______________ Shares of Common Stock
UNITED STATIONERS INC.
UNDERWRITING AGREEMENT
__________________, 1998
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇ GULL ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.
As Representatives (the "Representatives")
of the several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Subject to the terms and conditions stated herein, (i) United Stationers
Inc., a Delaware corporation (the "COMPANY"), proposes to issue and sell to
the several underwriters named on Schedule I attached hereto (the
"UNDERWRITERS"), an aggregate of 1,750,000 authorized but unissued shares
(the "COMPANY SHARES") of common stock, par value $.10 per share, of the
Company (the "COMMON STOCK") and (ii) the persons named on Schedule II
attached hereto (the "SELLING STOCKHOLDERS") propose to sell, severally and
not jointly, to the Underwriters an aggregate of _____________ shares of
issued and outstanding Common Stock (the "STOCKHOLDER SHARES"). The Company
Shares and the Stockholder Shares, representing an aggregate of
______________ shares of Common Stock, are herein referred to collectively as
the "FIRM SHARES." In addition, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, the Company
proposes to sell to the Underwriters, at the option of the Underwriters, up
to an additional ___________ shares of Common Stock (the "ADDITIONAL
SHARES"). The Firm Shares and any Additional Shares purchased by the
Underwriters are herein referred to collectively as the "SHARES." The Shares
are more fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, and may have filed an amendment
or amendments thereto, on Form S-3 (No. 333-____________), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"ACT"). The Company will not, without the prior consent of the
Representatives (which consent will not be unreasonably withheld), file any
amendment thereto or make any change in the form of final prospectus included
therein. Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, at the time of effectiveness of the registration statement,
including any information to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the rules
and regulations of the Commission under the Act (the "REGULATIONS"), is
herein called the "REGISTRATION STATEMENT" and the prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the Regulations or
filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) or Rule 434 filing is required, is herein called the
"PROSPECTUS." The term "PRELIMINARY PROSPECTUS" as used herein means a
preliminary prospectus as described in Rule 430 of the Regulations. If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) of the Regulations
(the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement. Any reference herein to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), on or before the effective date of the
Registration Statement, the date of such preliminary prospectus or the date
of the Prospectus, as the case may be, and any reference herein to the terms
"AMEND," "AMENDMENT" or "SUPPLEMENT" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to
refer to and include (i) the filing of any document under the Exchange Act
after the effective date of the Registration Statement, the date of such
preliminary prospectus or the date of the Prospectus, as the case may be, and
prior to the termination of the Offering to which the Registration Statement
relates, which is incorporated therein by reference and (ii) any such
document so filed.
(b) At the time of the effectiveness of the Registration Statement or
the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date, if any (as hereinafter respectively
defined), the Registration Statement and the Prospectus and any amendments
thereof and supplements thereto (including any documents or portions of
documents incorporated or deemed incorporated by reference therein) complied
or will comply in all material respects with the applicable provisions of the
Act and the Exchange Act and the respective rules and regulations thereunder
and do not or will not contain an untrue statement of a material fact and do
not or will not omit to state any material fact required
2
to be stated therein or necessary in order to make the statements therein (i)
in the case of the Registration Statement, not misleading and (ii) in the
case of the Prospectus, in light of the circumstances under which they were
made, not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the Registration
Statement for the registration of the Shares or any amendment thereto or
pursuant to Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such preliminary
prospectus and any amendments thereof and supplements thereto complied in all
material respects with the applicable provisions of the Act and the Exchange
Act and the respective rules and regulations thereunder and did not contain
an untrue statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstance under which they were made,
not misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from
the Registration Statement or the Prospectus or any related preliminary
prospectus or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by or
on behalf of any Underwriter through the Representatives expressly for use in
connection with the preparation thereof.
(c) Neither the Commission nor the "Blue Sky" or securities authority
of any jurisdiction has issued an order (a "STOP ORDER") suspending the
effectiveness of the Registration Statement, preventing or suspending the use
of any preliminary prospectus, the Prospectus, the Registration Statement or
any amendment or supplement thereto, refusing to permit the effectiveness of
the Registration Statement, or suspending the registration or qualification
of the Firm Shares or the Additional Shares, nor, to the best knowledge of
the Company (based solely upon telephonic inquiry to the Commission), has any
of such authorities instituted or overtly threatened to institute any
proceedings with respect to a Stop Order.
(d) Ernst & Young LLP, whose report is filed with the Commission as a
part of the Registration Statement, serves as independent public accountants
with regard to the Company and each of its subsidiaries as required by the
Act and the Regulations.
(e) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no material adverse
change, nor any development involving a prospective material adverse change,
in the business, prospects, properties, operations, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as
a whole, whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or obligations,
direct or contingent, which are material to the Company and its subsidiaries
taken as a whole, except for liabilities or obligations which are reflected
in the Registration Statement and the Prospectus.
3
(f) The Company and United Stationers Supply Co., an Illinois
corporation and the principal operating subsidiary of the Company ("USSC"),
have the corporate power and the authority to enter into this Agreement,
perform each of their respective obligations hereunder and, with respect to
the Company, to issue, sell and deliver the Shares to be sold by it
hereunder. This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and USSC and this Agreement has
been duly and validly executed and delivered by the Company and USSC and,
assuming the due execution and delivery if this Agreement by the
Representatives, is a valid and binding obligation of the Company and USSC,
enforceable against each of them in accordance with its terms, except to the
extent that rights to indemnity and contribution hereunder may be limited by
federal or state securities laws or the public policy underlying such laws.
