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EXHIBIT 1.1
K&S DRAFT
11/06/96
DRAFT #2
[FORM OF UNDERWRITING AGREEMENT]
▇▇▇▇▇▇▇ FURNITURE COMPANY, INC.
COMMON STOCK
($ .02 PAR VALUE)
UNDERWRITING AGREEMENT
NOVEMBER __, 1996
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UNDERWRITING AGREEMENT
November __, 1996
▇▇▇▇▇▇, Read & Co. Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
Wheat, First Securities, Inc.
c/▇ ▇▇▇▇▇▇, Read & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as representatives
(the "REPRESENTATIVES")
of the several underwriters
listed on Schedule A hereto
Ladies and Gentlemen:
Each of the parties listed on Schedule B hereto (the "SELLING
STOCKHOLDERS"), severally propose to sell to the several underwriters named in
Schedule A (the "UNDERWRITERS") an aggregate of ___________ shares (the "FIRM
SHARES") of Common Stock, par value $.02 per share (the "COMMON STOCK"), of
▇▇▇▇▇▇▇ Furniture Company, Inc. (the "COMPANY"). In addition, solely for the
purpose of covering over-allotments, if any, the Selling Stockholders severally
propose to sell to the Underwriters, at the Underwriters' option, an aggregate
of up to ________ additional shares of Common Stock (the "ADDITIONAL SHARES").
The Additional Shares and the Firm Shares are collectively referred to herein
as the "SHARES". The Shares are described in the Prospectus that is referred
to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "ACT"), with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3, including a prospectus,
relating to the Shares, which incorporates by reference documents which the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "EXCHANGE ACT"). The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses and the documents incorporated by reference therein
(each thereof, including the documents incorporated therein by reference, being
herein called a "PRELIMINARY PROSPECTUS"). Except where the context otherwise
requires, the registration statement as in effect at the time of execution of
this Agreement or, if the registration statement is not yet effective, as
amended when it becomes effective, including all documents filed as a part
thereof or incorporated
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by reference therein, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) or Rule 434(c)
under the Act and deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Act and any "abbreviated term
sheet" described in Rule 434(c) under the Act that is deemed to be a part of
such registration statement pursuant to Rule 434(d) under the Act (a "TERM
SHEET"), is herein called the "REGISTRATION STATEMENT", and the prospectus,
including all documents incorporated therein by reference, any Term Sheet that,
in addition to the related preliminary prospectus, constitutes a part thereof
pursuant to Rule 434(a) under the Act and any prospectus required pursuant to
Rule 434(c)(2) of the Act (the "INTEGRATED PROSPECTUS"), each in the form filed
by the Company with the Commission pursuant to Rule 424(b) under the Act or, if
none of such filings is required, in the form of final prospectus included in
the Registration Statement at the time it became effective, is herein called
the "PROSPECTUS". Any reference herein to the "date" of a Prospectus that
includes a Term Sheet shall mean the date of such Term Sheet.
The Selling Stockholders and the Underwriters agree as follows:
1. SALE AND PURCHASE. On the basis of the representations and
warranties and the other terms and conditions herein set forth, the Selling
Stockholders severally agree to sell to the respective Underwriters and each of
the Underwriters, severally and not jointly, agrees to purchase from each
Selling Stockholder the respective number of Firm Shares (subject to such
adjustment as you may determine to avoid fractional shares) which bears the
same proportion to the total number of Firm Shares to be sold by the Selling
Stockholders as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A bears to the number of Firm Shares to be sold by the
Selling Stockholders , at a purchase price of $_____________ per Share. You
may release the Firm Shares for public sale promptly after this Agreement
becomes effective. You may, from time to time, increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, on the basis of the representations and warranties and
the other terms and conditions herein set forth, each of the Selling
Stockholders, severally and not jointly, grants to the several Underwriters an
option to purchase, and the Underwriters shall have the right to purchase,
severally and not jointly, from the Selling Stockholders all or a portion of
the Additional Shares set forth opposite the name of such Selling Stockholder
on Schedule B as may be necessary to cover over allotments made in connection
with the offering of the Shares, at the same purchase price per share to be
paid by the several Underwriters to the Selling Stockholders for the Firm
Shares. This option may be exercised at any time (but not more than once) on
or before the thirtieth day following the date hereof, by written notice to the
Company and the Representatives of the Selling Stockholders referred to in the
immediately succeeding paragraph. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised and the
date and time when the Additional Shares are to be delivered (such date and
time being herein referred to as the "additional time of purchase"); provided,
however, that the additional time of purchase shall not be earlier than the
time of purchase (as defined below) nor earlier than the
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second business day(1) after the date on which the option shall have been
exercised nor later than the eighth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be
purchased by each Underwriter shall be the number that bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A bears to the total number of Firm Shares (subject, in each case, to
such adjustment as you may determine to eliminate fractional shares). The
number of Additional Shares to be sold by each Selling Stockholder shall be the
number which bears the same proportion to the aggregate number of Additional
Shares being purchased as the number of Additional Shares set forth opposite
the name of such Selling Stockholder on Schedule B bears to the total number of
Additional Shares available for sale under the over-allotment option (subject,
in each case, to such adjustment as you may determine to eliminate fractional
shares).
Pursuant to powers of attorney, which shall be satisfactory to counsel
for the Underwriters, granted by each Selling Stockholder (the "POWERS OF
ATTORNEY"), ________________ and ________________ will act as representatives
of the Selling Stockholders. The foregoing representatives (the
"REPRESENTATIVES OF THE SELLING STOCKHOLDERS") are authorized, on behalf of
each Selling Stockholder, to execute any documents necessary or desirable in
connection with the sale of the Shares to be sold hereunder by each Selling
Stockholder, to make delivery of the certificates of such Shares, to receive
the proceeds of the sale of such Shares, to give receipts for such proceeds, to
pay therefrom the expenses to be borne by each Selling Stockholder in
connection with the sale and public offering of the Shares, to distribute the
balance of such proceeds to each Selling Stockholder in proportion to the
number of Shares sold by each Selling Stockholder, to receive notices on behalf
of each Selling Stockholder and to take such other action as may be necessary
or desirable in connection with the transactions contemplated by this
Agreement.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the
Firm Shares shall be made to the Selling Stockholders by certified or official
bank check, in New York Clearing House funds, at the office of ▇▇▇▇▇▇, Read &
Co. in New York City, against delivery of the Firm Shares for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
a.m., New York City time, on ____________, 1996 (unless another time shall be
agreed to by you, the Company and the Representatives of the Selling
Stockholders or unless postponed in accordance with the provisions of Section
10). The time at which such payment and delivery are actually made is called
the "time of purchase". The Firm Shares shall be delivered in such names and
in such denominations as you shall specify on the second business day preceding
the time of purchase. For the purpose of expediting the checking of the
certificates for the Firm Shares by you, the Selling Stockholders agree to make
such certificates available to you for such purpose at least one full business
day preceding the time of purchase.
