distribution
upon its Common Shares payable to shareholders of record on a date
prior to the Second Closing Date, except for a regular quarterly cash
dividend that is declared and paid in the same amount as in the same
quarter of the preceding year.
(d) The Company will make generally available to its security
holders and the Representatives an earnings statement as soon as
practicable, but in no event later than sixty days after the end of its
fiscal quarter in which the first anniversary of the effective date of
the Registration Statement occurs, covering a period of twelve
consecutive calendar months beginning after the effective date of the
Registration Statement, which will satisfy the provisions of the last
paragraph of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company will furnish to the Representatives, at the expense of the
Company, copies of the Registration Statement, the Prospectus, any
Preliminary Prospectus and all amendments and supplements to any such
documents, including any document filed under the Exchange Act and
deemed to be incorporated by reference in the Registration Statement,
in each case as soon as available and in such quantities as the
Representatives may reasonably request.
(f) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder for the purposes set forth in the
Prospectus.
(g) The Company will cooperate with the Representatives and
counsel to the Underwriters in qualifying or registering the Shares for
sale under the Blue Sky Laws of such jurisdictions as the
Representatives designate, and will continue such qualifications or
registrations in effect so long as reasonably requested by the
Representatives to effect the distribution of the Shares. The Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it
is not presently qualified. In each jurisdiction where any of the
Shares shall have been qualified as provided above, the Company will
file such reports and statements as may be required to continue such
qualification for a period of not less than one year from the date of
the Prospectus. During the period of one year from the date of the
Prospectus, the Company shall promptly prepare and file with the
Commission, from time to time, such reports as may be required to be
filed by the Act and the Exchange Act, and the Company shall comply in
all respects with the undertakings given by the Company in connection
with the qualification or registration of the Shares for offering and
sale under the Blue Sky Laws.
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(h) During the period of three years from the date of the
Prospectus, the Company will furnish to each of the Representatives and
to each of the other Underwriters who may so request, as soon as
available, each report, statement or other document of the Company or
its Board of Directors mailed to its shareholders or filed with the
Commission, and such other information concerning the Company as the
Representatives may reasonably request.
(i) The Company shall deliver the requisite notice of issuance
to the NYSE and shall take all necessary or appropriate action within
its power to maintain the authorization for trading of the Common
Shares as a NYSE security, or take such action to authorize the Common
Shares for listing on the American Stock Exchange or the National
Market System of The Nasdaq Stock Market, for a period of at least
thirty-six months after the date of the Prospectus.
(j) Except for the issuance and sale by the Company of Common
Shares upon exercise of presently existing outstanding stock options,
the sale of the Shares to be sold by the Company pursuant to this
Agreement, the issuance of Common Shares upon the conversion of the
Convertible Notes, and the grant of employee stock options (none of
such options to be exercisable during the 90-day period herein
described) and Common Shares pursuant to the Company's Option Plans and
other Plans, the Company shall not, for a period of 90 days after the
date of the Prospectus, without the prior written consent of Baird,
directly or indirectly, offer, sell or otherwise dispose of, contract
to sell or otherwise dispose of, or cause or in any way permit to be
sold or otherwise disposed of, any: (i) Common Shares; (ii) rights to
purchase Common Shares; or (iii) securities that are convertible or
exchangeable into Common Shares.
(k) The Company will maintain a transfer agent and, if
required by law or the rules of the NYSE or any national securities
exchange on which the Common Shares are listed, a registrar (which, if
permitted by applicable laws and rules, may be the same entity as the
transfer agent) for the Common Shares.
(l) If the sale to the Underwriters of the Firm Shares is not
consummated for any reason other than termination of this Agreement
pursuant to section 13 hereof, without limiting any other rights the
Underwriters may have, the Company agrees to reimburse the Underwriters
upon demand for all reasonable out-of-pocket expenses (including
reasonable fees and expenses of counsel for the Underwriters), that
shall have been incurred by the Underwriters in connection with the
proposed purchase and sale of the Shares, and the provisions of
sections 9 and 12 hereof shall at all times be effective and apply.
(m) The Company will, to the extent within its control, comply
or cause to be complied with the conditions to the obligations of the
Underwriters in section 10 hereof.
(n) The Company will deliver to the Representatives as many
(i) conformed copies of the Registration Statement (as originally
filed) (one of which shall be manually signed), (ii) conformed copies
of each amendment thereto (including exhibits filed
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therewith and documents incorporated therein by reference) (one of
which shall be manually signed), and (iii) copies of each Prospectus
and Preliminary Prospectus, in each case as the Representatives may
reasonably request.
SECTION 8. COVENANTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder covenants and agrees with the several Underwriters and the Company
as follows:
(a) If the effective time of the Registration Statement is not
prior to the execution and delivery of this Agreement, the Selling
Shareholder will cooperate to the extent necessary to cause the
Registration Statement to become effective at the earliest possible
time; and the Selling Shareholder will do and perform all things to be
done and performed by the Selling Shareholder prior to each Closing
Date, pursuant to this Agreement, the Durable Power of Attorney or the
Custody Agreement.
(b) The Selling Shareholder agrees to deliver to the Custodian
on or prior to the First Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable
substitute form or statement specified by Treasury Department
regulations in lieu thereof).
(c) The Selling Shareholder will pay all federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the
Selling Shareholder to the Underwriters.