(g) The execution, delivery and performance of this Agreement by the
Company and USSC and the consummation of the transactions contemplated hereby
do not and will not (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) or require
consent under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries, pursuant to the terms of any agreement, instrument, franchise,
license or permit to which the Company or any of its subsidiaries is a party
or by which any of such corporations or their respective properties or assets
may be bound or (ii) violate or conflict with any provision of the
certificate of incorporation or bylaws of the Company or any of its
subsidiaries or any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court
or any public, governmental or regulatory agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated
hereby, including the issuance, sale and delivery of the Shares to be issued,
sold and delivered by the Company hereunder, except the registration under
the Act of the Shares and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters, all of which
have been obtained as of the date hereof, or by the National Association of
Securities Dealers, Inc. (the "NASD").
(h) All of the outstanding shares of Common Stock have been duly and
validly authorized and issued, are fully paid and nonassessable and were not
issued and are not now in violation of or subject to any preemptive,
maintenance or similar rights. The Company has, at the date hereof, an
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus. The Shares, when issued, delivered and sold in
accordance with this Agreement, will be duly and validly issued and
outstanding, fully
4
paid and nonassessable, and will not have been issued in violation of or be
subject to any preemptive, maintenance or similar rights. The Common Stock
conforms in all material respects to the description thereof contained in the
Registration Statement and the Prospectus.
(i) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and its subsidiaries
is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which would not in the aggregate have a material adverse effect
on the condition (financial or other), results of operation, cash flows,
assets or prospects of the Company and its subsidiaries taken as a whole (a
"MATERIAL ADVERSE EFFECT"). Each of the Company and its subsidiaries has all
requisite corporate power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses
and permits of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus, except for those for which the failure to so obtain would not in
the aggregate have a Material Adverse Effect.
(j) As of the date hereof, USSC was the Company's only significant
subsidiary (as defined in the Regulations). All of the outstanding shares of
capital stock of USSC have been duly and validly issued, are fully paid and
non-assessable and were not issued in violation of preemptive rights or
rights of first refusal and are owned directly by the Company free and clear
of any lien, pledge, encumbrance, claim, security interest, restriction on
transfer, stockholders' agreement, voting trust or other defect of title
whatsoever other than the pledge of such shares to The Chase Manhattan Bank,
as collateral agent under the Company's senior secured credit agreement.
(k) Except as described in the Registration Statement and as shall be
described in the Prospectus, there is no litigation, action, suit,
investigation or proceeding, governmental or otherwise, to which the Company
or any of its subsidiaries is a party or which is pending or, to the best
knowledge of the Company, overtly threatened against the Company or any of
its subsidiaries which (i) could reasonably be expected to have a Material
Adverse Effect, (ii) is required to be disclosed in the Registration
Statement and the Prospectus, or (iii) seeks to restrain, enjoin, prevent the
consummation of, or otherwise challenge the issuance of, the Shares or the
execution and delivery of this Agreement or any of the other transactions
contemplated hereby, or questions the legality or validity of any such
transactions or that seeks to recover damages or obtain other relief in
connection with any of such transactions.
(l) Since its determination to undertake the Offering, the Company has
not taken and prior to the termination or completion of the Offering the
Company will not take,
5
directly or indirectly, any action designed to cause or result in, or which
constitutes or which could reasonably be expected to constitute, the
stabilization or manipulation of the market price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
(m) The consolidated financial statements, including the notes thereto,
and supporting schedules included in the Registration Statement and as will
be set forth in the Prospectus present fairly the financial condition,
results of operations, stockholders' equity and cash flows and other
information purported to be shown therein of the Company and its subsidiaries
at the dates and for the periods indicated. Such consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as otherwise disclosed therein. No other financial statements are
required by Form S-3 or otherwise to be included in the Registration
Statement or the Prospectus. The historical financial data set forth in the
Registration Statement and as will be set forth in the Prospectus under the
captions "Summary Consolidated Financial and Operating Data,"
"Capitalization," "Selected Consolidated Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
fairly present, on the basis stated in the Registration Statement and as will
be stated in the Prospectus, the information set forth therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement and as will be set forth in the
Prospectus. All other financial information and statistical data set forth
in the Registration Statement and as will be set forth in the Prospectus have
been prepared on an accounting basis consistent with the financial statements
included in the Registration Statement and as will be included in the
Prospectus. The pro forma and "as adjusted" financial information included
in the Registration Statement and as will be included in the Prospectus that
gives effect to the issuance of the Shares, the application of the net
proceeds therefrom and the other transactions and events specified therein
has been properly compiled on the basis of the assumptions set forth with
respect thereto. The pro forma adjustments to the historical figures have
been properly applied to such figures and such pro forma financial
information complies in all material respects with the applicable accounting
requirements of the Commission.
(n) Each of the Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements (or elsewhere) in the Registration Statement and as will
be set forth in the Prospectus, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except (i) those, if any, reflected in the
financial statements or otherwise described in the Registration Statement and
as will be described in the Prospectus, or (ii) those which are not material
in amount and do not adversely affect the use made and proposed to be made of
such property by the Company and its subsidiaries. Each of the Company and
its subsidiaries holds its leased properties under valid, subsisting and
enforceable leases, with such exceptions as are not, individually or in the
aggregate, material and do not individually or in the aggregate, interfere
with the use made or proposed to be made of such properties by the Company or
any of its subsidiaries. Except as disclosed in the Registration Statement
6
and as will be disclosed in the Prospectus, the Company and each of its
subsidiaries own or lease all such properties as are necessary to its
operations as now conducted or as proposed to be conducted in the foreseeable
future.
