Draft 5/5/97
EXHIBIT 1.1
RENTAL SERVICE CORPORATION
4,000,000 Shares Common Stock/1/
UNDERWRITING AGREEMENT
___________, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
As Representatives of the Several
Underwriters Named in Schedule A
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Section 1. Introductory. Rental Service Corporation ("Company") a
Delaware corporation, will have, as of the First Closing Date hereinafter
defined, an authorized capital stock consisting of 350,000 shares of Redeemable
Preferred Stock, $.01 par value, of which no shares were outstanding as of
_________, 1997, 500,000 shares of Preferred Stock, $.01 par value, of which no
shares were outstanding as of _________, 1997 and 20,000,000 shares, $.01 par
value, of Common Stock ("Common Stock"), of which _________ shares were
outstanding as of such date. The Company proposes to issue and sell 3,000,000
shares of its authorized but unissued Common Stock, and certain stockholders of
the Company (collectively referred to as the "Selling Stockholders" and named in
Schedule B) propose to sell 1,000,000 shares of the Company's issued and
outstanding Common Stock to the several underwriters named in Schedule A as it
may be amended by the Pricing Agreement hereinafter defined ("Underwriters"),
who are acting severally and not jointly. Collectively, such total of 5,500,000
shares of Common Stock proposed to be sold by the Company and the Selling
Stockholders is hereinafter referred to as the "Firm Shares." In addition,
certain Selling Stockholders propose to grant to the Underwriters an option to
purchase up to 600,000 additional shares of Common Stock ("Option Shares") as
provided in Section 5 hereof. The Firm Shares and, to the extent such option is
exercised, the Option Shares, are hereinafter collectively referred to as the
"Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon as you deem advisable after the registration statement
hereinafter referred to becomes effective, if it has not yet become effective,
and the Pricing Agreement hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, the Selling Stockholders and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto ("Pricing Agreement"). The Pricing
Agreement may take the form of an exchange of any standard form of written
telecommunication between the Company, the Selling Stockholders and the
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Pricing
---------------------
/1/Plus an option to acquire up to 600,000 additional shares to cover over
allotments.
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company and each of the Selling Stockholders hereby confirm their
agreements with the Underwriters as follows:
Section 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters and the Selling Stockholders
that:
(a) A registration statement on Form S-1 (File No. 333-______) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" unless indicated to
the contrary, all references herein to specific rules are rules promulgated
under the ▇▇▇▇ ▇▇▇); and the Company has so prepared and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof and will file such additional
amendments thereto and such amended prospectuses as may hereafter be
required. There have been or will promptly be delivered to you three signed
copies of such registration statement and amendments, three copies of each
exhibit filed therewith, and conformed copies of such registration
statement and amendments (but without exhibits) and of the related
preliminary prospectus or prospectuses and final forms of prospectus for
each of the Underwriters in such amounts as you shall reasonably request.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "Registration Statement,"
and the "Prospectus," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of the
1933 Act, all references to "Prospectus" shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken
together, provided to the Underwriters by the Company in accordance with
Rule 434 of the 1933 Act ("Rule 434 Prospectus"). Any registration
statement (including any amendment or supplement thereto or information
which is deemed part thereof) filed by the Company under Rule 462(b) ("Rule
462(b) Registration Statement") shall be deemed to be part of the
"Registration Statement" as defined herein, and any prospectus (including
any amendment or supplement thereto or information which is deemed part
thereof) included in such registration statement shall be deemed to be part
of the "Prospectus", as defined herein, as appropriate. The Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder are hereinafter collectively referred to as the
"Exchange Act."
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted 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; and when the Registration Statement became or becomes
effective, and at all times subsequent thereto, up to the First Closing
Date or the Second Closing Date hereinafter defined, as the case may be,
the Registration Statement, including the
-2-
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b), if applicable, and the Prospectus
and any amendments or supplements thereto, contained or will contain all
statements that are required to be stated therein in accordance with the
1933 Act and in all material respects conformed or will in all material
respects conform to the requirements of the 1933 Act, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, 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 in order to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from any preliminary prospectus, the
Registration Statement, the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to
the Company by or on behalf of (x) any Underwriter through the
Representatives expressly for use in the preparation thereof (it being
understood and agreed by the parties hereto that the only written
information furnished to the Company by or on behalf of the Underwriters
through the Representatives is the written information described in Section
4 hereof) or (y) any Selling Stockholder expressly for use in the
preparation thereof.
(c) The Company and its subsidiaries have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, with corporate power and
authority to own their properties and conduct their business as described
in the Prospectus; the Company and each of its subsidiaries are duly
qualified to do business as foreign corporations under the corporation law
of, and are in good standing as such in, each jurisdiction in which they
own or lease substantial properties, have an office, or in which
substantial business is conducted and such qualification is required except
in any such case where the failure to so qualify or be in good standing
would not have a material adverse effect upon the business, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"); and no
proceeding of which the Company has knowledge has been instituted in any
such jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification.
(d) Except as disclosed in the Registration Statement (including,
but not limited to, contracts filed as exhibits to the Registration
Statement), the Company owns directly or indirectly 100 percent of the
issued and outstanding capital stock of each of its subsidiaries, free and
clear of any claims, liens, encumbrances or security interests and all of
such capital stock has been duly authorized and validly issued and is fully
paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable, and conform to the description thereof contained in the
Prospectus.
(f) The Shares to be sold by the Company 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.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws, each as amended to date, and will not result in the breach, or be
in contravention, of any provision of any agreement, franchise, license,
indenture, mortgage, deed of trust, or other instrument to which the
Company or any subsidiary is a party or by which the Company, any
subsidiary or the property of any of them may be bound or affected, or any
order, rule or regulation applicable to the Company or any subsidiary of
any court or regulatory body, administrative agency or
-3-
other governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, or any order of any court
or governmental agency or authority entered in any proceeding to which the
Company or any subsidiary was or is now a party or by which it is bound,
except for any breach or contravention which, singly or in the aggregate,
would not have a Material Adverse Effect. 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 this Agreement or the Pricing Agreement or the consummation of
the transactions contemplated herein or therein, except for compliance with
the 1933 Act, the Exchange Act and blue sky laws applicable to the public
offering of the Shares by the several Underwriters and clearance of such
offering with the National Association of Securities Dealers, Inc.