(d) For a period of 90 days after the date of the Prospectus,
the Selling Shareholder will not, without the prior written consent of
▇▇▇▇▇, directly or indirectly, offer, sell, transfer, or pledge,
contract to sell, transfer or pledge or cause or in any way permit to
be sold, transferred, pledged or otherwise disposed of any: (i) Common
Shares; (ii) rights to purchase Common Shares (including, without
limitation, Common Shares that may be deemed to be beneficially owned
by the Selling Shareholder in accordance with the rules and regulations
of the Commission and Common Shares that may be issued upon exercise of
a stock option, warrant or other convertible security); or (iii)
securities that are convertible or exchangeable into Common Shares. For
a period of 90 days after the date of the Prospectus, the Selling
Shareholder will not, without the prior written consent of ▇▇▇▇▇,
exercise or cause to be exercised, directly or indirectly, any rights
to initiate the registration of Common Shares under the Act or Blue Sky
Laws (including, without limitation, any such registration rights
pursuant to that certain Registration Agreement among the Company, the
Selling Shareholder and ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇, dated as of January 25,
2002).
(e) The Selling Shareholder will furnish any documents,
instruments or other information which the Representatives may
reasonably request in connection with the sale and transfer of the
Shares to the Underwriters.
SECTION 9. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective, or
if this Agreement is terminated for any reason, the Company and the Selling
Shareholder will pay their pro rata share of the costs, fees and expenses
incurred in connection with the public offering of
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the Shares, in the case of the Selling Shareholder, in the proportion that the
number of Shares to be sold by the Selling Shareholder as set forth on Schedule
I annexed hereto, bears to the Shares as set forth on Schedule I annexed hereto,
and, in the case of the Company, the balance of such costs, fees and expenses.
Such costs, fees and expenses to be paid by the Company and the Selling
Shareholder include, without limitation:
(a) All costs, fees and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of
counsel for the Underwriters, but including such fees and disbursements
described in subsection (b) of this section 9) incurred in connection
with the performance of the Company's obligations hereunder, including
without limiting the generality of the foregoing: the registration fees
related to the filing of the Registration Statement with the
Commission; the fees and expenses related to listing of the Shares on
NYSE; the fees and expenses of the Company's counsel, accountants,
transfer agent and registrar; the costs and expenses incurred in
connection with the preparation, printing, shipping and delivery of the
Registration Statement, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments
and supplements provided for herein, this Agreement, the Durable Power
of Attorney and the Custody Agreement, including, without limitation,
shipping expenses via overnight delivery and/or courier service to
comply with applicable prospectus delivery requirements; and the costs
and expenses associated with the production of materials related to,
and travel expenses incurred by the management of the Company in
connection with, the various meetings to be held between the Company's
management and prospective investors.
(b) All registration fees and expenses, including legal fees
and disbursements of counsel for the Underwriters incurred in
connection with qualifying or registering all or any part of the Shares
for offer and sale under the Blue Sky Laws and the clearing of the
public offering and the underwriting arrangements evidenced hereby with
the NASD.
(c) All fees and expenses related to printing of the
certificates for the Shares, and all transfer taxes, if any, with
respect to the sale and delivery of the Shares.
Notwithstanding the foregoing, the Selling Shareholder shall be solely
responsible for any transfer or sales tax imposed upon the transfer and sale of
the Selling Shareholder's Shares to the Underwriters and for all fees and
expenses of the Attorneys-in-Fact and the Custodian. All costs and expenses
incident to the performance of the Selling Shareholder's obligations hereunder
which are not otherwise specifically provided for in this section will be borne
and paid solely by the Selling Shareholder. In the event the Selling Shareholder
shall fail to pay the Selling Shareholder's pro rata share of the costs, fees
and expenses described in this section within five days after demand by the
Representatives therefor, the Company shall be obligated to pay such costs, fees
and expenses on demand.
SECTION 10. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters under this Agreement shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Selling Shareholder herein set forth as of the date hereof and,
in the case of the Company, as of each Closing Date and, in
-20-
the case of the Selling Shareholder, as of the First Closing Date, to the
accuracy of the statements of the Company's officers, the Selling Shareholder
and the Attorneys-in-Fact on behalf of the Selling Shareholder made pursuant to
the provisions hereof, to the performance by the Company and the Selling
Shareholder of their respective obligations hereunder, and to the following
additional conditions, unless waived in writing by the Representatives:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 5:30 p.m., Washington, D. C.
time, on the date of this Agreement, or such later time and date as
shall have been consented to by the Representatives, which consent
shall be deemed to have been given if the Registration Statement shall
have been declared effective on or before the date and time requested
in the acceleration request submitted on behalf of the Representatives
pursuant to Rule 461 under the Act; all filings required by Rules
424(b) and 430A under the Act shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement shall
have been issued by the Commission or any state securities commission
nor, to the knowledge of the Company, shall any proceedings for that
purpose have been instituted or threatened; and any request of the
Commission or any state securities commission for inclusion of
additional information in the Registration Statement, or otherwise,
shall have been complied with to the reasonable satisfaction of the
Representatives acting in good faith.