(o) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" or an entity "controlled by" an "investment company" within the
meaning of Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder.
(p) The Company and each of its subsidiaries have (i) filed all
federal, state and local and foreign tax returns which are required to be
filed through the date hereof, and all such tax returns are true, complete
and accurate in all material respects, or (ii) properly filed for extensions
thereof and have paid all taxes shown on such returns and all assessments
received by them except where, in the case of state and local and foreign tax
returns, the failure to file, extend the due date of or pay the same, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect; the Company has no knowledge of any tax deficiency which has been or
might be asserted against the Company or any of its subsidiaries which could
reasonably be expected to have a Material Adverse Effect. All tax
liabilities are adequately provided for on the consolidated books of the
Company.
(q) The Company and each of its subsidiaries own, or possess adequate
licenses or other rights to use, all material patents, trademarks, service
marks, trade names, copyrights, technology and know-how reasonably necessary
to conduct the business now or proposed to be conducted by the Company and
each of its subsidiaries as described in the Registration Statement and as
will be described in the Prospectus, and, except as disclosed in the
Registration Statement and as will be disclosed in the Prospectus, neither
the Company nor any of its subsidiaries has received any written notice of
infringement of or conflict with (or knows of such infringement or conflict
with) rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how. The Company and each of its
subsidiaries do not in the conduct of their business as now conducted
infringe or conflict with any such rights of any third party, which
infringement or conflict could reasonably be expected to have a Material
Adverse Effect.
(r) There are no contracts, indentures, mortgages, loan agreements,
notes, leases or other agreements or instruments or other documents
(collectively, "DOCUMENTS") required to be described or referred to in, or
filed with, the Registration Statement and, in respect of the representation
made at the Closing Date and the Additional Closing Date, the Prospectus,
other than those described or referred to therein or filed as exhibits
thereto. All such descriptions are accurate in all material respect and
present fairly the information described therein.
(s) There are no rights of return or other agreements between the
Company and any customer of the Company, not adequately reserved for, which
would cause any sales
7
reflected in the Company's consolidated financial statements for the year
ended December 31, 1997 or the three months ended March 31, 1998 included in
the Registration Statement and to be included in the Prospectus to fail to
qualify as sales in accordance with generally accepted accounting principles
or the Company's revenue recognition policy as reflected in the audited
financial statements included in the Registration Statement and to be
included in the Prospectus, except for those for which the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect.
(t) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(u) Neither the Company nor any of its subsidiaries is in violation or
breach of, or in default (nor has any event occurred which with notice, or
lapse of time, or both, would constitute a default) of any contract,
agreement, indenture, loan or other agreement, instrument, mortgage, note,
permit, lease, license, arrangement or understanding to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries may be bound where such default, either individually or together
with all such other defaults, could reasonably be expected to have a Material
Adverse Effect or on the ability of the Company to perform its obligations
hereunder. Each such contract, agreement, indenture, loan or other
agreement, instrument, mortgage, note, permit, lease, license, arrangement
and understanding has been duly authorized, executed and delivered by the
Company or any of its subsidiaries, as the case may be, is in full force and
effect and is the legal, valid and binding obligation of the Company or its
subsidiaries, as the case may be, and, to the Company's knowledge, the other
parties thereto, and is enforceable against the Company or its subsidiaries,
as the case may be, and, to the Company's knowledge, against the other
parties thereto in accordance with its terms. Neither the Company nor any of
its subsidiaries is in violation or breach of, or in default with respect to,
any term of its respective certificate of incorporation or bylaws. Neither
the Company nor any of its subsidiaries is in violation of, or in default
with respect to, any law, rule, regulation, order, judgment or decree, except
such as are described in the Registration Statement and as will be described
in the Prospectus or such as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(v) The Company has obtained from each of the Company's senior officers
and directors and those holders of capital stock of the Company named on
Schedule II attached hereto a written agreement (a "LOCK-UP AGREEMENT"), in a
form or forms approved by the Representatives and their counsel, that for a
period of 60 days from the date of the Prospectus such person will not (i)
directly or indirectly, offer to sell, contract to sell or
8
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "DISPOSITION"), any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "SECURITIES"),
now owned or hereafter acquired by such person or with respect to which such
person has or hereafter acquires the power of disposition, otherwise than (A)
as a bona fide gift or gifts, provided the donee or donees thereof agree to
be bound in writing by the terms of the Lock-Up Agreement, (B) as a
distribution or dividend to limited partners or stockholders of such person
provided that the distributees thereof agree in writing to be bound by the
terms of the Lock-Up Agreement, or (C) with the prior written consent of the
Representatives, or (ii) make any demand for or exercise any right with
respect to the registration of any Common Stock or other securities of the
Company.
(w) Except as described in the Registration Statement and as will be
described in the Prospectus, no labor dispute with the employees of the
Company and any of its subsidiaries exists or, to the knowledge of the
Company, is threatened that could reasonably be expected to have a Material
Adverse Effect.
(x) Except as described in the Registration Statement and as will be
described in the Prospectus, (i) the Company is not a party to or bound by
any stockholders' agreements or voting trusts with respect to any securities
of the Company and (ii) there are no contracts, agreements or understandings
between the Company or any of its subsidiaries and any person or entity
granting such person or entity the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or entity or to require the
Company to include such securities in the securities registered pursuant to
the Registration Statement other than such contracts, agreements or
understandings for which appropriate waivers have been obtained.