("NASD"). This Agreement has been duly executed and delivered by the
Company.
(h) Ernst & Young LLP are independent accountants with respect to
the Company and its subsidiaries as required by the 1933 Act.
(i) The consolidated financial statements together with the related
notes and schedules of the Company included in the Registration Statement
present fairly the consolidated financial position of the Company as of the
respective dates of such financial statements, and the consolidated results
of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed in the Prospectus, and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. The financial information set forth in the Prospectus under
"Selected Consolidated Financial Information and Operating Data" presents
fairly on the basis stated in the Prospectus, the information set forth
therein.
The unaudited pro forma consolidated financial statements and
other unaudited pro forma information included in the Prospectus present
fairly in all material respects the information shown therein, have been
prepared in accordance with generally accepted accounting principles and
the Commission's rules and guidelines with respect to pro forma financial
statements and other pro forma information, have been properly compiled on
the pro forma basis described therein, and, in the opinion of the Company,
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate under the circumstances.
(j) (x) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or in default under any consent decree,
or in default with respect to any material provision of any lease, loan
agreement, franchise, license, permit or other contract obligation to which
it is a party; and (y) to the Company's knowledge, there does not exist any
state of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would constitute
such an event of default, except in the case of clauses (x) and (y) for
defaults, events of default and violations which neither singly nor in the
aggregate are material to the Company and its subsidiaries taken as a
whole.
(k) There are no legal or governmental proceedings pending
(including, without limitation, proceedings related to environmental or
discrimination matters) or, to the Company's knowledge, threatened to which
the Company or any subsidiary is a party or of which property owned or
leased by the Company or any subsidiary is the subject, or which are not
disclosed in the Prospectus and which, if decided adversely to the Company
or such subsidiaries, are reasonably expected to have a Material Adverse
Effect or which question the validity of this Agreement or the Pricing
Agreement or any action taken or to be taken pursuant hereto or thereto.
-4-
(l) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock
except as disclosed in the Prospectus. Holders of registration rights who
are not Selling Stockholders received proper notice from the Company with
respect to such rights and have not exercised such rights with respect to
the offering being made by the Prospectus.
(m) The Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the
Registration Statement), subject to no lien (except liens for taxes not yet
due and payable), mortgage, pledge, charge or encumbrance of any kind
except those, if any, reflected in such financial statements (or elsewhere
in the Registration Statement (including, but not limited to, contracts
filed as exhibits to the Registration Statement)) or which are not material
to the Company and its subsidiaries taken as a whole. The Company and each
of its subsidiaries hold their respective leased properties which are
material to the Company and its subsidiaries taken as a whole under valid
and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Registration Statement, the Company and its
subsidiaries, taken as a whole, have not incurred any material liabilities
or obligations, direct or contingent, nor entered into any material
transactions not in the ordinary course of business and there has not been
any material adverse change in their condition (financial or otherwise) or
results of operations nor any material adverse change in their capital
stock, short-term debt or long-term debt.
(p) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock
(except Common Stock issued pursuant to currently outstanding options,
warrants or convertible securities) for a period of 90 days after the
effective date of the Registration Statement without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. Notwithstanding the foregoing,
during such 90 day period the Company may (i) grant stock options pursuant
to the Company's existing stock option plan, (ii) issue shares of common
stock upon the conversion or exercise of options and warrants which are
outstanding as of the date hereof and (iii) register shares of common stock
underlying the Company's existing stock option plan.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required by the 1933 Act.
(r) The Company together with its subsidiaries owns and possesses
all right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
rights ("Trade Rights"), if any, which are material to the business of the
Company and its subsidiaries taken as a whole. Neither the Company nor any
of its subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to such material Trade
Rights which has not been resolved or disposed of and, to the knowledge of
the Company, neither the Company nor any of its subsidiaries has infringed,
misappropriated or otherwise conflicted with material Trade Rights of any
third parties, which infringement, misappropriation or conflict would have
a Material Adverse Effect.
-5-
(s) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not, singly or in the aggregate, have a Material
Adverse Effect.
(t) All sales of the Company's capital stock prior to the date
hereof were either (1) made pursuant to a registration statement filed by
the Company with the Commission under the 1933 Act or (2) at all relevant
times exempt from the registration requirements of the 1933 Act and in case
(1) and (2) duly registered with or the subject of an available exemption
from the registration requirements of the applicable state securities or
blue sky laws.
(u) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon other
than those (i) currently payable without penalty or interest or (ii) the
failure of which to pay would not have a Material Adverse Effect; and there
is no tax deficiency that has been asserted against the Company or any of
its properties or assets that would have a Material Adverse Effect.
(v) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the
Common is duly registered thereunder. The Share have been listed on the
Nasdaq National Market subject to notice of issuance of sale, as the case
may be.
(w) The Company is not an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended ("Investment Company
Act").
(x) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida).
Section 3. Representations, Warranties and Covenants of the Selling
Stockholders.
(a) Each Selling Stockholder severally, and not jointly, represents
and warrants to, and agrees with, the Company and the Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing Date
or the Second Closing Date, as the case may be, will have, valid
marketable title to the Shares proposed to be sold by such Selling
Stockholder hereunder on such date and full right, power and authority
to enter into this Agreement and the Pricing Agreement and to sell,
assign, transfer and deliver such Shares hereunder, free and clear of
all voting trust arrangements, liens, encumbrances, equities, claims
and community property rights; and upon delivery of and payment for
such Shares hereunder, the Underwriters will acquire valid marketable
title thereto, free and clear of any voting trust arrangement, lien,
encumbrance, equity, claim and community property right other than
imposed upon or consented to in writing by an Underwriter.