(b) Since the dates as of which information is given in the
Registration Statement:
(i) there shall not have occurred any change or
development involving, or which could be reasonably expected to
involve, a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business; and
(ii) the Company shall not have sustained any loss
or interference from any labor dispute, strike, fire, flood,
windstorm, accident or other calamity (whether or not insured) or
from any court or governmental action, order or decree,
the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the reasonable and good faith opinion of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
(c) The Representatives shall not have advised the Company
that the Registration Statement or the Prospectus contains an untrue
statement of fact that, in the reasonable and good faith opinion of the
Representatives or counsel for the Underwriters, is material, or omits
to state a fact that, in the reasonable and good faith opinion of the
Representatives or such counsel, is material and is required to be
stated therein or necessary to make the statements therein not
misleading.
(d) The Representatives shall have received an opinion of
▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the Company addressed to the
Representatives, as the representatives of
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the Underwriters, and dated the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority
to own, lease and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and the
Registration Statement;
(ii) The authorized capital shares of the Company
consist of 40,000,000 Common Shares, without par value, and all such
shares conform as to legal matters to the descriptions thereof in the
Prospectus and the Registration Statement;
(iii) The issued and outstanding capital shares of the
Company immediately prior to the issuance and sale of the Shares to be
sold by the Company hereunder have been duly authorized and validly
issued, are fully paid and nonassessable, and there are no statutory,
or to the knowledge of such counsel, contractual preemptive,
preferential or, except as described in the Prospectus and to such
counsel's knowledge, other rights to subscribe for or purchase any
capital shares of the Company, and to such counsel's knowledge, no
capital shares of the Company have been issued in violation of any such
rights;
(iv) Each Subsidiary incorporated or organized under
Ohio or Delaware law, Pfaudler-Werke GmbH, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ GmbH,
▇▇▇▇▇▇▇ & ▇▇▇▇▇ U.K. Limited and Romaco N.V. (collectively, the
"Covered Subsidiaries") has been duly incorporated or organized and is
validly existing as a corporation, limited partnership or limited
liability company in good standing or active status under the laws of
its jurisdiction of incorporation or organization, with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in the
Prospectus and the Registration Statement; the issued and outstanding
shares of the capital stock of each Covered Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and
there are no statutory, or to such counsel's knowledge, contractual
preemptive, preferential or, to such counsel's knowledge, other rights
to subscribe for or purchase any shares of capital stock of any Covered
Subsidiary, and to such counsel's knowledge, no shares of capital stock
of any Covered Subsidiary have been issued in violation of such rights;
except as set forth in the Prospectus or on Schedule III, the Company
owns directly or indirectly and, to such counsel's knowledge,
beneficially all of the issued and outstanding capital stock of each
Covered Subsidiary, free and clear of any and all liens, claims,
encumbrances and security interests;
(v) The certificates for the Shares to be delivered
hereunder are in due and proper form and conform to the requirements of
applicable law; and when duly countersigned by the Company's transfer
agent, and delivered to the Representatives or upon the order of the
Representatives against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Shares to be sold
by the Company represented thereby will be duly authorized and validly
issued, fully paid and
-22-
nonassessable, and free of any statutory, or to such counsel's
knowledge, contractual preemptive, preferential or other rights to
subscribe for or purchase Common Shares;
(vi) To the knowledge of such counsel (based solely
upon a telephonic conversation with the staff of the Commission), 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 that purpose have been initiated or
are threatened under the Act or any Blue Sky Laws; the Registration
Statement and the Prospectus and any amendment or supplement thereto,
including any document incorporated by reference in the Registration
Statement, (except for the financial statements and other statistical
or financial data included therein as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act; the conditions for use of Form S-3, set forth
in the General Instructions thereto, have been satisfied;
(vii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened that are required to be
described in the Registration Statement or the Prospectus that are not
so described or which question the validity of this Agreement or any
action taken or to be taken pursuant thereto, nor, to such counsel's
knowledge, is there any transaction, relationship, agreement, contract
or other document of a character required to be described in the
Registration Statement or the Prospectus, or required to be filed under
the Exchange Act if upon such filing they would be incorporated, in
whole or in part, by reference therein, or to be filed as an exhibit to
or incorporated by reference in the Registration Statement by the Act,
which is not described, filed or incorporated by reference as required;
(viii) The statements set forth in the Prospectus under
the heading "Description of Common Shares" and in the Registration
Statement under Item 15 insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly summarize, in all material respects, the information called for
with respect to such legal matters, documents and proceedings;
(ix) The Company has full corporate power and authority
to enter into and perform this Agreement; the performance of the
Company's obligations hereunder and the consummation of the
transactions described herein have been duly authorized by the Company
by all necessary corporate action and this Agreement has been duly
executed and delivered by and on behalf of the Company, and is a legal,
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except that: (A) rights to
indemnity or contribution hereunder may be limited by applicable law;
(B) enforceability of this Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, and by equitable principles limiting the
right to specific performance or other equitable relief; (C) such
counsel shall not be required to opine as to the enforceability of any
provision requiring a party to pay the legal fees and expenses of any
other party; and (D) such counsel may assume for such purpose that
Wisconsin law is the same as Ohio law; no consent, approval,
authorization or other order or decree of any court, regulatory
-23-
or governmental body, arbitrator, administrative agency or other
instrumentality of the United States, the State of Delaware or the
State of Ohio is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated by this
Agreement (except for compliance with the Act, the Exchange Act,
applicable Blue Sky Laws and the clearance of the underwriting
arrangements by the NASD);
(x) The execution, delivery and performance of this
Agreement by the Company will not: (A) violate any provisions of the
Governing Documents of the Company or any Covered Subsidiary; (B)
violate any provisions of, or result in the breach, modification or