----------------------------------
(1) As used herein, business day shall mean a day on which the New York
Stock Exchange is open for trading.
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Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. The Additional Shares shall be delivered in
such names and in such denominations as you shall specify on the second
business day preceding the additional time of purchase. For the purpose of
expediting the checking of the certificates for the Additional Shares by you,
the Selling Stockholders agree to make such certificates available to you for
such purpose at least one full business day preceding the additional time of
purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) each Preliminary Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, fully complied
when so filed in all material respects with the Act; when as the case
may be, the Registration Statement becomes or became effective and at
all times subsequent thereto up to the time of purchase and the
additional time of purchase, as the case may be, the Registration
Statement and the Prospectus, and any supplements or amendments
thereto, fully complied and will fully comply in all material respects
with the provisions of the Act; the documents incorporated by
reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Exchange Act; and the Registration Statement at all such times did
not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes any representation or
warranty with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters that was furnished in writing
by or on behalf of any Underwriter through you to the Company
expressly for use in the Registration Statement or the Prospectus and
set forth in the section of the Registration Statement and the
Prospectus entitled "Underwriting";
(b) the conditions for use of a registration statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions
contemplated by this Agreement and the Registration Statement;
(c) as of the date of this Agreement, the time of
purchase and the additional time of purchase the Company's authorized,
issued and outstanding capitalization is as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital
stock of the Company, including the Shares, have been duly authorized
and validly issued and are fully paid and
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nonassessable and free of any preemptive rights; the Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware with full power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and to
execute, deliver and perform this Agreement as contemplated hereby and
thereby; the Company does not own, directly or indirectly, any capital
stock or other equity securities of, or ownership interest in, any
corporation, partnership, joint venture or other association or entity
in excess of 1% of the capital stock or other equity securities or
ownership interests except for the ownership of Charter ▇▇▇▇▇▇▇
Foreign Sales Corporation, a wholly owned subsidiary of the Company;
(d) the Company and each of its subsidiaries (the
"SUBSIDIARIES") are duly qualified or licensed by, and are in good
standing in, each jurisdiction in which they own or lease property or
conduct their respective business except where the failure,
individually or in the aggregate, to be so qualified or licensed could
have a material adverse effect on the business, results of operations,
condition (financial or otherwise) or assets of the Company and its
Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"); and the
Company and each of its Subsidiaries are in compliance in all material
respects with all laws, orders, rules, regulations and directives
issued or administered by such jurisdictions;
(e) the Company owns all of the outstanding capital stock
of its Subsidiaries (other than Qualifying Shares) free and clear of
any pledge, lien, outstanding security interest, preemptive right or
other claim or interest, and there are no securities outstanding which
are convertible into, or exercisable or exchangeable for, shares of
capital stock of its Subsidiaries.
(f) neither the Company nor any of its Subsidiaries are
in violation of the provisions of its respective articles of
incorporation or bylaws or in breach of, or in default under (nor has
any event occurred that with notice, lapse of time or both would
constitute a breach of, or default under), any provision of any lease,
indenture, mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or their respective
properties is bound or to which any property is subject or under any
law, regulation or rule or any decree, judgment or order applicable to
the Company or any of its Subsidiaries, in each case, where the effect
of which could reasonably be expected to have a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby and thereby do not and will not violate any provision of the
articles of incorporation or bylaws of the Company or any of its
Subsidiaries and will not conflict with, or result in any breach of,
or constitute a default under (or constitute any event that with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of any license, lease, indenture, mortgage, deed
of trust, bank loan or credit agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by
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which any of them or their respective properties may be bound or to
which any property is subject, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of its Subsidiaries;
(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company enforceable in accordance with its respective terms,
subject to applicable laws of bankruptcy, insolvency, or similar laws
relating to creditors' rights generally and to general principles of
equity (whether applied in a proceeding in law or equity) and policy
considerations or court decisions which may limit the rights of any
party to obtain indemnification;
(h) the capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus and the
certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of
being such holders;
(i) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares as contemplated by
this Agreement other than registration of the Shares under the Act and
any necessary qualifications under the federal securities or blue sky
laws of the various jurisdictions in which the Shares are being
offered by the Underwriters;
(j) no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
securities of the Company as a result of the sale of the Shares to the
Underwriters hereunder (other than pursuant to the Registration Rights
Agreement as described in the Prospectus), nor does any person have
preemptive rights, rights of first refusal or other rights to purchase
any of the Shares;
(k) Coopers & ▇▇▇▇▇▇▇ L.L.P., whose reports on the
financial statements of the Company are filed with or incorporated by
reference in the Registration Statement and the Prospectus, are
independent public accountants with respect to the Company as required
by the Act;
(l) each of the Company and its Subsidiaries has all
necessary licenses, authorizations, consents and approvals, has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
authorizations, consents, licenses and approvals from other persons,
in order to conduct its respective business except where the failure
to have authorizations, consents, licenses and approvals would not
reasonably be expected to have a Material Adverse Effect; and neither
the Company nor any of its Subsidiaries is in violation of, or in
default under, any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company or any of
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its Subsidiaries, the effect of which could reasonably be expected to
have a Material Adverse Effect;
(m) all legal or governmental proceedings, contracts or
documents 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 have been so described or filed as required;
(n) there are no actions, suits or proceedings pending
or, to the best knowledge of the Company, threatened against the
Company or any of its Subsidiaries or any of their respective
properties at law or in equity or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency that if adversely determined, would result in a
judgment, decree or order having a Material Adverse Effect;
(o) the audited and unaudited financial statements
included and incorporated by reference in the Registration Statement
and the Prospectus present fairly the financial position of the
Company as of the dates indicated and the results of operations and
cash flows of the Company for the periods specified; and such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during
the periods involved;
(p) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may be otherwise stated in the Registration Statement or
the Prospectus, there has not been (i) any material adverse change in
the business, results of operations, condition (financial or
otherwise), assets or prospects of the Company and its Subsidiaries,
(ii) any transaction that is, or the Company reasonably expects could
be, material to the Company and its Subsidiaries, contemplated or
entered into, or approved by the Board of Directors of, by the Company
or any of its Subsidiaries or (iii) any obligation, contingent or