(y) To the knowledge of the Company, except as disclosed in the
Registration Statement and as will be described in the Prospectus, neither it
nor any of its subsidiaries is in violation of any federal or state law or
regulation relating to occupational safety and health or to the storage,
handling or transportation of hazardous or toxic materials, and the Company
and each of its subsidiaries have received all material permits, licenses or
other approvals required under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct their
respective businesses. The Company and each of its subsidiaries are in
compliance with all terms and conditions of any such permits, licenses or
approvals, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which could not,
individually or together with all such other violations or failures,
reasonably be expected to have a Material Adverse Effect.
(z) The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated.
9
(aa) The Company, either directly or through one or more of its
subsidiaries, has in effect, with insurers the Company reasonably believes to
be financially sound, insurance with respect to its business and properties
and the business and properties of its subsidiaries against loss or damage of
the kind customarily insured against by corporations engaged in the same or
similar businesses and similarly situated, of such type and in such amounts
as are customarily carried under similar circumstances by such other
corporations.
(bb) The Company has complied and will comply with all provisions of
Florida Statutes Section 517.075 (Chapter 92-198, Laws of Florida). Neither
the Company, nor any affiliate thereof, does business with the government of
Cuba or with any person or affiliate located in Cuba.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents and warrants to,
and agrees with, the several Underwriters that:
(a) Such Selling Stockholder (i) has caused a certificate(s) for the
number of Shares to be sold by such Selling Stockholder hereunder to be
delivered to BankBoston, N.A., as custodian (the "CUSTODIAN"), endorsed in
blank or with blank stock powers or assignments duly executed, with
signatures appropriately guaranteed, if applicable; such certificate(s) to be
held in custody by the Custodian for delivery pursuant to the provisions
hereof on the Closing Date or the Additional Closing Date, as the case may
be, and (ii) has granted an irrevocable power of attorney to ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or any of them, as
such Selling Stockholder's attorney-in-fact (each, an "ATTORNEY-IN-FACT"),
all in accordance with the terms of a Power of Attorney and Custody Agreement
(the "Selling Agreements"), in the form heretofore delivered to the
Representatives, with authority to execute and deliver this Agreement on
behalf of such Selling Stockholder, to determine the purchase price to be
paid by the Underwriters to such Selling Stockholder as provided in Section
3(a) hereof, to authorize the delivery of the Shares to be sold by such
Selling Stockholder hereunder and to otherwise act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this
Agreement.
(b) The execution, delivery and performance of this Agreement and the
Selling Agreements by or on behalf of such Selling Stockholder and the
consummation of the transactions contemplated hereby and thereby will not (i)
conflict with or result in the breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) or require consent under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of such Selling Stockholder pursuant to the terms of any agreement,
instrument, franchise, license or permit to which such Selling Stockholder is
a party or by which such Selling Stockholder or any of such Selling
Stockholder's property or assets may be bound, or (ii) violate or conflict
with any judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body having jurisdiction
over such Selling Stockholder or such Selling Stockholder's properties or
assets.
10
(c) Such Selling Stockholder has, and at the time of delivery of
the Shares to be sold by such Selling Stockholder, such Selling Stockholder
will have, full legal right, power, authority and capacity, and, except as
required under the Act and, with respect to sale of the Firm Shares and the
Additional Shares, state securities and Blue Sky laws, all necessary
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits of and from all public, regulatory or
governmental agencies and bodies, as are required for the execution, delivery
and performance of this Agreement and the Selling Agreements and the
consummation of the transactions contemplated hereby and thereby, including
the sale, assignment, transfer and delivery of the Shares to be sold,
assigned, transferred and delivered by such Selling Stockholder hereunder.
(d) Each of this Agreement and the Selling Agreements has been duly
and validly authorized, executed and delivered by or on behalf of such
Selling Stockholder and is a valid and binding obligation of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance with
its terms except to the extent that rights to indemnity hereunder may be
limited by applicable federal or state securities laws or the public policy
underlying such laws.
(e) Such Selling Stockholder has good, valid and marketable title
to the Shares to be sold by such Selling Stockholder pursuant to this
Agreement, free and clear of all liens, encumbrances, claims, security
interests, restrictions on transfer, stockholders' agreements, warrant
agreements, voting trusts and other defects in title whatsoever, with full
power to deliver such Shares hereunder, and, upon the delivery of and payment
for such Shares as herein contemplated, each of the Underwriters (assuming
that each such Underwriter acquires such Shares in good faith and without
notice of an adverse claim) will receive good, valid and marketable title to
the Shares purchased by it from such Selling Stockholder, free and clear of
all liens, encumbrances, claims, security interests, restrictions on
transfer, stockholders' agreements, warrant agreements, voting trusts and
other defects in title whatsoever other than those as may result from any
action taken by such Underwriter.
(f) Since the date of the Company's determination to undertake the
Offering, such Selling Stockholder has not taken and prior to termination or
completion of the Offering such Selling Stockholder will not take, directly
or indirectly, any action which has constituted or which was designed to
constitute or which might reasonably be expected to cause or result in
stabilization or manipulation of the market price of the shares of Common
Stock in violation of the Act or the Exchange Act.
(g) When the Registration Statement became effective, when any
post-effective amendment to the Registration Statement becomes effective,
when the Prospectus is first filed with the Commission pursuant to Rule
424(b), when any amendment of or supplement to the Prospectus is filed with
the Commission, at the Closing Date and, if applicable, the Additional
Closing Date, such parts of the Registration Statement and the
11
Prospectus and any amendments thereof and supplements thereto as relate to
such Selling Stockholder and are based upon information furnished in writing
to the Company by or on behalf of such Selling Stockholder expressly for use
therein will not contain an untrue statement of a material fact and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration not
misleading and (ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Shares or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such parts of such preliminary prospectus and any amendments thereof and
supplements thereto as relate to such Selling Stockholder and are based upon
information furnished in writing to the Company by or on behalf of such
Selling Stockholder expressly for use therein did not contain an untrue
statement of a material fact and did not omit to state any 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.