termination of, or constitute a default under, any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust, other
evidence of indebtedness or other instrument to which the Company or
any Covered Subsidiary is a party or by which the Company or any
Covered Subsidiary, or any of their respective owned or leased property
is bound, and which is filed or incorporated by reference as an exhibit
to the Registration Statement; or (C) violate any statute, ordinance,
order, rule, decree or regulation of any court, regulatory or
governmental body, arbitrator, administrative agency or other
instrumentality of the United States, the State of Delaware or the
State of Ohio (assuming compliance with all applicable federal and
state securities laws);
(xi) To such counsel's knowledge, except as described in
the Prospectus, there are no holders of Common Shares or other
securities of the Company, or securities that are convertible or
exchangeable into Common Shares or other securities of the Company,
that have rights to the registration of such securities under the Act
or any Blue Sky Laws;
(xii) The Common Shares are listed on the NYSE and are
registered under the Exchange Act and the Shares are authorized for
trading on the NYSE;
(xiii) To such counsel's knowledge, neither the Company
nor any Covered Subsidiary is, nor with the giving of notice or passage
of time or both would be, in violation of its respective Governing
Documents or, to such counsel's knowledge, in default in any material
respect in the performance of any document that is filed as an exhibit
to or incorporated by reference in the Registration Statement, to which
the Company or any Covered Subsidiary is subject or bound;
(xiv) Neither the Company nor any Subsidiary is an
"investment company", an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended, and, upon
its receipt of any proceeds from the sale of the Shares, the Company
will not become or be deemed to be an "investment company" thereunder;
(xv) The description included or incorporated by
reference in the Registration Statement and the Prospectus of statutes,
law, regulations, legal and governmental proceedings, and contracts and
other legal documents described or
-24-
incorporated by reference therein fairly and correctly present, in all
material respects, the information required to be included therein by
the Act; and
(xvi) All offers and sales by the Company of its capital
shares of which such counsel has knowledge in the three years preceding
the date hereof were at all relevant times duly registered under or
exempt from the registration requirements of the Act, and were duly
registered under or the subject of an available exemption from the
registration requirements of any applicable Blue Sky Laws.
Such counsel shall also state that they have participated in conferences with
officers and other representatives of the Company and representatives of the
Underwriters and their counsel during which the content of the Registration
Statement and the Prospectus and related matters were discussed and reviewed,
and that, although such counsel is not verifying, is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained or incorporated by reference into the Registration
Statement or the Prospectus (except for those specifically passed upon in this
opinion), on the basis of the information that was developed in the course of
the performance of such services, nothing has come to their attention that
causes them to believe that the Registration Statement including any document
incorporated by reference therein, on its effective date, contained any untrue
statement of material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus, or any amendment or supplement thereto
including any document incorporated by reference therein, as of its issue date
and as of the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits 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 (provided that such counsel need express no belief
regarding the financial statements and related schedules and other financial or
statistical data contained in the Registration Statement).
To the extent that any opinions given by such counsel for the Company are stated
as being based on such counsel's knowledge or are given to the knowledge of such
counsel, such qualification shall signify that no information has come to the
attention of the attorneys in such firm who have been significantly involved in
the representation of the Company and/or the Subsidiaries that would give them
actual current knowledge of the existence or absence of the matter in question.
In rendering such opinion, counsel for the Company may rely, to the extent
counsel reasonably deems such reliance warranted, as to matters of fact upon
certificates of officers of the Company and of governmental officials, and as to
matters of the law of jurisdictions other than the United States, the State of
Ohio and the State of Delaware, on the legal opinions of local counsel, and
copies of all such certificates and opinions shall be furnished to the
Representatives and for the Underwriters on or before each Closing Date.
(e) The Representatives shall have received an opinion from
Duke, Holzman, ▇▇▇▇▇▇ & Photiadis, LLP, counsel for the Selling
Shareholder, dated the First Closing Date to the effect that:
-25-
(i) Each of this Agreement, the Durable Power of Attorney
and the Custody Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and such agreement
constitutes the valid and binding agreement of the Selling Shareholder,
enforceable in accordance with its respective terms, except that rights
to indemnity or contribution thereunder may be limited by applicable
law and except as enforceability of such agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting the rights of creditors and by equitable principles
limiting the right to specific performance or other equitable relief;
(ii) The execution and delivery of this Agreement, the Durable Power of
Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not, if applicable,
result in the violation of any provisions of the Articles of
Incorporation, By-laws or other governing documents of the Selling
Shareholder, or constitute a breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage,
deed of trust or other instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder or the Selling Shareholder's
property may be bound or affected, or any statute, rule or regulation
applicable to the Selling Shareholder, or violate any order or decree
of any court, regulatory or governmental body, administrative body or
instrumentality of the United States or other jurisdiction having
jurisdiction over the Selling Shareholder or any of the Selling
Shareholder's property, which violation would reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), business, properties, net worth or results of operations of
the Selling Shareholder;
(iii) The Selling Shareholder has full legal right, power
and authority, and has secured any consent, approval, authorization and
order required to enter into and perform this Agreement, the Durable
Power of Attorney and the Custody Agreement and to sell, assign,
transfer and deliver title to the Shares to be sold by the Selling
Shareholder as provided herein; and upon delivery to the Underwriters
or upon the order of the Representatives against payment of the agreed
consideration therefor in accordance with the provisions of this
Agreement, the Underwriters will acquire good and marketable title to
the Shares to be sold hereunder by the Selling Shareholder, free and
clear of all voting trust arrangements, liens, encumbrances, security
interests, equities, claims and community or marital property rights;
and
(iv) To such counsel's knowledge, the information concerning
the Selling Shareholder contained in the Prospectus complies in all
material respects with the Act.