(ii) The making and performance by such Selling Stockholder of
this Agreement and the Pricing Agreement (A), if such Selling
Stockholder is not an individual, have been duly authorized by all
necessary action and (B), if such Selling Stockholder is not an
individual, will not violate any provision of such Selling
Stockholder's charter, bylaws, partnership agreement or trust
agreement, as the case may be and (C) will not result in the breach,
or be in contravention, of any provision of any trust agreement,
franchise, license, indenture, mortgage, deed of trust, or other
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or the property of such Selling Stockholder
may be bound or affected, or any order, rule or regulation applicable
to such Selling Stockholder of any court or regulatory body,
administrative agency or
-6-
other governmental body having jurisdiction over such Selling
Stockholder or any of such Selling Stockholder's properties, or any
order of any court or governmental agency or authority entered in any
proceeding to which such Selling Stockholder was or is now a party or
by which it is bound, and which would have a material adverse effect
on such Selling Stockholder's ability to perform its obligations under
this Agreement. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other government
body is required for the execution and delivery of this Agreement or
the Pricing Agreement or the consummation of the transactions
contemplated herein or therein, except for compliance with the 1933
Act and blue sky laws applicable to the public offering of the Shares
by the several Underwriters and clearance of such offering with the
NASD. This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder.
(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which might be
reasonably expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(iv) Such Selling Stockholder has executed and delivered a Power
of Attorney ("Power of Attorney") among the Selling Stockholder,
▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Agents"), naming the
Agents as such Selling Stockholder's attorneys-in-fact for the purpose
of entering into and carrying out this Agreement and the Pricing
Agreement on behalf of such Selling Stockholder, and the Power of
Attorney has been duly executed by such Selling Stockholder and a copy
thereof has been delivered to you.
(v) Such Selling Stockholder further represents, warrants and
agrees that such Selling Stockholder has deposited in custody, under a
Custody Agreement ("Custody Agreement") with ChaseMellon Shareholder
Services, L.L.C., as custodian ("Custodian"), certificates in
negotiable form for the Shares to be sold hereunder by such Selling
Stockholder, for the purpose of further delivery pursuant to this
Agreement. Such Selling Stockholder agrees that the Shares to be sold
by such Selling Stockholder on deposit with the Custodian are subject
to the interests of the Company, the Underwriters and the other
Selling Stockholders, that the arrangements made for such custody, and
the appointment of the Agents pursuant to the Power of Attorney, are
to that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder and under the Power of Attorney and the Custody
Agreement shall not be terminated except as provided in this
Agreement, the Power of Attorney or the Custody Agreement by any act
of such Selling Stockholder, by operation of law, whether, in the case
of an individual Selling Stockholder, by the death or incapacity of
such Selling Stockholder or, in the case of a trust or estate, by the
death of the trustee or trustees or the executor or executors or the
termination of such trust or estate, or, in the case of a partnership
or corporation, by the dissolution, winding-up or other event
affecting the legal life of such entity, or by the occurrence of any
other event. If any individual Selling Stockholder, trustee or
executor should die or become incapacitated, or any such trust,
estate, partnership or corporation should be terminated, or if any
other event should occur before the delivery of the Shares hereunder,
the documents evidencing Shares then on deposit with the Custodian
shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity, termination
or other event had not occurred, regardless of whether or not the
Custodian shall have received notice thereof. Each Agent has been
authorized by such Selling Stockholder to execute and deliver this
Agreement and the Pricing Agreement and the Custodian has been
authorized to receive and acknowledge receipt of the proceeds of sale
of the Shares to be sold by such Selling Stockholder against delivery
thereof and otherwise act on behalf of such Selling Stockholder. The
Custody
-7-
Agreement has been duly executed by such Selling Stockholder and a
copy thereof has been delivered to you.
(vi) As to each Selling Stockholder named in Schedule B hereto
as a Principal Selling Stockholder (collectively, the "Principal
Selling Stockholders") each preliminary prospectus, insofar as it has
related to such Principal Selling Stockholder and, to the knowledge of
such Principal Selling Stockholder in all other respects, as of its
date, has conformed in all material respects with the requirements of
the 1933 Act and, as of its date, has not included any untrue
statement of a material fact or omitted 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; and with
respect to the Registration Statement at the time of effectiveness,
and at all times subsequent thereto, up to the First Closing Date or
the Second Closing Date hereinafter defined, as the case may be, (1)
such parts of the Registration Statement and the Prospectus and any
amendments or supplements thereto as relate to such Principal Selling
Stockholder, and the Registration Statement and the Prospectus and any
amendments or supplements thereto, to the knowledge of such Principal
Selling Stockholder in all other respects, contained or will contain
all statements that are required to be stated therein in accordance
with the 1933 Act and in all material respects conformed or will in
all material respects conform to the requirements of the 1933 Act, and
(2) neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as it relates to such Principal
Selling Stockholder, and, to the knowledge of such Principal Selling
Stockholder in all other respects, included or will include any untrue
statement of a material fact or omitted or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that neither clause (1)
nor (2) shall have any effect if information has been given by such
Selling Stockholder to the Company and the Representatives in writing
which would eliminate or remedy any such untrue statement or omission.
(vii) As to each Selling Stockholder that is not a Principal
Selling Stockholder (collectively, the "Non-Principal Selling
Stockholders"), each preliminary prospectus, solely with respect to
information provided in writing by such Non-Principal Selling
Stockholder for inclusion therein as of its date, has not included any
untrue statement of a material fact or omitted 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; and with
respect to the Registration Statement at the time of effectiveness,
and at all times subsequent thereto, up to the First Closing Date or
the Second Closing Date, as the case may be, neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
solely with respect to information provided in writing by such Non-
Principal Selling Stockholder for inclusion therein, included or will
include any untrue statement of a material fact or omitted or will
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
provided that the foregoing clause shall not have any effect if
information has been given by such Non-Principal Selling Stockholder
to the Company and the Representatives in writing which would
eliminate or remedy any such untrue statement or omission. It is
agreed that the only information provided with respect to each Non-
Principal Selling Stockholder is such information as set forth in the
Prospectus under the caption "Principal and Selling Stockholders"
which specifically relates to such Non-Principal Selling Stockholder.