otherwise, directly or indirectly incurred by the Company or any of
its Subsidiaries that is, or the Company reasonably expects could be,
material to the Company and its Subsidiaries;
(q) the Company has obtained the agreement of each of its
directors and executive officers and certain of the Selling
Stockholders as set forth in Section 6 not to offer, pledge, sell,
contract to sell, grant any option to purchase, transfer or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
other securities convertible into or exercisable or exchangeable for
Common Stock or warrants or other rights to purchase Common Stock
without the prior written consent of ▇▇▇▇▇▇, Read & Co. Inc. for a
period of 120 days after the date of the final Prospectus, other than
(i) in the case of the Selling Stockholders, shares sold to the
Company pursuant to the Repurchase Agreement (as defined in the
Prospectus), (ii) in the case of the Company, stock options issued
pursuant to the Company's stock option plans in the existence of the
date of the Preliminary Prospectus or stock issued pursuant to the
Company's Executive Loan Plan (as defined in th Prospectus), and (iii)
in the case of executive officers of the Company other than ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, shares of Common Stock sold solely in connection with
cashless exercises of currently outstanding stock options held by such
executive officers;
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(r) the Company and each of its Subsidiaries have filed
all federal or state income or franchise income and franchise tax
returns required to be filed and have paid all taxes shown thereon as
due, and there is no material tax deficiency that has been or may
reasonably be asserted against the Company or any of the
Subsidiaries; and all known tax liabilities are adequately provided
for on the books of the Company and its Subsidiaries;
(s) the business, operations and facilities of the
Company and each of its Subsidiaries have been and are being
conducted in compliance in all material respects with all applicable
laws, ordinances, rules, regulations, licenses, permits, approvals,
plans, authorizations or requirements relating to occupational safety
and health, pollution, protection of health or the environment, or
reclamation (including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes,
whether solid, gaseous or liquid in nature) or otherwise relating to
remediating real property in which the Company has any interest,
whether owned or leased, of any governmental department, commission,
board, bureau, agency or instrumentality of the United States, any
state or political subdivision thereof or any foreign jurisdiction and
all applicable judicial or administrative agency or regulatory
decrees, awards, judgments and orders relating thereto (collectively
"ENVIRONMENTAL REGULATIONS") except such failures to comply as would
not in the aggregate have a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has received any notice from a
governmental instrumentality or any third party alleging any violation
of any Environmental Regulation or liability thereunder (including,
without limitation, liability for costs of investigating or
remediating sites containing hazardous substances or damages to
natural resources) where such violation or liability could reasonably
be expected to have a Material Adverse Effect; and
(t) the Company will not become as a result of the
transactions contemplated hereby, and does not intend to conduct
its business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and
after the transaction comtemplated hereby will not be a Company
"controlled" by an "investment company" with the meaning of such Act.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder severally (and not jointly) represents and warrants to
each Underwriter that:
(a) such Selling Stockholder is, and at the time of
delivery of the Shares to be sold by such Selling Stockholder will be,
the owner of the number of Shares to be sold by such Selling
Stockholder pursuant to this Agreement and has and, at the time of
delivery thereof, will have valid title to such Shares, and upon
delivery of and payment for such Shares the Underwriters will acquire
valid title to such Shares free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction
on transfer or other defect in title;
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(b) such Selling Stockholder has, and at the time of
delivery of such Shares will have, full legal right, power and
capacity, and any authorization or approval required by law (other
than those imposed by the Act and the securities or blue sky laws of
certain jurisdictions) to sell, assign, transfer and deliver such
Shares in the manner provided in this Agreement;
(c) this Agreement, the Powers of Attorney, and the
Custody Agreement among Continental Stock Transfer & Trust Company, as
custodian and the Selling Stockholders (the "CUSTODY AGREEMENT") have
been duly authorized, executed and delivered by such Selling
Stockholder and each is a legal, valid and binding agreement of such
Selling Stockholder enforceable in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general principles of
equity, whether considered in a proceeding in equity or at law, and
each of the Representatives of the Selling Stockholders, acting alone,
is authorized to execute and deliver this Agreement and the
certificate referred to in Section 8(k) hereof on behalf of such
Selling Stockholder, to determine the purchase price to be paid by the
several Underwriters to such Selling Stockholder as provided in
Section 1 hereof, to authorize the delivery of the Shares to be sold
by such Selling Stockholder under this Agreement and to duly endorse
(in blank or otherwise) the certificate or certificates representing
such Shares or a stock power or powers with respect thereto, to accept
payment therefor, and otherwise to act on behalf of such Selling
Stockholder in connection with this Agreement;
(d) the sale of the Shares by such Selling Stockholder
pursuant to this Agreement is not prompted by any information
concerning the Company which is not set forth in the Prospectus;
(e) the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby will
not conflict with, or result in any breach of or constitute a default
under (or constitute any event which with notice, lapse of time or
both would constitute a breach of, or default under), any provision of
the charter or bylaws or trust agreement (as the case may be), of such
Selling Stockholder or under any provision of any indenture, mortgage,
deed of trust, bank loan or credit agreement, or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of its properties may be bound or
affected or under any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to such Selling
Stockholder;
(f) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the sale of the Shares contemplated hereby, other than
registration of the Shares under the Act and any necessary
qualifications under the
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federal securities or "blue sky" laws of the various jurisdictions in
which the Shares are being offered by the Underwriters;
(g) certificates in negotiable form for all Shares to be
sold by such Selling Stockholder under this Agreement, together with a
stock power or powers duly endorsed in blank by such Selling
Stockholder have been placed in custody with the Custodian for the
purpose of effecting delivery hereunder;
(h) such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale
or resale of the Shares;
(i) all information furnished or to be furnished to the
Company by or on behalf of such Selling Stockholder for use in
connection with the preparation of the Registration Statement and the
Prospectus, insofar as it relates to such Selling Stockholder, is or
will be true and correct in all respects and, with respect to the
Registration Statement, does not and will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and, with respect to the Prospectus, does not
and will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and
(j) nothing has come to such Selling Stockholder's
attention that has caused such Selling Stockholder to believe that (A)
when any Preliminary Prospectus was filed with the Commission it
included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, (B) when the Registration Statement or any amendment
thereto was or is declared effective, it did or will include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading and (C) when
the Prospectus or any amendment or supplement thereto is filed with
the Commission pursuant to Rule 424(b) (or, if the Prospectus or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared
effective), and at all times subsequent thereto up to the time of
purchase and the additional time of purchase, as the case may be, the
Prospectus, as amended or supplemented at any such time, did or will
include any untrue statement of material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that such Selling Stockholder makes no
representation or warranty with respect to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon, and in conformity with, written
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information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in the
preparation thereof.
5. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Shares, provided that the Company
shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except for service of process with respect to the offering and sale
of the Shares); promptly to advise you of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to
use every reasonable effort to obtain the withdrawal of any order of
suspension as soon as possible;
(b) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendment or
supplement thereto after the effective date of the Registration
Statement), including any Term Sheet or Integrated Prospectus, as the
Underwriters may request for the purposes contemplated by the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement
(including any registration statement filed pursuant to Rule 462(b)
under the Act) has become effective and when any post-effective
amendment thereto becomes effective and (ii) when the Prospectus,
including any Term Sheet or Integrated Prospectus, is filed with the
Commission pursuant to Rule 424(b) under the Act, if required under
the Act (which the Company agrees to file in a timely manner under
such Rule);
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information with respect thereto, or of notice of
institution of proceedings for or the entry of a stop order suspending
the effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to use every reasonable effort to obtain the
lifting or removal of such order as soon as possible; and to advise
you promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus and to file no such amendment or
supplement to which you shall object in writing;
(e) to furnish to you and, upon request, to each of the
other Underwriters for a period of five years from the date of this
Agreement, (i) copies of any reports or other
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communications that the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies
of all annual, quarterly and current reports filed with the Commission
on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, and (iii) such other information as you
may reasonably request regarding the Company;
(f) to advise the Underwriters promptly of the happening
of any event known to the Company within the time during which a
prospectus relating to the Shares is required to be delivered under
the Act that would require the making of any change in the Prospectus
then being used, so that the Prospectus, as then supplemented, would
not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading and,
during such time, promptly to prepare and furnish, at the Company's
expense, to the Underwriters such amendments or supplements to such
Prospectus as may be necessary to reflect any such change in such
quantities as reasonably requested by the Underwriters, and to furnish
to you a copy of such proposed amendment or supplement before filing
any such amendment or supplement with the Commission;
(g) to make generally available to its security holders,
and to deliver to you, an earnings statement of the Company (which
will satisfy the provisions of Section 11(a) of the Act) covering a
period of at least twelve months beginning after the effective date of
the Registration Statement but ending not later than fifteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), as soon as is reasonably practicable after
the termination of such twelve-month period;
(h) to furnish to you three signed copies of the
Registration Statement, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto) and a
sufficient number of additional conformed copies of the foregoing
(without exhibits) for distribution of a copy of each to the other
Underwriters;
(i) to furnish to you as early as practicable prior to
the time of purchase and the additional time of purchase, as the case
may be, but not later than two business days prior thereto, a copy of
the latest available unaudited interim financial statements, if any,
of the Company that have been read by the Company's independent
certified public accountants, as stated in their letter to be
furnished pursuant to Section 8(c) of this Agreement;
(j) to pay all expenses, fees and taxes, including any
applicable transfer taxes (other than the fees and disbursements of
counsel for the Underwriters except as set forth under Section 7
hereof and (iii) and (iv) below), in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto,
and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment),
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(ii) the issue, sale and delivery of the Shares, (iii) the printing of
this Agreement, the Agreement Between Underwriters, any dealer
agreement, the Custody Agreement and Powers of Attorney and the
reproduction and/or printing and furnishing of copies of each thereof
to the Underwriters and to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) the
listing of the Shares on the Nasdaq National Market and any
registration thereof under the Exchange Act; (vi) any filing for
review of the public offering of the Shares by the National
Association of Securities Dealers, Inc. (the "NASD"); (vii) the "road
show" presentation to potential investors and (viii) the performance
of the Company's and the Selling Stockholders' other obligations
hereunder (it is understood, however, that except as provided in this
subparagraph (j), Section 7 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees and
disbursements of their counsel, transfer taxes on resale of any of the
Shares by them, and any expenses incurred with respect to the
publication of a "tombstone");
(k) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (e) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act;
(l) not to offer, pledge, sell, contract to sell, grant
any option to purchase, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or other securities
convertible into or exercisable or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock, or permit the
registration under the Act of any shares of Common Stock or any such
substantially similar securities without the prior written consent of
▇▇▇▇▇▇, Read & Co. Inc. for a period of 120 days after the date of
the final Prospectus, other than (i) the issuance of Common Stock upon
the exercise of outstanding stock options and warrants or pursuant to
the Company's Executive Loan Plan, in each case, to the extent
disclosed in the Registration Statement and the Prospectus and (ii)
the grant of stock options pursuant to stock option plans disclosed in
the Registration Statement and Prospectus;
(m) not to take, directly or indirectly, any action
designated to cause or to result in, or that might constitute the
stabilization or manipulation of the Common Stock to facilitate the
sale or resale of the Shares.