In rendering such opinion, counsel for the Selling Shareholder may rely, to the
extent counsel reasonably deems such reliance warranted, as to matters of fact
upon certificates of the Selling Shareholder, and as to matters of the law of
jurisdictions other than the United States, the State of New York and the State
of Delaware, on the legal opinions of local counsel, and copies of all such
certificates and opinions shall be furnished to the Representatives and counsel
for the Underwriters on or before the First Closing Date.
-26-
(f) The Representatives shall have received an opinion of
▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
First Closing Date or the Second Closing Date, as the case may be, with
respect to the issuance and sale of the Shares hereunder, the
Registration Statement and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers and
records as they request for the purpose of enabling them to pass upon
such matters.
(g) The Representatives shall have received on each Closing
Date, a certificate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief
Executive Officer, and ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and Chief
Financial Officer, of the Company, to the effect that:
(i) The representations and warranties of the Company set
forth in section 2 hereof are true and correct as of the date of this
Agreement and as of the date of such certificate, and the Company has
complied with all the agreements and satisfied all the conditions to be
performed or satisfied by it at or prior to the date of such
certificate;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus or
any amendment or supplement thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the
knowledge of the respective signatories, no proceedings for that
purpose have been initiated or are pending or contemplated under the
Act or under the Blue Sky Laws of any jurisdiction;
(iii) Each of the respective signatories has examined the
Registration Statement and the Prospectus, and any amendment or
supplement thereto, including any documents filed under the Exchange
Act and deemed to be incorporated by reference in the Registration
Statement, and, as of the effective date of the Registration Statement,
such documents contained or incorporated by reference from another
document filed with the Commission all statements of material fact
required to be stated therein, and do not include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and since the date on which the Registration Statement was
initially filed, no event has occurred that was required to be set
forth in an amended or supplemented prospectus or in an amendment to
the Registration Statement that has not been so set forth, and there
has been no document required to be filed under the Exchange Act that
upon such filing would be deemed to be incorporated by reference in the
Registration Statement that has not been so filed; and
(iv) Since the date hereof, there shall not have occurred
any change or development involving, or which could be expected to
involve, a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as disclosed
in, or contemplated by, the Prospectus and the Registration Statement
as heretofore amended or (but only if the Representatives expressly
consent thereto in writing, which consent shall not be unreasonably
withheld) as disclosed in, or contemplated by, an amendment or
supplement thereto filed with the Commission and
-27-
delivered to the Representatives after the execution of this Agreement;
since the date hereof and except as so disclosed or contemplated or in
the ordinary course of business, the Company has not incurred any
material liability or obligation, direct or indirect, or entered into
any transaction that is material to the Company; since the date hereof
and except as so disclosed or contemplated, there has not been any
change (A) in the outstanding capital shares of the Company except for
the issuance and sale by the Company of Common Shares upon exercise of
presently existing outstanding stock options, the sale of the Shares to
be sold by the Company pursuant to this Agreement, the issuance of
Common Shares upon the conversion of Convertible Notes and the grant of
employee stock options (none of which options are exercisable during
the 90-day period from the date of the Prospectus) and Common Shares
pursuant to the Company's Option Plans and other Plans; or (B) that is
material to the Company in the short-term debt or long-term debt of the
Company; since the date hereof and except as so disclosed or
contemplated, the Company has not acquired any Common Shares or other
capital shares of the Company except pursuant to the terms of the Plans
nor has the Company declared or paid any dividend (other than its
regular quarterly dividend), or made any other distribution, upon its
outstanding Common Shares payable to shareholders of record on a date
prior to such Closing Date; since the date hereof and except as so
disclosed or contemplated or incurred in the ordinary course of
business, the Company has not incurred any material contingent
obligations, and no material litigation is pending or threatened
against the Company; and, since the date hereof and except as so
disclosed, the Company has not sustained any material loss or
interference from any strike, fire, flood, windstorm, accident or other
calamity (whether or not insured) or from any court or governmental
action, order or decree.
The delivery of the certificate provided for in this subsection (g) shall be and
constitute a representation and warranty of the Company as to the facts required
in the immediately foregoing clauses (i), (ii), (iii) and (iv) to be set forth
in said certificate.
(h) The Representatives shall have received a certificate from
the Selling Shareholder (which may be signed by the Selling
Shareholder's Attorneys-in-Fact, or either of them) dated the First
Closing Date to the effect that the representations and warranties of
the Selling Shareholder in Section 3 of this Agreement are true and
correct as of the date of this Agreement and as of the date of such
certificate, as if again made on and as of such Closing Date, and the
Selling Shareholder has complied with all of the agreements and
satisfied all of the conditions to be performed or satisfied by the
Selling Shareholder at or prior to such Closing Date.
(i) At the time this Agreement is executed and also on each
Closing Date, there shall be delivered to the Representatives a letter
addressed to the Representatives, as representatives of the
Underwriters, from Ernst & Young LLP, the Company's independent
accountants, the first letter to be dated the date of this Agreement,
the second letter to be dated the First Closing Date and the third
letter (if applicable) to be dated the Second Closing Date, which shall
be in form and substance satisfactory to the Representatives and shall
contain information as of a date within five days of the date of such
letters. There shall not have been any change in any specified items
relating to the
-28-
Company or the Subsidiaries set forth in any of the letters referred to
in this subsection (i) which makes it impracticable or inadvisable in
the reasonable and good faith judgment of the Representatives to
proceed with the public offering or purchase of the Shares as
contemplated hereby.