(b) Each Selling Stockholder agrees with the Company and the
Underwriters not to sell, contract to sell or otherwise dispose of any Common
Stock for a period of 90 days after this Agreement becomes effective without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
-8-
In order to document the Underwriter's compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or on the First Closing Date, as
hereinafter defined, a properly completed and executed United States Treasury
Department Form W-8 or W-9 (or other applicable form of statement specified by
Treasury Department regulations in lieu thereof).
Section 4. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company and the Selling Stockholders that the information set forth (a) on
the cover page of the Prospectus with respect to price, underwriting discount
and terms of the offering and (b) under "Underwriting" in the Prospectus and (c)
on the inside front cover of the Prospectus with respect to the stabilization
legend was furnished to the Company by and on behalf of the Underwriters for use
in connection with the preparation of the Registration Statement and is correct
and complete in all material respects. The Company and the Selling Stockholders
hereby acknowledge and agree that the information described in this Section 4
was the only written information furnished to the Company by or on behalf of any
Underwriters through the Representatives for use in the preparation of the
Registration Statement and Prospectus.
Section 5. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders,
severally and not jointly, agree to sell to the Underwriters named in Schedule A
hereto, and the Underwriters agree, severally and not jointly, to purchase from
the Company and the Selling Stockholders, respectively, 3,000,000 Firm Shares
from the Company and the respective number of Firm Shares set forth opposite the
names of the Selling Stockholders in Schedule B hereto at the price per share
set forth in the Pricing Agreement. The obligation of each Underwriter to the
Company shall be to purchase from the Company that number of full shares which
(as nearly as practicable, as determined by you) bears to 3,000,000 the same
proportion as the number of Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to the total number of Firm Shares to be
purchased by all Underwriters under this Agreement. The obligation of each
Underwriter to each Selling Stockholder shall be to purchase from such Selling
Stockholder the number of full shares which (as nearly as practicable, as
determined by you) bears to that number of Firm Shares set forth opposite the
name of such Selling Stockholder in Schedule B hereto, the same proportion as
the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased by all
Underwriters under this Agreement. The initial public offering price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required under
Rule 15c6-1 under the Exchange Act or unless postponed in accordance with the
provisions of Section 12) following the date the Registration Statement becomes
effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company and the Custodian will deliver to you at the offices of
counsel for the Underwriters 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 the Company and for the benefit of the Selling
Stockholders, respectively, against payment of the purchase price therefor by
delivery of federal or other immediately available funds, by wire transfer or
otherwise, to the Company and the Custodian. Such time of delivery and payment
is herein referred to as the "First Closing Date." The certificates for the Firm
Shares so to be delivered will be in such denominations and registered in such
names as you request by notice to the Company and the Custodian prior to 10:00
A.M., Chicago Time, on the second business day preceding the First Closing Date,
and will be made available at the Company's expense for checking and packaging
by the Representatives at 10:00 A.M., Chicago Time, on the business day
preceding the First Closing Date. Payment for the Firm Shares so to be delivered
shall be made at the time and in the manner described above at the offices of
counsel for the Underwriters.
-9-
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
certain of the Selling Stockholders designated on Schedule B to be offering
Option Shares hereby grant an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 600,000 Option Shares, at the
same 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
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company and the Agents setting
forth the aggregate number of Option Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates for
such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "Second Closing
Date," shall be determined by you, but if at any time other than the First
Closing Date, shall not be earlier than three nor later than 10 full business
days after delivery of such notice of exercise. The number of Option Shares to
be purchased from each such Selling Stockholder are set forth in Schedule B
hereto. The number of Option Shares to be purchased by each Underwriter shall be
determined by multiplying the number of Option Shares to be sold by the Selling
Stockholders pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Firm Shares to be purchased by such Underwriter as set
forth opposite its name in Schedule A and the denominator of which is the total
number of Firm Shares (subject to such adjustments to eliminate any fractional
share purchases as you in your absolute discretion may make). Certificates for
the Option Shares will be made available at the Company's expense for checking
and packaging at 10:00 A.M., Chicago Time, on the business day preceding the
Second Closing Date. The manner of payment for and delivery of the Option Shares
shall be the same as for the Firm Shares as specified in the preceding
paragraph.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Shares, to make payment
and to receipt therefor. You, individually and not as the Representatives of the
Underwriters, may make payment for any Shares to be purchased by any Underwriter
whose funds shall not have been received by you 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
hereunder.
Section 6. Covenants of the Company. The Company covenants and
agrees that:
(a) The Company will advise you and the Selling Stockholders
promptly of its notice of the issuance by the 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 to
it 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 you and the Selling Stockholders 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.
(b) The Company will give you and the Selling Stockholders notice of
its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any Rule 462(b)
Registration Statement or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file at the Commission at the time the Registration
Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) and any term
sheet as contemplated by Rule 434) and will furnish you and the Selling
Stockholders with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object on a timely basis.
-10-
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary in order 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 amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Shares which differs
from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) Without the prior written consent of the Representatives,
neither the Company nor any of its subsidiaries will, prior to the earlier
of the Second Closing Date or termination or expiration of the related
option, incur any material liability or obligation, direct or contingent,
or enter into any material transaction, other than in the ordinary course
of business, except as contemplated by the Prospectus.
(f) Except for repurchase by the Company of its capital stock from
employees whose employment may terminate, neither the Company nor any of
its subsidiaries will acquire any capital stock of the Company prior to the
earlier of the Second Closing Date or termination or expiration of the
related option nor will the Company declare or pay any dividend or make any
other distribution upon the Common Stock payable to stockholders of record
on a date prior to the earlier of the Second Closing Date or termination or
expiration of the related option, except in either case as contemplated by
the Prospectus.
(g) The Company will make generally available to its security
holders as soon as reasonably practicable, and in any event not later than
August 15, 1998, a consolidated earnings statement (which need not be
audited) covering a period of at least 12 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 1933 Act and Rule
158.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus and all
amendments and supplements to any such documents in each case
-11-
as soon as available and in such quantities as you may reasonably request,
for the purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying
or registering the Shares for sale under the blue sky laws of such
jurisdictions as you reasonably designate, and will continue such
qualifications in effect so long as reasonably required for 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 currently qualified or where it would
be subject to taxation as a foreign corporation.