6. COVENANT OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder, severally, and not jointly, agrees with each Underwriter and the
Company that such Selling Stockholder will not offer, pledge, sell, contract to
sell, grant any option to purchase, transfer or otherwise dispose of,
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directly or indirectly, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock without the prior written consent of ▇▇▇▇▇▇,
Read & Co. Inc. for a period of 120 days after the date of the final
Prospectus, other than the sales to you pursuant to this Agreement or the
Repurchase Agreement (as defined in the Prospectus).
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to the first two paragraphs of Section 9 hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the time of purchase (and the several
obligations of the Underwriters at the additional time of purchase are subject
to the accuracy of the representations and warranties on the part of the
Company and the Selling Stockholders on the date hereof and at the time of
purchase and at the additional time of purchase, as the case may be), the
performance by the Company and the Selling Stockholders of its obligations
hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of
purchase and at the additional time of purchase, as the case may be,
an opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇, L.L.P., counsel for the
Company, addressed to the Underwriters, and dated the time of purchase
or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to King & Spalding, counsel for the
Underwriters, stating that:
(i) the Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware with full corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement and the
Prospectus; and the Company has full corporate power and
authority to execute, deliver and perform this Agreement as
contemplated hereby and thereby;
(ii) each of the Company and its Subsidiaries is
duly qualified or licensed by, and is in good standing in,
each jurisdiction in which it owns or leases property or
conducts its business and in each other jurisdiction in which
the failure, individually or in the aggregate, to be so
licensed or qualified could reasonably be expected to have a
Material Adverse Effect;
(iii) each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of
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incorporation with full corporate power and authority to own
its properties and to conduct its business as a foreign sales
corporation;
(iv) as of the date of this Agreement, the time of
purchase and the additional time of purchase, as the case may
be, the Company's authorized capitalization is as set forth in
the section of the Registration Statement and the Prospectus
entitled "Capitalization";
(v) all of the issued and outstanding shares of
capital stock of the Company, including the Shares, have been
duly authorized and validly issued and are fully paid and
nonassessable and free of statutory and, to the best knowledge
of such counsel, contractual preemptive rights;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the capital stock of the Company, including
the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement
and the Prospectus; and the certificates for the Shares are
in due and proper form and the holders of the Shares will not
be subject to personal liability under Delaware General
Corporation law by reason of being such holders; immediately
prior to the delivery of the Shares being sold by such Selling
Stockholder, such Selling Stockholder was the sole registered
owner of such Shares;
(viii) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(ix) the documents incorporated by reference in
the Registration Statement and Prospectus, when they were
filed (or, if an amendment with respect to any such document
was filed, when such amendment was filed), complied as to form
in all material respects with the Exchange Act (except as to
the financial statements and schedules and other financial and
statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion);
(x) the Registration Statement has become
effective under the Act and, to the best of such counsel's
knowledge, no stop order proceedings with respect thereto are
pending or threatened under the Act;
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(xi) no approval, authorization, consent or order
of or filing with any federal, state, local or foreign
governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance and sale
of the Shares as contemplated by this Agreement other than
registration of the Shares under the Act (except such counsel
need express no opinion as to any necessary qualification
under the securities laws of any foreign country or the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters);
(xii) the statements (A) in the Prospectus under
the captions "Risk Factors - Anti-takeover Provisions," and
"Description of Capital Stock" and (B) in the Registration
Statement in Item 15, in each case insofar as such statements
constitute summaries of the legal matters (including statutes
and legal and governmental proceedings), contracts or other
agreements referred to therein, are accurate in all material
respects;
(xiii) the Company will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company" or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended, and after the
transactions comtemplated hereby will not be a Company
"controlled" by an "investment company" with the meaning of
such Act;
(xiv) the execution, delivery and performance of
this Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby do not and will
not violate any provision of the articles of incorporation or
bylaws of the Company or any of its Subsidiaries or conflict
with, result in any breach of, or constitute a default under
(or constitute any event that with notice, lapse of time, or
both, would constitute a breach of or default under), any
provision of any license, lease, indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or
instrument filed as an exhibit to a registration statement or
incorporated therein by reference or any other material
agreement or instrument known to such counsel and to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of their respective
properties may be bound or to which any property is subject,
or to the best of such counsel's knowledge, under any law,
regulation or rule or any decree, judgment or order applicable
to the Company or any of its Subsidiaries;
(xv) the documents incorporated by reference in
the Registration Statement and Prospectus, when they were
filed (or, if an amendment with respect to any such document
was filed when such amendment was filed), complied as to form
in all material respects with the Exchange Act (except as to
the financial statements and schedules and other financial and
statistical data contained or
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incorporated by reference therein as to which such counsel
need express no opinion);
(xvi) to the best of such counsel's knowledge,
there are no contracts, licenses, agreements, leases or
documents of a character that are required to be filed as
exhibits to the Registration Statement or to be summarized or
described in the Prospectus that have not been so filed,
summarized or described;
(xvii) to the best knowledge of such counsel, there
are no actions, suits or proceedings pending or threatened
against the Company or any of its properties at law or in
equity or before or by any commission, board, body, authority
or agency that are required to be described in the Prospectus
but are not so described;
(xviii) to the best knowledge of such counsel, no
person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any
securities of the Company as a result of the sale of the
Shares to the Underwriters hereunder, nor does any person have
preemptive rights, rights of first refusal or other rights to
purchase any of the Shares;
(xix) such counsel have participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants of the
Company and representatives of Underwriters at which the
contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in
paragraph (xii) above), on the basis of the foregoing nothing
has come to the attention of such counsel that causes them to
believe that the Registration Statement or any amendment
thereto, at the time such Registration Statement or amendment
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 or any supplement thereto,
at the date of such Prospectus or such supplement, and at all
times up to and including the time of purchase or additional
time of purchase, 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, in light
of the circumstances under which they were made, not
misleading (it being understood that such counsel need express
no opinion with respect to the financial statements and
schedules and other financial and statistical data included in
the Registration Statement or Prospectus).