(h) Such Selling Stockholder confirms that the sale of such Selling
Stockholder's Shares pursuant to this Agreement is not prompted by any
information concerning the Company which is not set forth in the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the several Underwriters the Company
Shares and each of the Selling Stockholders selling Stockholder Shares
agrees, severally and not jointly, to sell to the several Underwriters the
number of Stockholder Shares set forth opposite the name of such Selling
Stockholder on Schedule III attached hereto, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and each of the Selling
Stockholders, at the price per share of $_______, the aggregate number of
Company Shares or Stockholder Shares, as the case may be (to be adjusted by
the Representatives to avoid fractional shares), determined by multiplying
the aggregate number of Firm Shares to be sold by the Company and each of
such Selling Stockholders, as set forth opposite their respective names in
Schedule III hereto, by a fraction, the numerator of which is the aggregate
number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased
by all the Underwriters hereunder, plus any additional number of Shares which
such Underwriter may become obligated to purchase pursuant to the provisions
of Section 10 hereof.
In the event and to the extent that the Underwriters shall exercise the
election to purchase Additional Shares as provided in paragraph 3(c) below,
the Company agrees to sell
12
to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at the purchase price per
share set forth above in this Section 3(a), that number of Additional Shares
as determined in accordance with paragraph 3(c) below, plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Consummation of the purchase of the Firm Shares by the
Underwriters shall be made at the offices of ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, or such other location as may be mutually
acceptable to the Representatives, the Attorneys-in-Fact and the Company;
provided, however, that delivery of the certificate, evidencing the Firm
Shares shall be made through The Depository Trust Company ("DTC") at its
offices in New York, New York. Such delivery and payment shall be made at
10:00 a.m., New York time, on the third or fourth business day (as permitted
under Rule 15c6-1 under the Exchange Act) (unless postponed in accordance
with the provisions of Section 10 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected
to rely upon Rule 430A of the Regulations, the third or fourth business day
(as permitted under Rule 15c6-1 under the Exchange Act) after the
determination of the initial public offering price of the Shares), or such
other time not later than 15 business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment
and delivery being herein called the "CLOSING DATE"). Payment shall be made
to the Company and the custodian for the Selling Stockholders by certified or
official bank checks or wire transfers of federal funds or similar same day
funds payable to the order of the Company and the custodian for the Selling
Stockholders, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Shares to be purchased
by them. Certificates for the Shares shall be registered in such name or
names and in such authorized denominations as the Representatives may request
in writing at least two full business days prior to the Closing Date. The
Company and the Selling Stockholders will permit the Representatives to
examine and package such certificates for delivery at DTC at least one full
business day prior to the Closing Date.
(c) In addition, the Company, as and to the extent indicated on
Schedule III attached hereto, hereby grants to the several Underwriters an
option to purchase up to _________ Additional Shares at the same purchase
price to be paid by the several Underwriters to the Company and the Selling
Stockholders for the Company Shares and the Stockholder Shares as set forth
in Section 3(a), for the sole purpose of covering over-allotments in the sale
of Firm Shares by the several Underwriters. This option may be exercised on
one occasion only, in whole or in part, at any time on or before the
thirtieth (30th) calendar day following the date of the Prospectus, by
written notice by the Representatives to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time, as reasonably determined by the
Representatives, when the certificates relating to the Additional Shares are
to be delivered (such date and time being herein sometimes referred to as the
"ADDITIONAL CLOSING DATE"); provided, however, that the Additional Closing
Date shall not be earlier than the Closing Date or earlier than the second
(2nd) full business day
13
after the date on which the option shall have been exercised nor later than
the eighth (8th) full business day after the date on which the option shall
have been exercised, unless such time and date are postponed in accordance
with the provisions of Section 10 hereof. Certificates for the Additional
Shares shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit
the Representatives to examine and package such certificates for delivery at
DTC at least one full business day prior to the Additional Closing Date.
If the option is exercised in full, the number of Additional Shares to
be sold by the Company shall be as is set forth opposite its names on
Schedule III attached hereto. In the event that the option is exercised in
part, the number of Additional Shares to be sold by the Company shall be
adjusted downward accordingly. The number of Additional Shares to be
purchased from the Company by each Underwriter (as adjusted by the
Representatives to eliminate fractional shares) shall be determined by
multiplying the aggregate number of Additional Shares to be sold by the
Company by a fraction, the numerator of which is the number of Firm Shares to
be purchased by such Underwriter pursuant to Schedule I and the denominator
of which is the maximum number of Firm Shares which all of the Underwriters
are entitled to purchase pursuant to Schedule I. The number of Additional
Shares to be purchased by each Underwriter if the option is exercised in full
is set forth opposite the name of such Underwriter on Schedule I attached
hereto.
Payment for the Additional Shares shall be made by certified or official
bank check, or wiring of federal funds or similar same day funds, payable to
the order of the Company at the offices of ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to
the Representatives for the respective accounts of the Underwriters.
4. OFFERING.
(a) It is understood that after the Registration Statement becomes
effective under the Act the several Underwriters propose to offer the Shares
for sale to the public upon the terms set forth in the Prospectus.