(j) The Company will use the net proceeds received by it from the
sale of the Shares being sold by it in the manner specified in the
Prospectus in all material respects.
(k) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then following the execution of the Pricing
Agreement, the Company will prepare, and file or transmit for filing with
the Commission in accordance with such Rule 430A, Rule 424(b) and/or Rule
434, copies of an amended prospectus, or, if required by such Rule 430A
and/or Rule 434, a post-effective amendment to the Registration Statement
(including an amended prospectus), containing all information so omitted.
If required, the Company will prepare and file, or transmit for filing, a
Rule 462(b) Registration Statement not later than the date of the execution
of the Pricing Agreement. If a Rule 462(b) Registration Statement is filed,
the Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule 111.
(l) The Company will comply with all applicable registration, filing
and reporting requirements of the Exchange Act and the Nasdaq National
Market.
Section 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (other than legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution 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 Pricing Agreement and the Blue Sky Memorandum, (ii) all costs,
fees and expenses (including reasonable legal fees not to exceed $18,000)
incurred by the Underwriters in connection with qualifying or registering all or
any part of the Shares for offer and sale under blue sky laws and under the laws
of certain Provinces of Canada, including the preparation of a blue sky
memorandum relating to the Shares, the attainment of NASD clearance for offering
of the Shares, and the payment of any NASD filing fee; and (iii) all fees and
expenses of the Company's transfer agent, printing of the certificates for the
Shares and all transfer taxes, if any, with respect to the sale and delivery of
the Shares to the several Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Stockholders may make for the allocation or sharing of
such expenses and costs.
Section 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Stockholders herein set forth as of the date hereof
and as of the First Closing Date or
-12-
the Second Closing Date, as the case may be, to the accuracy of the statements
contained in the certificate of the Company delivered pursuant to the provisions
hereof, to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., Chicago Time, on the third full business day
following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company, the Selling Stockholders or you, shall
be contemplated by the Commission. If the Company has elected to rely upon
Rule 430A and/or Rule 434, the information concerning the initial public
offering price of the Shares and price-related information shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the
prescribed period and the Company will provide evidence satisfactory to the
Representatives of such timely filing (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rules 430A and 424(b)). If a Rule
462(b) Registration Statement is required, such Registration Statement
shall have been transmitted to the Commission for filing and become
effective within the prescribed time period and, prior to the First Closing
Date, the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representatives.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the reasonable opinion of
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or necessary in order to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any material adverse change, or any material
adverse development involving a prospective material adverse change, in or
affecting particularly the business or properties of the Company or its
subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, which, in the reasonable judgment of the
Representatives, makes it impractical or inadvisable to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representatives of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
-13-
(i) An opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) the Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of
Delaware with corporate power and authority to own its properties
and conduct its business as described in the Registration
Statement and Prospectus; and, based solely on certificates from
public officials, counsel shall confirm that the Company is
qualified to do business in each state set forth in Schedule I to
such opinion;
(2) an opinion to the same general effect as clause (1) of
this subparagraph (i) in respect of RSC Holdings Inc., RSC
Acquisition Corp., Acme ▇▇▇▇▇ Inc., Acme ▇▇▇▇▇ Inc. and Acme
Rents, Inc., the direct and indirect Delaware and California
subsidiaries of the Company (collectively, the "Identified
Subsidiaries" and each an "Identified Subsidiary");
(3) the issued and outstanding shares of capital stock of
each Identified Subsidiary are as set forth in Schedule II to
such opinion (the "Subsidiary Shares"). The Subsidiary Shares
have been duly authorized, validly issued and are fully paid and
nonassessable. Except as disclosed in the Registration Statement
(including contracts filed as exhibits to the Registration
Statement), the Company owns of record directly or indirectly all
of the Subsidiary Shares and all of the outstanding shares of
capital stock of each of Acme Alabama, Inc., The Air & Pump
Company, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ Equipment, Inc. (collectively with
the Identified Subsidiaries, the "Subsidiaries"), and to the
knowledge of such counsel, owns such stock of the Subsidiaries
free and clear of any adverse claim (as defined in Section 8-302
of the Uniform Commercial Code);
(4) the authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, 500,000 shares of preferred
stock, par value $0.01 per share, and 350,000 shares of
redeemable preferred stock, par value $0.01 per share, of which,
based solely upon a review of a certificate of the transfer agent
and registrar of the Company and upon issuance, delivery and
payment by you and the other Underwriters for shares of Common
Stock to be issued pursuant to and in accordance with the terms
of the Underwriting Agreement and the Pricing Agreement, ________
shares of Common Stock are outstanding as of the date hereof (the
"Capital Stock"); and such Capital Stock conforms as to legal
matters in all material respects to the description thereof in
the Prospectus under the caption "Description of Capital Stock";
(5) the Capital Stock (including the Shares), upon issuance,
delivery and payment by you and the other Underwriters for the
Shares to be issued pursuant to and in accordance with the terms
of the Underwriting Agreement and the Pricing Agreement, has been
duly authorized and validly issued and is fully paid and
nonassessable;
(6) the form of certificates for the Shares to be delivered
hereunder are in due and proper form under the Delaware General
Corporation Law (the "DGCL");
(7) the Registration Statement has become effective under
the 1933 Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the
-14-
Registration Statement has been issued under the 1933 Act and no
proceedings therefor have been initiated by the Commission.