(b) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a professional corporation, counsel to
the Selling Stockholders, addressed to the
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Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form satisfactory to King & Spalding,
counsel for the Underwriters, stating that:
(i) this Agreement, the Powers of Attorney and
the Custody Agreement have been duly authorized executed and
delivered by or on behalf of each of the Selling Stockholders;
and the Custody Agreement of each Selling Stockholder
constitutes the valid and binding agreement of such Selling
Stockholder enforceable in accordance with its terms except as
the validity, binding effect or enforcement thereof may be
limited by or subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and similar
laws of general application relating to or affecting the
enforcement of creditors' rights, (ii) the effect of general
principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealings, and
the possible unavailability of specific performance or
injunctive relief, whether considered in a proceeding in
equity or at law, and (iii) policy considerations or court
decisions which may limit the rights of any party to obtain
indemnification.
(ii) each of the Selling Stockholders has full
legal right, power and authority or capacity, as the case may
be, and to the best of such counsel's knowledge has obtained
any authorization or approval required by law (other than
those imposed by the Act and the securities or blue sky laws
of certain jurisdictions), to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder in
the manner provided in this Agreement;
(iii) upon receipt of payment by the Selling
Stockholders and delivery of the Shares to be sold by the
Selling Stockholders pursuant hereto, title thereto will pass
to the Underwriters severally, free and clear of any claim,
lien, encumbrance, security interest or restrictions on
transfer, assuming the Underwriters purchased such Shares for
value in good faith without notice of any adverse claim;
(iv) each of the Representatives of the Selling
Stockholders has been duly authorized by each Selling
Stockholder to execute and deliver on behalf of such Selling
Stockholder this Agreement and any other document necessary or
desirable in connection with the transactions contemplated
hereby and to deliver the shares to be sold by such Selling
Stockholders;
(v) to the best of such counsel's knowledge, the
execution, delivery and performance of this Agreement and the
Custody Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict with, or
result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time or both
would constitute a breach of, or default under), any
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provision of the articles of association or bylaws or
constituent documents of such Selling Stockholder or under any
provision of any indenture, mortgage, deed of trust, bank loan
or credit agreement, or other agreement or instrument
specified on Exhibit 8(b)(v) hereto to which such Selling
Stockholder or by which such Selling Stockholder or any of its
properties may be bound or affected or under any federal,
state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to such Selling Stockholder;
(vi) no approval, authorization, consent or order
of or filing with any federal, state, local or foreign
governmental or regulatory commission, board, body, authority
or agency is required in connection with the sale of the
Shares as contemplated hereby other than registration of the
Shares under the Act (except such counsel need express no
opinion as to any necessary qualification under the securities
laws of any foreign country or the state securities or blue
sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters); and
(vii) the statements in the Prospectus under the
caption "Principal and Selling Stockholders" insofar as such
statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein.
(c) You shall have received from Coopers & ▇▇▇▇▇▇▇ L.L.P.
a letter or letters dated, respectively, the date of this Agreement
and the time of purchase and additional time of purchase, as the case
may be, and addressed to the Underwriters (with reproduced copies for
each of the Underwriters) in form and substance satisfactory to you.
(d) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of
King & Spalding and dated the time of purchase or the additional time
of purchase, as the case may be, in form and substance satisfactory to
you.
(e) No amendment or supplement to the Registration
Statement or the Prospectus, and any Term Sheet or Integrated
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you shall have reasonably objected in
writing.
(f) The Registration Statement shall become effective at
or before 5:00 P.M., New York City time, on the date of this Agreement
and, if Rule 430A or Rule 434 under the Act is used, the Prospectus,
including any Term Sheet constituting a part thereof, shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:00 P.M., New York City time, on the second full business day
after the date of this
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Agreement; provided, however, that any Integrated Prospectus shall
have been filed on or prior to the date on which a confirmation is
sent or given;
(g) Prior to the time of purchase or the additional time
of purchase, as the case may be: (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto,
or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(h) Between the time of execution of this Agreement and
the time of purchase or the additional time of purchase, as the case
may be, there has not been (i) any material change, present or
prospective, in the business, properties, results of operations,
condition (financial or otherwise), assets or prospects of the Company
other than as described in the Registration Statement and the
Prospectus, (ii) any transaction that is material to the Company
contemplated or entered into by the Company, other than as described
in the Registration Statement and the Prospectus, or (iii) any
obligation, contingent or otherwise, directly or indirectly, incurred
by the Company that is material to the Company other than as described
in the Registration Statement and the Prospectus.
(i) The Company, at the time of purchase or additional
time of purchase, as the case may be, will deliver to you a
certificate of the Company to the effect that the representations and
warranties of the Company set forth in this Agreement are true and
correct as of each such date and the conditions set forth in Section
8(g) and Section 8(h) have been met.
(j) You shall have received signed letters, dated the
date of this Agreement, from each of the Selling Stockholders and the
directors and executive officers of the Company to the effect that
such persons shall not offer, pledge, sell, contract to sell, grant
any option to purchase, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or other securities convertible
into or exercisable or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock without the prior written
consent of ▇▇▇▇▇▇, Read & Co. Inc., for a period of 120 days after the
date of the final Prospectus other than; (i) in the case of the
Selling Stockholders, shares sold to the Company pursuant to the
Repurchase Agreement (as defined in the Prospectus), (ii) in the case
of the Company, stock options issued pursuant to the Company's stock
option plans in the existence of the date of the Preliminary
Prospectus or stock issued pursuant to the Company's Executive Loan
Plan (as defined in the Prospectus), and (iii) in the case of
executive officers of the Company other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, shares
of Common Stock sold solely in connection with cashless exercises of
currently outstanding stock options held by such executive officers.
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(k) The Selling Stockholders will at the time of purchase
and the additional time of purchase, as the case my be, deliver to you
a certificate of the Representatives of the Selling Stockholders to
the effect that the representations and warranties of the Selling
Stockholders as set forth in this Agreement are true and correct as of
each such date.
(l) The Company and the Selling Stockholders shall have
furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration
Statement or the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you reasonably may
request.