(j) The Shares shall have been qualified or registered for
sale under the Blue Sky Laws of such jurisdictions as shall have been
specified by the Representatives, the underwriting terms and
arrangements for the offering shall have been cleared by the NASD, and
the Common Shares shall have been authorized for listing on the NYSE
and shall have remained registered under the Exchange Act.
(k) The Company shall have obtained and delivered to the
Representatives executed copies of the Lock-Up Agreements.
(l) The Representatives shall have received such further
certificates and documents as the Representatives may reasonably
request (including certificates of officers of the Company and
certificates of government officials, where available, evidencing the
valid existence of each Subsidiary).
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory to the Representatives and to ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, counsel
for the Underwriters. The Company and the Selling Shareholder shall furnish the
Representatives with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Representatives may reasonably
request.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at either Closing Date is not so satisfied, this
Agreement at the election of the Representatives will terminate upon
notification to the Company and the Attorneys-in-Fact, or any one of them, for
the Selling Shareholder without liability on the part of any Underwriter,
including the Representatives, the Company or the Selling Shareholder except for
the provisions of section 7(l) hereof, the expenses to be paid by the Company
and the Selling Shareholder pursuant to section 9 hereof and except to the
extent provided in section 12 hereof.
SECTION 11. MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT.
The Company will use its reasonable efforts and the Selling Shareholder will use
its best efforts to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement, and, if such stop order is issued,
to obtain as soon as possible the lifting thereof.
SECTION 12. INDEMNIFICATION.
(a) Subject to the last paragraph of this Section 12, the
Company agrees to indemnify and hold harmless each Underwriter and each
person (including each director, member, partner or officer thereof)
who controls any Underwriter within the meaning of the Act or the
Exchange Act, from and against any losses, claims, damages, expenses,
liabilities or actions in respect thereof ("Claims"), joint or several,
to which such Underwriter or each such controlling person may become
subject under the Act, the
-29-
Exchange Act, Blue Sky Laws or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in
settlement of any litigation if such settlement is effected with the
agreement of the Company), insofar as such Claims arise out of or are
based upon any breach of any representation, warranty or covenant made
by the Company in this Agreement, or 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 in any application filed under any Blue Sky
Law or other document executed by the Company for that purpose or based
upon written information furnished by the Company and filed in any
state or other jurisdiction to qualify any or all of the Shares under
the securities laws thereof (any such document, application or
information being hereinafter called a "Blue Sky Application") or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading. Subject to the last
paragraph of this Section 12, the Company agrees to reimburse each
Underwriter and each such controlling person for any legal fees or
other expenses reasonably incurred by such Underwriter or any such
controlling person in connection with investigating or defending any
such Claim as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that: (i) any
such Claim arises out of or is based upon an untrue statement or
alleged untrue statement made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or supplement thereto or in any
Blue Sky Application in reliance upon and in conformity with the
written information furnished to the Company pursuant to section 5 of
this Agreement; or (ii) any such Claim results from failure of an
Underwriter to deliver a Prospectus, if the person asserting such Claim
purchased Shares from such Underwriter and a copy of the Prospectus (as
then amended if the Company shall have furnished any amendments
thereto) was not sent or given by or on behalf of such Underwriter to
such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Shares to such person,
and if the Prospectus (as so amended) would have cured the defect
giving rise to such Claim, unless such failure to deliver a Prospectus
was due to failure by the Company to provide copies of the Prospectus
to the Underwriters as required by this Agreement. The indemnification
obligations of the Company as provided above are in addition to and in
no way limit any liabilities the Company may otherwise have.
(b) The Selling Shareholder agrees to indemnify and hold
harmless each Underwriter and each controlling person from and against
any Claims to which such Underwriter or each such controlling person
may become subject under the Act, the Exchange Act, Blue Sky Laws or
other federal or state statutory laws or regulations, at common law or
otherwise (including payments made in settlement of any litigation),
insofar as such Claims arise out of or are based upon any breach of any
representation, warranty or covenant made by the Selling Shareholder in
this Agreement.