(b) You represent and warrant that you are authorized to execute
and deliver this Agreement on behalf of the several Underwriters named in
Schedule I hereto and to exercise all authority and discretion vested in the
Underwriters or you by the provisions of this Agreement, and that the Company
and the Selling Stockholders shall be entitled to act and rely on any
statement, request, notice, consent, waiver or agreement purportedly given on
behalf of any or all of the Underwriters when the same shall have been given
by the Representatives (jointly or by Bear, ▇▇▇▇▇▇▇ & Co. Inc. on behalf of
the Representatives) on such behalf.
14
5. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
(a) The Company covenants and agrees with the several Underwriters
that:
(i) If the Registration Statement has not yet been declared
effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b) or Rule 434, the
Company will file the Prospectus (properly completed if Rule 430A has
been used) pursuant to Rule 424(b) or Rule 434 within the prescribed
time period and will provide evi-dence satisfactory to the
Representatives of such timely filing. If the Company elects to rely on
Rule 434, the Company will prepare and file a term sheet that complies
with the requirements of Rule 434.
The Company will notify the Representatives immediately (and, if
requested by the Representatives, will confirm such notice in writing)
(A) when the Registration Statement and any amendments thereto become
effective, (B) of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for any
additional information, (C) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (D) of the issuance by the
Commission of any Stop Order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, (E) of the
receipt of any comments from the Commission, and (F) 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 that purpose. If the
Commission shall propose or enter a Stop Order at any time, the Company
will make every reasonable effort to prevent the issuance of any such
Stop Order and, if issued, to obtain the lifting of such Stop Order as
soon as possible. The Company will not file any amendment to the
Registration Statement or any amendment of or supplement to the
Prospectus (including the prospectus required to be filed pursuant to
Rule 424(b)or Rule 434) that differs from the prospectus on file at the
time of the effectiveness of the Registration Statement before or after
the effective date of the Registration Statement or file any document
under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which the
Representatives shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(ii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act, any event shall have occurred
as a result of which the Prospectus as then amended or supplemented
would include 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, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time
15
to amend or supplement the Prospectus or Registration Statement to
comply with the Act or the Regulations, the Company will notify the
Representatives promptly and prepare and file with the Commission an
appropriate post-effective amendment or supplement (in form and
substance satisfactory to the Representatives) which will correct such
statement or omission and will use its best efforts to have any such
post-effective amendment to the Registration Statement declared
effective as soon as possible.
(iii) The Company will promptly deliver to the Representatives
three signed copies of the Registration Statement, including exhibits
and all documents incorporated by reference therein and all amendments
thereto, and the Company will promptly deliver to each of the several
Underwriters such number of copies of any preliminary prospectus, the
Prospectus, the Registration Statement, and all amendments of and
supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, without exhibits, as the Representatives
may reasonably request.
(iv) The Company will endeavor in good faith, in cooperation
with the Representatives, at or prior to the time of effectiveness of
the Registration Statement, to qualify the Shares for offering and sale
under the securities laws relating to the offering or sale of the Shares
of such jurisdictions as the Representatives may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any action other
than one arising out of the offering or sale of Shares in such
jurisdiction.
(v) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its securityholders and to the
Representatives as soon as practicable, but not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings
statement (in form complying with the provisions of Rule 158 of the
Regulations) covering a period of at least twelve consecutive months
beginning on the first day of the first full month after the effective
date of the Registration Statement.
(vi) During the period of 60 days from the date of the
Prospectus, the Company will not, without the Representatives' prior
written consent, either directly or indirectly, offer to sell, contract
to sell or otherwise sell, dispose of, loan, pledge or grant any rights
with respect to any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock),
other than (A) the Company's sale of Shares hereunder, (B) the Company's
issuance of Common Stock upon the exercise of presently outstanding
stock options or warrants, and (C) the grant of options pursuant to any
existing option plan of the Company to purchase
16
up to [200,000] shares of Common Stock to certain directors, officers or
other employees of the Company; PROVIDED, HOWEVER, that such options are
not exercisable during the 60-day lock-up period.
(vii) The Company has obtained and delivered to the
Representatives, no later than the close of business on the date hereof,
a Lock-Up Agreement from each of its directors and senior officers and
each holder of capital stock of the Company listed on Schedule II
attached hereto.
(viii) During a period of three years from the effective date
of the Registration Statement, the Company will furnish to the
Representatives copies of (A) all reports to its stockholders; and (B)
all reports, financial statements and proxy or information statements
filed by the Company with the Commission or any exchange upon which the
Common Stock is listed or approved for quotation.
(ix) The Company will apply the proceeds from the sale of the
Shares by the Company as will be set forth under "Use of Proceeds" in
the Prospectus.