(m) The Company and the Selling Stockholders shall have
performed such of their respective obligations under this Agreement as
are to be performed by the terms hereof at or before the time of
purchase and at or before the additional time of purchase, as the case
may be.
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement
shall become effective (i) if neither Rule 430A nor Rule 434 under the Act is
used, when you shall have received notification of the effectiveness of the
Registration Statement, or (ii) if either Rule 430A or Rule 434 under the Act
is used, when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in your absolute discretion if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities
generally on the New York Stock Exchange shall have been suspended or minimum
prices shall have been established on the New York Stock Exchange, or if a
general banking moratorium shall have been declared either by the United States
or New York State authorities, or if the United States shall have declared war
in accordance with its constitutional processes or there shall have occurred
any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in your
judgment makes it impracticable to market the Shares.
If you elect to terminate this Agreement as provided in this Section
9, the Company, the Selling Stockholders and each other Underwriter shall be
notified promptly by written notice transmitted by facsimile and confirmed by
written notice sent by registered mail, return receipt requested.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company or
the Selling Stockholders, as the case may be, shall be unable to comply with
any of the terms of this Agreement, neither the Company nor the Selling
Stockholders shall be under any obligation or liability under this Agreement
(except to the extent
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provided in Sections 6(b), 7 and 11), and the Underwriters shall be under no
obligation or liability to the Company and the Selling Stockholders under this
Agreement (except to the extent provided in Section 11) .
10. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter
shall default in its obligation to take up and pay for the Firm Shares to be
purchased by it hereunder and if the number of Firm Shares that all
Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall take up and pay for (in addition to the aggregate principal
amount of Firm Shares they are obligated to purchase pursuant to Section 1) the
number of Firm Shares agreed to be purchased by all such defaulting
Underwriters as hereinafter provided. Such Shares shall be taken up and paid
for by such non-defaulting Underwriter or Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so designated
or, in the event no such designation is made, such Shares shall be taken up and
paid for by all nondefaulting Underwriters pro rata in proportion to the
aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Selling Stockholders agree with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted underwriters selected by
you with the approval of the Selling Stockholders or selected by the Selling
Stockholders with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Selling Stockholders for a defaulting Underwriter or
Underwriters, in accordance with the foregoing provision, the Company or you
shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary change in the
Registration Statement and the Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
11. INDEMNITY BY THE COMPANY, THE SELLING STOCKHOLDERS AND THE
UNDERWRITERS.
(a) The Company and the Selling Stockholders, jointly and
severally, agree to indemnify, defend and hold harmless each Underwriter, each
person that controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and each Underwriter's agents,
employees, officers and directors and the agents, employees, officers and
directors of any such controlling person (collectively, the "UNDERWRITER
INDEMNIFIED PARTIES") from and against any and all losses, claims, damages,
judgments, liabilities and expenses (including the fees and expenses of counsel
and other expenses in connection with investigating, defending or settling any
such action or claim) as they are incurred (and regardless of whether the
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Underwriter indemnified party is a party to the litigation, if any) which,
jointly or severally, any such Underwriter indemnified party may incur under
the Act, the Exchange Act or otherwise arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, judgments, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or omission
contained in and in conformity with information with respect to any Underwriter
furnished in writing by or on behalf of any Underwriter through you to the
Company expressly for use therein with reference to such Underwriter provided,
however, that a Selling Stockholder shall be liable under this Section 11(a)
for any such loss, claim, damage, judgment, liability and expense arising out
of any such statement or omission only to the extent of the total net proceeds
from the offering received by such Selling Stockholder from the Underwriters
for the Shares sold by such Selling Stockholder hereunder. This indemnity
agreement will be in addition to any liability the Company or the Selling
Stockholders otherwise may have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against
any Underwriter indemnified party with respect to which indemnity may be sought
against the Company or Selling Stockholders, as the case may be, pursuant to
this Section 11, such Underwriter indemnified party shall promptly notify the
Company and the Representatives of Selling Stockholders, in writing, and the
Company or the Selling Stockholders or if a majority in interest thereof so
choose, the Represtntatives of the Selling Shareholders, as the case may be,
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Underwriter indemnified party and payment of all
fees and expenses; provided that the omission to notify the Company or the
Selling Stockholders shall not relieve them from any liability that they may
have to any Underwriter indemnified party. An Underwriter indemnified party
shall have the right to employ separate counsel in any such action or
proceeding and to assume the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter indemnified party unless
(i) the employment of such counsel has been authorized in writing by the
Company or the Selling Stockholders, as the case may be, (ii) the Company or
the Selling Stockholders, as the case may be, has failed promptly to assume the
defense and employ counsel satisfactory to the Underwriter indemnified party or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both one or more Underwriter indemnified parties and
the Company or the Selling Stockholders, as the case may be, and such
Underwriter indemnified parties shall have reasonably concluded that there may
be one or more legal defenses available to them that are different from or
additional to those available to the Company or the Selling Stockholders (in
which case the Company or the Selling Stockholders shall not have the right to
assume the defense of such action on behalf of such Underwriter indemnified
parties), in any of which events such fees and expenses shall be borne by the
Company or the Selling Stockholders, as the case may be, and reimbursed as they
are incurred. None of the Company or the Selling Stockholders shall be liable
for any settlement of any such action effected without the written consent of
the Company or the Selling Stockholders, as the case may be (which consent
shall not be unreasonably withheld
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or delayed), but if settled with the written consent of the Company or the
Selling Stockholders, as the case may be, or if there is a final judgment with
respect thereto, the Company agrees to indemnify and hold harmless each
Underwriter indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person that controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively, the
"COMPANY INDEMNIFIED PARTIES") and each Selling Stockholder and any person that
controls such Selling Stockholder within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act (collectively, the "SELLING STOCKHOLDER
INDEMNIFIED PARTIES") from and against any losses, claims, damages, judgements,
liabilities and expenses to the same extent as the foregoing indemnity from the
Company and the Selling Stockholders to the Underwriter indemnified parties,
but only with respect to information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use with respect to such Underwriter in the Registration
Statement, any Preliminary Prospectus or the Prospectus. In case any action
shall be brought against any Company indemnified party or Selling Stockholder
indemnified party based on the Registration Statement, any Preliminary
Prospectus or the Prospectus and in respect of which indemnity may be sought
against any Underwriter pursuant to this Section 11(c), such Underwriter shall
have the rights and duties given to the Company by Section 11(b) (except that
if the Company or Selling Stockholders shall have assumed the defense thereof,
such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, provided that the fees
and expenses of such separate counsel shall be at the expense of such
Underwriter), and the Company indemnified parties and the Selling Stockholder
indemnified parties shall have the rights and duties given to the Underwriter
indemnified parties by Section 11(b).