(c) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors and each
of its officers who signs the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Act or the
Exchange Act and the Selling Shareholder and each person, if
-30-
any, who controls the Selling Shareholder within the meaning of the Act
or the Exchange Act from and against any Claim to which the Company,
the Selling Shareholder or any such director, officer, controlling
person may become subject under the Act, the Exchange Act, Blue Sky
Laws or other federal or state statutory laws or regulations, at common
law or otherwise (including payments made in settlement of any
litigation, if such settlement is effected with the written consent of
such Underwriter and ▇▇▇▇▇), insofar as such Claim arises out of or is
based upon any breach of any representation, warranty or covenant made
by such Underwriter in this Agreement or upon any untrue or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto, or in any Blue Sky Application or arises out of
or is based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading
(but only to the extent, that such untrue statement or alleged untrue
statement or such omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or in any Blue Sky Application, in
reliance solely upon and in conformity with the written information
furnished by the Representatives to the Company pursuant to section 5
of this Agreement). Each Underwriter will severally reimburse any legal
fees or other expenses incurred by the Company, the Selling Shareholder
or any such director, officer, controlling person in connection with
investigating or defending any such Claim, and from any and all Claims
resulting from failure of an Underwriter to deliver a Prospectus, if
the person asserting such Claim purchased Shares from such Underwriter
and a copy of the Prospectus (as then amended if the Company shall have
furnished any amendments thereto) was not sent or given by or on behalf
of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim, unless such failure to
deliver a Prospectus was due to failure by the Company to provide
copies of the Prospectus to the Underwriters as required by this
Agreement. The indemnification obligations of each Underwriter as
provided above are in addition to any liabilities any such Underwriter
may otherwise have. Notwithstanding the provisions of this section, no
Underwriter shall be required to indemnify or reimburse the Company, or
any officer, director, controlling person or the Selling Shareholder in
an aggregate amount in excess of the total price at which the Shares
purchased by any such Underwriter hereunder were offered to the public,
less the amount of any damages such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
(d) The Selling Shareholder agrees to indemnify and hold
harmless the Company, each of its directors and each of its officers
who signs the Registration Statement, and each person, if any,
controlling the Company within the meaning of the Act or the Exchange
Act to the same extent as the foregoing indemnity from the Company to
each Underwriter set forth in subsection (a) of this section insofar as
such Claims arise out of or are based upon any breach of any
representation, warranty or covenant by the Selling Shareholder in this
Agreement. In case any Claim shall be brought or asserted against the
Company, its directors, such officers or any such
-31-
controlling person, in respect of which indemnity may be sought against
the Selling Shareholder, the Selling Shareholder shall have the rights
and duties given to the Company, and the Company, such directors or
officers and any such controlling person shall have the rights and
duties given to the Underwriters by subsection (a) of this section.
(e) Promptly after receipt by an indemnified party under this
section of notice of the commencement of any action in respect of a
Claim, such indemnified party will, if a Claim in respect thereof is to
be made against an indemnifying party under this section, notify the
indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party on a timely basis will not
relieve an indemnifying party from any liability it may have to any
indemnified party under this section or otherwise. In case any such
action is brought against any indemnified party, and such indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the
extent that he, she or it may wish, jointly with all other indemnifying
parties, similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to the indemnified party and/or other indemnified parties
which are different from or additional to those available to any
indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action 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 an indemnified
party.
(f) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the
defense of such action and upon approval by the indemnified party of
counsel selected by the indemnifying party, the indemnifying party will
not be liable to such indemnified party under this section for any
legal fees or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, unless:
(i) the indemnified party shall have employed separate
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the second to last sentence of
subsection (e) of this section (it being understood, however, that the
indemnifying party shall not be liable for the legal fees and expenses
of more than one separate counsel, approved by ▇▇▇▇▇, if one or more of
the Underwriters or their controlling persons are the indemnified
parties);
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(ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after the indemnified
party's notice to the indemnifying party of commencement of the action;
or
(iii) the indemnifying party has authorized the
employment of counsel at the expense of the indemnifying party.
(g) If the indemnification provided for in this section is
unavailable to an indemnified party under subsection (a), (b), (c) or
(d) hereof in respect of any Claim referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall, subject to the limitations hereinafter set forth, contribute to
the amount paid or payable by such indemnified party as a result of
such Claim:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Selling Shareholder and
the Underwriters from the offering of the Shares; or
(ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company, the Selling
Shareholder and the Underwriters in connection with the statements or
omissions that resulted in such Claim, as well as any other relevant
equitable considerations.
The relative benefits received by each of the Company, the
Selling Shareholder and the Underwriters shall be deemed to be in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the amount of the underwriting discounts and commissions
per share appearing on the cover page of the Prospectus bears to the public
offering price per share appearing thereon, and the Company (including its
officers and directors and controlling persons) and the Selling Shareholder are
responsible for the remaining portion. The relative fault of the Company, the
Selling Shareholder and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholder or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the Claims referred to above shall be deemed
to include, subject to the limitations set forth in subsections (e) and (f) of
this section, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
(h) The Company, the Selling Shareholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this section were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose)
or by any other method or allocation which does not take into account
the equitable considerations referred to in subsection (f) of this
section. Notwithstanding the other provisions of this section, no
Underwriter shall be required to contribute any
-33-
amount that is greater than the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this section are several in
proportion to their respective underwriting commitments and not joint.
(i) Notwithstanding any provision of this section 12 to
the contrary, the liability of the Selling Shareholder arising under
this section 12 shall not exceed the purchase price received by the
Selling Shareholder from the Underwriters for the Shares sold by the
Selling Shareholder.
SECTION 13. DEFAULT OF UNDERWRITERS. It shall be a condition
to the obligations of each Underwriter to purchase the Shares in the manner as
described herein, that, except as hereinafter provided in this section, each of
the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on either
the First Closing Date or the Second Closing Date and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of Shares which
the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements for the purchase of such Shares by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Shares which such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of Shares with respect to which such default or defaults occur
is greater than ten percent (10%) of the total number of Shares which the
Underwriters are obligated to purchase on such Closing Date, and arrangements
satisfactory to the Representatives for the purchase of such Shares by other
persons are not made within thirty-six hours after such default, this Agreement
will terminate without liability on the part of any nondefaulting Underwriter,
the Company or the Selling Shareholder except for the expenses to be paid by the
Company and the Selling Shareholder pursuant to section 9 hereof and except to
the extent provided in section 12 hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representatives shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, for not more than seven business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
-34-
SECTION 14. EFFECTIVE DATE. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto. Such execution and delivery shall include an executed copy of this
Agreement sent by telecopier, facsimile transmission or other means of
transmitting written documents.