(b) The Selling Stockholders covenant and agree with the several
Underwriters that:
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, each of the Selling Stockholders agrees to deliver to the
Representatives prior to or at the Closing Date and, if applicable, the
Additional Closing Date, a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(ii) Each of the Selling Stockholders specifically agrees that
the Shares represented by the certificates held in custody for such
Selling Stockholder under the Selling Agreements are subject to the
interests of the Underwriters hereunder and that the arrangements made
by such Selling Stockholder for such custody and the appointment by such
Selling Stockholder of the Attorney-in-Fact by the Power of Attorney are
to that extent irrevocable. Each of the Selling Stockholders
specifically agrees that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the
death or incapacity of any executor or trustee or the termination of
such estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the occurrence
of any other event, except as may be contemplated by the Selling
Agreements. If any individual Selling Stockholder or any such executor
or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any such partnership or corporation
should be dissolved, or if any other such event should occur before the
delivery of the Shares hereunder, certificates
17
representing the Shares shall be delivered by or on behalf of such
Selling Stockholder in accordance with the terms and conditions of this
Agreement and the Selling Agreements, and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid
as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
6. PAYMENT OF EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders hereunder, including
those in connection with (i) preparing, printing, duplicating, filing and
distributing the Registration Statement, as originally filed and all
amendments thereof (including all exhibits thereto), any preliminary
prospectus, the Prospectus and any amendments thereof or supplements thereto
(including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this
Agreement, the Agreement Among Underwriters and the Selling Agreements) and
all other documents related to the public offering of the Shares (including
those supplied to the Underwriters in quantities as hereinabove stated), (ii)
the issuance, transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the
qualification of the Shares under state or foreign securities or Blue Sky
laws, including the costs of printing and mailing a preliminary and final
"Blue Sky Survey" and the fees of counsel for the Underwriters and such
counsel's disbursements in relation thereto, (iv) the inclusion of the Shares
to be sold by the Company on the Nasdaq National Market, (v) the filing fees
of the NASD; and (vi) the reasonable fees and expenses of one counsel acting
on behalf of the Selling Stockholders; provided, however, that the
Underwriters shall reimburse the Company for any and all of such expenses up
to an aggregate amount not to exceed $________. Notwithstanding the
foregoing, each Selling Stockholder will pay or cause to be paid all costs
and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in
this Section 6, including the Underwriters' discount and commissions
applicable to such Selling Stockholder's Shares.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Company Shares and
Stockholder Shares and, if applicable, the Additional Shares shall be subject
to the accuracy of the representations and warranties of the Company and the
Selling Stockholders herein contained, as of the date hereof and as of the
Closing Date (or in the case of the Additional Shares as of the Additional
Closing Date), to the absence from any certificates, opinions, written
statements or letters furnished to the Representatives or to ▇▇▇▇▇▇ and
▇▇▇▇▇, LLP ("UNDERWRITERS' COUNSEL") pursuant to this Section 7 of any
qualification or limitation not previously approved in writing by the
Representatives, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to the following
additional conditions:
18
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, or at
such later time and date as shall have been consented to in writing by the
Representatives; if the Company shall have elected to rely upon Rule 430A or
Rule 434 of the Regulations, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 5(a) hereof; and,
at or prior to the Closing Date no Stop Order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereof shall have
been issued and no proceedings therefor shall have been initiated or
threatened by the Commission.
(b) At the Closing Date and, if applicable, the Additional Closing
Date, the Representatives shall have received the opinion of Weil, Gotshal &
▇▇▇▇▇▇ LLP, counsel for the Company, dated the Closing Date or the Additional
Closing Date, as the case may be, addressed to the Underwriters and in form
and substance satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company is a corporation duly incorporated and is
validly existing and in good standing under the laws of its jurisdiction
of incorporation. The Company has all requisite corporate power and
authority to own, lease and operate its properties and carry on its
business as now being conducted and as described in the Prospectus.
(ii) The Company has authorized capital stock as set forth in
the Registration Statement and the Prospectus. All of the outstanding
shares of Common Stock are duly authorized, validly issued, fully paid
and nonassessable and were not issued in violation of any preemptive
rights pursuant to law or the Company's certificate of incorporation or,
to the knowledge of such counsel, in violation of or subject to any
other preemptive rights. The Company Shares have been duly authorized
and, when issued in accordance with this Agreement, will be validly
issued, fully paid and nonassessable and will not have been issued in
violation of any preemptive rights pursuant to law or the Company's
certificate of incorporation or, to the knowledge of such counsel, in
violation of or subject to any other preemptive rights. The Common
Stock, the Firm Shares and the Additional Shares conform in all material
respects to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(iii) Based solely upon telephonic confirmation by
representatives of the Nasdaq National Market, the Shares are duly
authorized for listing on the Nasdaq National Market.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery of this Agreement by the
Representatives) constitutes the legal, valid and binding obligation of
the Company enforceable against it in accordance with its terms
19
(i) subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights and remedies generally and subject, as
to enforceability, to general equitable principles including principles
of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
(ii) to the extent that rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or the public policy
underlying such laws.
(v) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby by the
Company do not and will not (A) conflict with or constitute a default
(or an event which with notice or lapse of time, or both, would
constitute a default) under, violate or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the terms
of any agreement, instrument, franchise, license or permit listed as an
exhibit to the Registration Statement or (B) violate or conflict with
any provision of the certificate of incorporation or bylaws of the
Company or any of its subsidiaries, or, to the knowledge of such
counsel, any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization,
waiver, license or other action by or filing with any agency or body
having jurisdiction over the Company pursuant to any New York or
Delaware corporate or federal law or regulation is required for the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, except for (1)
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2)
such as have been made or obtained under the Act.
(vi) The Registration Statement and the Prospectus (except for
the financial statements and the notes thereto, financial statement
schedules and other financial and statistical data included or
incorporated by reference therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Regulations. The documents filed under
the Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus and in any amendment thereof or supplement
thereto (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder.
(vii) Based solely upon telephonic confirmation from the
Commission, the Registration Statement has become effective under the
Act, and, to the knowledge of such counsel, no Stop Order suspending the
effectiveness of the Registration
20
Statement has been issued and no proceedings for that purpose are
pending before or overtly threatened by the Commission.
(vii) To the extent that the Prospectus purports to summarize
provisions of the Credit Agreement, the 12 3/4% Notes and the 8 3/8%
Notes, such summaries accurately reflect in all material respects the
provisions thereof purported to be summarized.