(8) the Registration Statement and the Prospectus comply as
to form in all material respects with the requirements for
registration statements on Form S-1 under the 1933 Act; it being
understood, however, that such counsel need express no opinion
with respect to the financial statements, the notes thereto, and
the related schedules and other financial, numerical, statistical
or accounting data included in the Registration Statement or the
Prospectus; and to such counsel's knowledge there are no leases,
contracts or documents of a character required to be described in
the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed, as required. In passing upon the compliance as to form of
the Registration Statement and the Prospectus, such counsel may
assume that the statements made therein are correct and complete;
(9) the statements under the captions "Management - Stock
Option Plan," "Certain Relationships and Related Transactions,"
"Description of Capital Stock" and "Shares Eligible for Future
Sale" in the Prospectus, insofar as such statements constitute a
summary of the terms of the Company's capital stock, legal
matters or documents referred to therein, are accurate in all
material respects;
(10) this Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company; and to such
counsel's knowledge, no consent, approval, authorization or order
of, or filing with, any federal or Illinois or Delaware court or
governmental agency or body is required for the consummation of
the issuance and sale of the Shares by the Company pursuant to
this Agreement and the Pricing Agreement, except such as have
been obtained under the federal securities laws and such as may
be required under state securities laws in connection with the
purchase and distribution of such Shares by the Underwriters; and
(11) the execution of this Agreement and the issuance of the
Shares by the Company pursuant to this Agreement will not result
in a breach of or a default under, any agreement, franchise,
license, indenture, mortgage, deed of trust, or other instrument
of the Company or any of its subsidiaries or by which the
property of any of them is bound which is filed as an exhibit to
the Registration Statement; or violate any of the provisions of
the Company's Amended and Restated Certificate of Incorporation
or Bylaws or the DGCL or any federal or Illinois statute, rule or
regulation known to such counsel to be applicable to the Company
(other than federal securities laws).
In rendering such opinion, such counsel may state that they are
relying upon the certificate of the transfer agent for the Common Stock, as
to the number of shares of Common Stock at any time or times outstanding.
Such counsel may also rely upon the opinions of other competent counsel
and, as to factual matters, on certificates of the Selling Stockholders and
of officers of the Company and of state officials, in which case their
opinion is to state that they are so doing and copies of said opinions or
certificates are to be attached to the opinion unless said opinions or
certificates (or, in the case of certificates, the information therein)
have been furnished to the Representatives in other form.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
-15-
and representatives of the Underwriters, at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel need not pass upon, and need not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (other than as
expressly set forth above in paragraphs 4 and 9) and need not make any
independent check or verification thereof, during the course of such
participation (relying as to materiality to a large extent upon the statements
of officers and other representatives of the Company), no facts have come to
such counsel's attention that causes such counsel to believe either the
Registration Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b)
and/or Rule 434, if applicable) at the time it became effective contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, as amended or supplemented, if applicable, as of its
date and as of the First Closing Date or the Second Closing Date, as the case
may be, contained any untrue statement of a material fact or omitted 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, it being understood
that such counsel need not express any belief with respect to the financial
statements, the notes thereto and the related schedules and other financial,
numerical, statistical or accounting data included in the Registration Statement
or Prospectus.
(ii) an opinion of counsel for each of the Selling Stockholders addressed
to the Underwriters and dated the First Closing Date or the Second Closing Date,
to the effect that;
(1) this Agreement and the Pricing Agreement, if such Selling
Stockholder is not an individual, have been duly authorized, executed and
delivered by or on behalf of each such Selling Stockholder, if such Selling
Stockholder is not an individual, the Agents and the Custodian for each
such Selling Stockholder have been duly and validly authorized to carry out
all transactions contemplated herein on behalf of each such Selling
Stockholder; and the performance of this Agreement and the Pricing
Agreement and the consummation of the transactions herein contemplated by
such Selling Stockholders will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute,
any indenture, mortgage, deed of trust, note agreement or other agreement
or instrument known to such counsel to which any of such Selling
Stockholders is a party or by which any are bound or to which any of the
property of such Selling Stockholders is subject, or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over any of such Selling Stockholders or any of
their properties; and no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of
the transactions contemplated by this Agreement and the Pricing Agreement
in connection with the sale of Shares to be sold by such Selling
Stockholders hereunder, except such as have been obtained under the 1933
Act and such as may be required under applicable blue sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters and the clearance of such offering with the NASD;
(2) each Selling Stockholder has full right, power and
authority to enter into this Agreement and the Pricing Agreement and
to sell, transfer and deliver the Shares to be sold on the First
Closing Date or the Second Closing Date, as the case may be, by such
Selling Stockholder hereunder and good and marketable title to such
Shares so sold, free and clear of all voting trust arrangements,
liens, encumbrances, equities, claims and community property rights
whatsoever, has been transferred to the Underwriters (who counsel may
assume to be bona fide purchasers) who have purchased such Shares
hereunder.
-16-
In addition, although such counsel need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
and need not make any independent check or verification thereof, during the
course of such participation (relying as to materiality to a large extent
upon the statements of officers and other representatives of the Company),
no facts have come to such counsel's attention that causes such counsel to
believe either the Registration Statement (including the information deemed
to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b) and/or Rule 434, if applicable) at the time it
became effective, insofar as it relates to such Selling Stockholder,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as amended or
supplemented, if applicable, as of its date and as of the First Closing
Date or the Second Closing Date, as the case may be, insofar as it relates
to such Selling Stockholder, contained any untrue statement of a material
fact or omitted 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.
(iii) Such opinion or opinions of Sidley & Austin, counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as
the case may be, with respect to the incorporation of the Company, the
validity of the Shares to be sold by the Company, the Registration
Statement and the Prospectus and other related matters as you 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.
(iv) A certificate of the Company executed on its behalf by the
chief executive officer and the principal financial officer of the Company,
dated the First Closing Date or the Second Closing Date, as the case may
be, to the effect that:
(1) the representations and warranties of the Company set forth
in Section 2 of this Agreement are true and correct as of the date of
this Agreement and as of the First Closing Date or the Second Closing
Date, as the case may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such date; and
(2) to the best knowledge of the respective signers, the
Commission has not issued an order preventing or suspending the use of
the Prospectus or any preliminary prospectus filed as a part of the
Registration Statement or any amendment thereto; no stop order
suspending the effectiveness of the Registration Statement has been
issued; and no proceedings for that purpose have been instituted or
are pending or contemplated under the 1933 Act.
The delivery of the certificate provided for in this subparagraph shall be
and constitute a representation and warranty of the Company as to the facts
required in the immediately foregoing clauses (1) and (2) of this subparagraph
to be set forth in said certificate.
(v) A certificate of each Selling Stockholder dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect that the
representations and warranties of such Selling Stockholder set forth in
Section 3 of this Agreement are true and correct as of such date and such
Selling Stockholder has complied with all the agreements and satisfied all
the conditions on the part of such Selling Stockholder to be performed or
satisfied at or prior to such date.