SECTION 15. TERMINATION. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof, this Agreement
may be terminated by the Representatives prior to or on the First Closing Date
and the over-allotment option from the Company referred to in section 6 hereof,
if exercised, may be cancelled by the Representatives at any time prior to or on
the Second Closing Date, if in the reasonable and good faith judgment of the
Representatives, payment for and delivery of the Shares is rendered
impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been
generally established on the NYSE or the American Stock Exchange, or
trading in securities generally shall have been suspended or materially
limited on either such exchange or on The Nasdaq Stock Market, or
trading in the Common Shares shall have been suspended by the
Commission or the NYSE, or a general banking moratorium shall have been
established by either federal or state authorities in New York, Ohio or
Wisconsin;
(b) any event shall have occurred or shall exist which makes
untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or which is not
reflected in the Registration Statement but should be reflected therein
to make the statements or information contained therein not misleading
in any material respect;
(c) after the date hereof, there shall have occurred any
change or development involving, or which could reasonably be expected
to involve, a Material Adverse Effect, whether or not arising in the
ordinary course of business; or
(d) after the date hereof, an outbreak or escalation of
hostilities or other national or international calamity or crisis, a
declaration by the United States of a national emergency or war, or any
change in political, financial or economic conditions shall have
occurred or shall have accelerated to such extent, in the reasonable
and good faith judgment of the Representatives, as to have a material
adverse effect on the financial markets of the United States, or to
make it impracticable or inadvisable to proceed with completion of the
sale of and payment for the Shares as provided in this Agreement.
Any termination pursuant to this Section shall be without
liability on the part of any Underwriter to the Company or the Selling
Shareholder, or on the part of the Company or the Selling Shareholder to any
Underwriter, except for expenses to be paid by the Company and the Selling
Shareholder pursuant to section 9 hereof or reimbursed by the Company pursuant
to section 7(n) hereof and except as to indemnification to the extent provided
in section 12 hereof.
-35-
SECTION 16. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations, warranties,
covenants and other statements of the Company, of its officers or directors, of
the Selling Shareholder and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Shareholder or the Company or any of its or their partners, officers, directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
SECTION 17. NOTICES. All communications hereunder will be in
writing and, if sent to the Representatives, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & Co. Incorporated at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Managing Director, with a copy to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and if sent to the Company, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to the Company
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice
President and Chief Financial Officer, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇; and, if sent to the Selling Shareholder, will be mailed, delivered,
telecopied (with receipt confirmed) or telegraphed and confirmed to the
Attorneys-in-Fact, or either of them, in care of the Company, with copies to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Duke, Holzman, ▇▇▇▇▇▇ & Photiadis, LLP,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 18. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in section 12 hereof
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
SECTION 19. PARTIAL UNENFORCEABILITY. If any section,
paragraph, clause or provision of this Agreement is for any reason determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph, clause or provision hereof.
SECTION 20. APPLICABLE LAW; COUNTERPARTS. This Agreement shall
be governed by and construed in accordance with the internal laws of the State
of Wisconsin without reference to conflict of law principles thereunder. This
Agreement may be signed in various counterparts, which together shall constitute
one and the same instrument, and shall be effective when at least one
counterpart hereof shall have been executed by or on behalf of each party
hereto.
-36-
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholder and the several Underwriters, including the Representatives, all in
accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:
--------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
THE SELLING SHAREHOLDER:
By:
---------------------------------------------
Attorney-in-Fact
By:
---------------------------------------------
Attorney-in-Fact
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
MCDONALD INVESTMENTS INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
Acting as Representatives of the several
Underwriters (including themselves) identified
in Schedule II annexed hereto.
By:
---------------------------------------------
Authorized Representative
-37-
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
SCHEDULE I
NUMBER OF FIRM NUMBER OF OPTIONAL
SHARES SHARES
------ ------
The Company.............................. 1,550,000 300,000
The Selling Shareholder.................. 450,000 0
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
SCHEDULE II
NAME OF UNDERWRITER NUMBER OF FIRM
SHARES TO
BE PURCHASED
------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated..................................
McDonald Investments Inc............................................
-------------
2,000,000
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
SCHEDULE III
EXHIBIT A
---------
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
FORM OF LOCK-UP AGREEMENT
___________, 2002
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
MCDONALD INVESTMENTS INC.
As Representatives of the several Underwriters
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated and
McDonald Investments Inc., as Representatives of the several Underwriters,
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
with ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., an Ohio corporation (the "Company"), providing for
the public offering (the "Public Offering") by the several Underwriters,
including the Representatives (the "Underwriters"), of shares (the "Shares") of
the Common Stock, no par value of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
final prospectus relating to the Public Offering (the "Prospectus"): (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (whether such shares or any
such securities are now owned by the undersigned or are hereafter acquired), or
(2) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the sale of any Shares to
the Underwriters pursuant to the Underwriting Agreement. In addition, the
undersigned agrees that, without prior written consent of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Incorporated on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
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Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
agreement between the Company and the Underwriters.
Very truly yours,
_______________________________________________
(Name)
_______________________________________________
(Address)