(d) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or any Selling Stockholder indemnified
party, then the party required to indemnify such indemnified party under this
Section 11, 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, judgments, liabilities and expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages, judgments, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other hand shall be deemed to be in the same proportion as the total
proceeds from the offering of the Shares (net of underwriting discounts and
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commissions but before deducting expenses) received by the Selling Stockholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, 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, judgments, liabilities and expenses 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 claim
or action.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
11(d) were determined by pro rata allocation or by any other method of
allocation (even if the Underwriters were treated as one entity for such
purpose) that does not take account of the equitable considerations referred to
in this Section 11(d). Notwithstanding the provisions of this Section 11(d),
(i) 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 such
Underwriter and distributed to the public were offered to the public exceeds
the amount of any damages that such Underwriter otherwise has been required to
pay by reason of such untrue statement or alleged untrue statement or omission
or alleged omission and (ii) no Selling Shareholder shall be required to
contribute any amount in excess of the amount by which the total net proceeds
from the offering received by such Selling Stockholder from the Underwriters
for the Shares sold by such Selling Stockholder hereunder exceeds the amount of
any damages that such Selling Shareholder otherwise has been required to pay by
reason of such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 11 are several
in proportion to their respective underwriting commitments and are not joint.
The Company hereby acknowledges and agrees with the Underwriters that
the statements set forth in (i) the last paragraph on the cover page of the
Prospectus, (ii) the paragraph in boldface type on the inside cover page of the
Prospectus relating to stabilization, (iii) the list of Underwriters under the
caption "Underwriting" in the Prospectus and (iv) the statements relating to
the selling concession and reallowance in the third paragraph below the tables
under the caption "Underwriting" in the Prospectus constitute the only
information furnished to the Company in writing by the Underwriters expressly
for use in the Registration statement, any Preliminary Prospectus or the
Prospectus.
(e) The indemnity and contribution agreements contained in this
Section 11 and the representations, warranties and covenants of the Company and
the Selling Stockholders contained
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in this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter indemnified party or by
or on behalf of any Company indemnified party or any Selling Stockholder
indemnified party and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. Subject to the provisions of Section
11(b) and Section 11(c), the Company, each Selling Stockholder and each
Underwriter agree promptly to notify the other of the commencement of any
litigation or proceeding against it in connection with the issuance and sale of
the Shares or in connection with the Registration Statement or the Prospectus.
12. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
▇▇▇▇▇▇, Read & Co., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department; and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate
Department and Wheat, First Securities, Inc., Riverfront Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department; and if to
the Selling Stockholders, shall be sufficient in all respects, if delivered or
sent to ____________________________________, Attention: __________________;
and if to the Company, shall be sufficient in all respects if delivered or sent
to the Company, at the offices of the Company at ▇▇▇▇▇▇▇ Furniture Company,
Inc., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
13. CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
14. PARTIES AT INTEREST. The agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company, the
Selling Stockholders, the Underwriter indemnified parties, the Selling
Stockholder indemnified parties and the Company indemnified parties, and their
respective successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts, which together shall constitute one and the same agreement among
the parties.
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If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the Underwriters, please so indicate in
the space provided below for such purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholders and the Underwriters, severally.
Very truly yours,
▇▇▇▇▇▇▇ FURNITURE COMPANY, INC.
By:
---------------------------
By:
---------------------------
Attorney-in-Fact
By:
---------------------------
Name:
Title:
▇▇-▇▇▇ ACQUISITION FUND, L.P.
By: Mezzanine Investments, L.P.
Its Managing General Partner
By: ML Mezzanine, Inc.
Its General Partner
By:
-----------------------
Name:
Title:
▇▇-▇▇▇ ACQUISITION FUND II, L.P.
By: Mezzanine Investments II, L.P.
Its Managing General Partner
By: ML Mezzanine II, Inc.
Its General Partner
By:
-----------------------
Name:
Title:
▇▇-▇▇▇ ACQUISITION FUND, L.P.
(RETIREMENT ACCOUNTS) II, L.P.
By: Mezzanine Investments II, L.P.
Its Managing General Partner
By: ML Mezzanine II, Inc.
Its General Partner
By:
-----------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, N.A., NOT
INDIVIDUALLY, BUT AS TRUSTEE FOR
THE 1989 ▇▇▇▇▇▇ ▇. ▇▇▇ NOMINEE
TRUST, DATED 9/29/89*
▇▇▇▇▇▇ & CO.*
▇. ▇▇▇▇▇▇ ▇▇▇▇*
▇▇▇▇ ▇. CHILDS*
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇*
▇▇▇▇▇ ▇. HARKING C/F ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇*
▇▇▇▇▇ ▇. HARKING C/F ▇▇▇▇▇ ▇▇▇▇▇▇▇*
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇*
▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇*
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
By:
---------------------------
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇
Attorney-in-Fact
Accepted and agreed to as of the date first
above written, on behalf of themselves
and the other several Underwriters
named in Schedule A
▇▇▇▇▇▇, READ & CO., INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
WHEAT, FIRST SECURITIES, INC.
BY: ▇▇▇▇▇▇, READ & CO. INC.
By:
-------------------------------
Name:
Title:
29
SCHEDULE A
UNDERWRITERS NUMBER OF FIRM SHARES
------------ ---------------------
▇▇▇▇▇▇, Read & Co. Inc. . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. . . . . . . . . . . . .
Wheat, First Securities, Inc. . . . . . . . . . . . . . .
30
SCHEDULE B
Selling Stockholders
Number of Firm Number of Additional
Name Shares to Be Sold Shares to be Sold