(vi) At the time the Pricing Agreement is executed and also on the
First Closing Date or the Second Closing Date, as the case may be, there
shall be delivered to you a letter addressed to you, as
-17-
Representatives of the Underwriters, from Ernst & Young LLP, independent
accountants, the first one to be dated the date of the Pricing Agreement,
the second one to be dated the First Closing Date and the third one (in the
event of a second closing) to be dated the Second Closing Date, to the
effect set forth in Schedule C. There shall not have been any material
adverse change specified in the letters referred to in this subparagraph
which makes it impractical or inadvisable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase of the
Shares as contemplated hereby.
(vii) Such further certificates and documents as you may reasonably
request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Sidley & Austin, counsel for the Underwriters, which approval
shall not be unreasonably withheld. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company and the Selling
Stockholders without liability on the part of any Underwriter or the Company or
any Selling Stockholder, except for the expenses to be paid or reimbursed by the
Company pursuant to Sections 7 and 9 hereof and except to the extent provided in
Section 11 hereof.
Section 9. Reimbursement of Underwriters' Expenses. If the sale to
the Underwriters of the Shares on the First Closing Date is not consummated
because any condition of the Underwriters' obligations hereunder is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Stockholders to perform any agreement herein or to comply
with any provision hereof, unless such failure to satisfy such condition or to
comply with any provision hereof is due to the default or omission of any
Underwriter, the Company agrees to reimburse you and the other Underwriters upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by you and
them in connection with the proposed purchase and the sale of the Shares. Any
such termination shall be without liability of any party to any other party
except that the provisions of this Section, Section 7 and Section 11 shall at
all times be effective and shall apply.
Section 10. Effectiveness of Registration Statement. You, the
Company and the Selling Stockholders will use your, its and their best efforts
to cause the Registration Statement to become effective, if it has not yet
become effective, and to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
Section 11. Indemnification. (a) The Company and each Principal
Selling Stockholder, severally and not jointly agrees, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon 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 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;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that neither the Company
nor any Principal Selling Stockholder will be liable in any such case to the
extent that (i) any such loss,
-18-
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the 1933 Act; and further provided, that, without
limitation of the Company's obligations under this Agreement, no Principal
Selling Stockholder will be liable in any such case in respect of any such
losses, claims, damages, liabilities or expenses unless the Underwriter or
controlling person seeking indemnification from such Principal Selling
Stockholder shall have previously sought indemnification from the Company in
respect thereof and the Company shall have failed to honor and pay such
Underwriter's or controlling person's claim for indemnification within 30
calendar days of the date such indemnification is first sought against the
Company (except that the foregoing condition precedent requiring an Underwriter
or a controlling person to so seek indemnification from the Company shall not be
applicable if an Underwriter or controlling person has previously sought
indemnification from the Company with respect to such matters or if such
Underwriter or controlling person is prohibited from being indemnified by the
Company (or from seeking such indemnification) by the effect of any order,
decree, stay, injunction, statute, legal process or other matter of law and
except that the foregoing condition precedent shall not limit the right of an
Underwriter or controlling person at any time to notify a Principal Stockholder
of a claim for indemnification or otherwise initiate a claim or proceeding
against a Principal Selling Stockholder for indemnification prior to the
expiration of such 30 calendar days, but only, in the case of such initiation of
a claim or proceeding, if, and solely to the extent, necessary to prevent any
applicable statute of limitations from expiring). In addition to their other
obligations under this Section 11(a), the Company and each Principal Selling
Stockholder agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 11(a), they will reimburse the Underwriters on a monthly basis for
all reasonable legal and other expenses of one counsel incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's and each Principal Selling
Stockholder's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in addition to
any liability which the Company and the Principal Selling Stockholders may
otherwise have.
Each Selling Stockholder who is a Non-Principal Selling Stockholder,
severally and not jointly agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of the
1933 Act or the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the 1933 Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise (including in settlement
of any litigation if such settlement is effected with the written consent of the
Company), to the same extent as the foregoing indemnity to each Underwriter set
forth in the immediately preceding paragraph, but only with reference to
information provided in writing by such Non-Principal Selling Stockholder to the
Company specifically for use in the preparation of the documents referred to in
the preceding paragraph.
Without limiting the full extent of the Company's agreement to indemnify
each Underwriter, as herein provided, each Selling Stockholder shall be liable
under the indemnity agreements contained in this Section 11(a) only for an
amount not exceeding the proceeds received by such Selling Stockholder from the
sale of Shares hereunder.
-19-
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each Selling Stockholder and each person, if any, who controls
the Company within the meaning of the 1933 Act or the Exchange Act, against any
losses, claims, damages or liabilities to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject
under the 1933 Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based 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 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto in reliance
upon and in conformity with Section 4 of this Agreement or any other written
information furnished to the Company by such Underwriter through the
Representatives specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or any
such director, officer, Selling Stockholder or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to their other obligations under this Section 11(b), the
Underwriters agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 11(b), they will reimburse the Company and the Selling Stockholders
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company and the Selling Stockholders
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which the Underwriters may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, 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 of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
counsel, approved by the Representatives in the case of paragraph (a)
representing all Underwriters and related persons that are indemnified parties,
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying
-20-
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding 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 includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders 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 Stockholders and the Underwriters in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company, the Selling Stockholders
and the Underwriters shall be deemed to be in the same proportion in the case of
the Company and the Selling Stockholders, as the total price paid to the Company
and the Selling Stockholders for the Shares by the Underwriters (net of
underwriting discount but before deducting expenses), and in the case of the
Underwriters as the underwriting discount received by them bears to the total of
such amounts paid to the Company and the Selling Stockholders and received by
the Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Selling Stockholders 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 to state a material fact relates to information supplied by the Company
or by the Selling Stockholders or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section,
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the ▇▇▇▇ ▇▇▇) 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.
(e) The provisions of this Section shall survive any termination of this
Agreement.
Section 12. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company and the Selling Stockholders to sell and
deliver the Shares hereunder, and of each Underwriter to purchase the Shares
hereunder, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all 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 the First Closing Date and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10 percent of the total number of
Shares which the Underwriters are obligated to purchase on the First Closing
Date, the
-21-
Representatives may make arrangements satisfactory to the Company and the
Selling Stockholders for the purchase of such Shares by other persons, including
any of the Underwriters, but if no such arrangements are made by such 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 date. If any Underwriter or
Underwriters so default and the aggregate number of Shares with respect to which
such default or defaults occur is more than the above percentage and
arrangements satisfactory to the Representatives and the Company and the Selling
Stockholders for the purchase of such Shares by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company or the
Selling Stockholders, except for the expenses to be paid by the Company pursuant
to Section 7 hereof and except to the extent provided in Section 11 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 or the Company shall have the right to postpone the First
Closing Date 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.
Section 13. Effective Date. This Agreement shall become effective
immediately as to Sections 7, 9, 11 and 14 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company and the Selling Stockholders or by release of any Shares
for sale to the public. For the purposes of this Section, the Shares shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
telegrams (i) advising Underwriters that the Shares are released for public
offering, or (ii) offering the Shares for sale to securities dealers, whichever
may occur first.
Section 14. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
and the Selling Stockholders or by you by notice to the Company and the
Selling Stockholders at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall
be without liability on the part of the Company, or the Selling
Stockholders to any Underwriter (except for the expenses to be paid or
reimbursed pursuant to Section 7 hereof and except to the extent provided
in Section 11 hereof) or of any Underwriter to the Company, or the Selling
Stockholders.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 5, if exercised, may be
canceled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any change in
financial markets or in political, economic or financial conditions which,
in the opinion of the Representatives, materially and adversely affects the
market for the Shares, or (iv) there shall have been an outbreak of major
armed hostilities between the United States and any foreign power which in
the reasonable opinion of the Representatives makes it impractical or
inadvisable to offer or sell the Shares. Any termination pursuant to this
paragraph (b) shall be without liability on the part of any Underwriter to
the Company or the Selling Stockholders or on the part of the Company to
any Underwriter or the
-22-
Selling Stockholders (except for expenses to be paid or reimbursed pursuant
to Section 7 hereof and except to the extent provided in Section 11
hereof).
Section 15. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of the Selling Stockholders 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 or the Company or any of its or their partners, principals, members,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Shares sold
hereunder.
Section 16. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Sidley & Austin, One First National
Plaza, Chicago, Illinois, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.; if sent to the Company
will be mailed, delivered or telegraphed and confirmed to the Company at its
corporate headquarters with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq.; and if sent to the Selling Stockholders will be mailed, delivered or
telegraphed and confirmed to the Agents and the Custodian at such address as
they have previously furnished to the Company and the Representatives, with a
copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Section 17. Successors. This Agreement and the Pricing 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 11,
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 18. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters and as such may be relied upon by the Company.
Section 19. Partial Unenforceability. If any section, paragraph 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 or provision hereof.
Section 20. Counterparts. This Agreement may be executed in one or
more counterparts, and all counterparts so executed shall constitute one
agreement.
Section 21. Applicable Law. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
* * * *
-23-
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 Stockholders and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
RENTAL SERVICE CORPORATION
By
--------------------------------------
Chief Executive Officer
By:
--------------------------------------
Attorney-in-Fact
By:
--------------------------------------
Attorney-in-Fact
[Underwriting Agreement Signature Page]
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
Acting as Representatives of the
several Underwriters named in
Schedule A
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
------------------------------
Principal
-24-
[Underwriting Agreement Signature Page]
SCHEDULE A
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation..............
Total 4,000,000
=========
SCHEDULE B
Number of Number of
Firm Shares Option Shares
to be Sold to be Sold
---------- ----------
Company 3,000,000 0
Principal Selling Stockholders:
------------------------------
Non-Principal Selling Stockholders:
----------------------------------
Total 4,000,000 600,000
========= =======
SCHEDULE C
Comfort Letter of Ernst & Young LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and schedules
of the Company and its subsidiaries included in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1995, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since December 31, 1995, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and its subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or that such unaudited financial statements are not
fairly presented in accordance with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement, (ii) the unaudited pro forma
financial statements included in the Registration Statement do not comply in
form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such statements
and (iii) at a specified date not more than five days prior to the date thereof
in the case of the first letter and not more than two business days prior to the
date thereof in the case of the second and third letters, there was any change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries on a consolidated basis or any
decrease in consolidated total assets or consolidated stockholders' equity as
compared with amounts shown on the latest unaudited balance sheet of the Company
included in the Registration Statement or for the period from the date of such
balance sheet to a date not more than five days prior to the date thereof in the
case of the first letter and not more than two business days prior to the date
thereof in the case of the second and third letters, there were any decreases,
as compared with the corresponding period of the prior year, in equipment
rentals or sales of parts, supplies and equipment, consolidated operating income
or in the total or per share amounts of consolidated net income except, in all
instances, for changes or decreases which the Prospectus discloses have occurred
or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed to
by the Representatives, with respect to certain information in the Prospectus
specified by the Representatives, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and its subsidiaries.
Exhibit A
RENTAL SERVICE CORPORATION
4,000,000 Shares Common Stock/2/
PRICING AGREEMENT
_____________, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
As Representatives of the Several
Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ___________, 1997
(the "Underwriting Agreement") relating to the sale by the Company and the
Selling Stockholders and the purchase by the several Underwriters for whom
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇▇▇ Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation are acting as representatives (the
"Representatives"), of the above Shares. All terms herein shall have the
definitions contained in the Underwriting Agreement except as otherwise defined
herein.
Pursuant to Section 5 of the Underwriting Agreement, the Company and each
of the Selling Stockholders agree with the Representatives as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $_____________, being an amount equal to the initial
public offering price set forth above less $____________ per share.
------------------
/2/ Plus an option to acquire up to 600,000 additional shares to cover over
allotments
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 Stockholders and the
several Underwriters, including you, all in accordance with its terms.
Very truly yours,
RENTAL SERVICE CORPORATION
By
----------------------------
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Acting as Representatives of the
Several Underwriters
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By
--------------------------
Principal
[Pricing Agreement Signature Page]