(ix) To the extent that the Prospectus purports to summarize
the terms of the Common Stock, Nonvoting Common Stock, $0.01 par value,
and Preferred Stock, $0.01 par value, of the Company, such summary
accurately reflects in all material respects the provisions relating to
such securities in Article Fourth of the Company's Charter.
(x) In addition, such opinion shall contain a statement that
such counsel has participated in conferences with directors, officers
and other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the
Underwriters and the representatives of counsel for the Underwriters, at
which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed, and, although such
counsel need not pass on nor assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus (except to the extent specified in such
opinion), no facts have come to the attention of such counsel which lead
such counsel to believe that the Registration Statement, on the
effective date thereof, 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 contained therein not misleading or
that the Prospectus, on the date thereof or on the Closing Date,
contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such firm need express no belief or opinion with respect
to the financial statements and schedules and other financial and
statistical data included or incorporated by reference therein).
In rendering such opinions, such counsel may rely, as to matters of
fact, to the extent they deem proper, on certificates of responsible officers
of the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company and its subsidiaries,
provided that copies of any such statements or certificates shall be
delivered to Underwriters' Counsel.
21
(c) At the Closing Date and, if applicable, the Additional Closing
Date, the Representatives shall have received the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
General Counsel for the Company, dated the Closing Date or the Additional
Closing Date, as the case may be, addressed to the Underwriters and in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
(i) USSC is a corporation duly incorporated and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation. USSC has all requisite corporate power and authority to
own, lease and operate its properties and carry on its business as now
being conducted and as described in the Registration Statement and the
Prospectus. All shares of the issued and outstanding capital stock of USSC
are duly authorized, validly issued, fully paid and non-assessable and have
not been issued in violation of any preemptive rights and, except as
disclosed in the Registration Statement and the Prospectus, are owned
directly by the Company, free and clear of any lien, claim, limitation or
voting rights, option, security interest or other encumbrance.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by USSC and (assuming the due authorization,
execution and delivery of this Agreement by the Representative) constitutes
the legal, valid and binding obligation of USSC, enforceable against it in
accordance with its terms (i) subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights and remedies generally and
subject, as to enforceability, to general equitable principles including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and (ii) to the extent that rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or the public
policy underlying such laws.
(iii) To the best of such counsel's knowledge after due inquiry,
there is no litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public, regulatory or
governmental agency or body pending or threatened against, or involving the
properties or business of, the Company or any of its subsidiaries, which,
if resolved against the Company or such subsidiary, individually or, to the
extent involving related claims or issues, in the aggregate, is of a
character required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
(iv) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby by the Company
and USSC do not and will not (A) conflict with or result in a breach of any
of the terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default) or
require consent under, or result in the
22
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to the terms
of any agreement, instrument, franchise, license or permit listed as an
exhibit to the Registration Statement or (B) violate or conflict with any
provision of the certificate of incorporation or bylaws of the Company or
any of its subsidiaries, or, to the best knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, except for (1) such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such counsel
need express no opinion) and (2) such as have been made or obtained
under the Act.
(d) At the Closing Date the Representatives shall have received the
favorable opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP, as counsel to certain of the
Selling Stockholders, and such other counsel as is reasonably acceptable to the
Underwriters with respect to each of the other Selling Stockholders, dated the
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, substantially to the effect that:
(i) Each of this Agreement and the Selling Agreements has been
duly and validly authorized, executed and delivered by or on behalf of each
Selling Stockholder and (assuming the due authorization, execution and
delivery of this Agreement by the Representatives) constitutes the legal,
valid and binding obligation of each Selling Stockholder, enforceable
against such Selling Stockholder in accordance with its terms, (i) subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights and remedies generally and subject, as to
enforceability, to general equitable principles including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
(ii) to the extent that rights to indemnity and contribution hereunder may
be limited by federal or state securities laws or the public policy
underlying such laws.
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder, and the compliance by such Selling Stockholder with
all of the provisions of this Agreement and the Selling Agreements and the
consummation of the transactions herein and therein contemplated will not
conflict with, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
specified by such Selling Stockholder to such counsel
23
as a material statute, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which such Selling Stockholder is a
party to or by which such Selling Stockholder is bound or to which any of
the properties or assets of such Selling Stockholder is subject nor will
such action result in any violation of the provisions of the certificate of
incorporation or bylaws of such Selling Stockholder if such Selling
Stockholder is a corporation, the partnership agreement of such Selling
Stockholder if such Selling Stockholder is a partnership, the terms of any
trust agreement if such Selling Stockholder is a trust or any order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or other property of
such Selling Stockholder.
(iii) To the knowledge of such counsel, each Selling Stockholder
has all requisite power and authority to execute, deliver and perform this
Agreement and the Selling Agreements, and no consent, approval,
authorization, waiver, license or other action by or filing with any agency
or body having jurisdiction over such Selling Stockholder pursuant to any
New York or Delaware corporate law (or other state law as to which such
counsel may express such opinion, as is reasonably satisfactory to counsel
for the Underwriters) or federal law or regulation is required for the
execution, delivery and performance by such Selling Stockholder of this
Agreement and the Selling Agreements and the consummation by such Selling
Stockholder of the transactions contemplated hereby and thereby except for
(1) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2)
such as have been made or obtained under the Act.
(iv) Upon delivery of the Shares to be sold by the Selling
Stockholders pursuant to this Agreement and upon payment therefor, good,
valid and marketable title to such Shares will pass to the Underwriters or
their nominees, severally, free and clear, to the knowledge of such
counsel, of all liens, encumbrances, equities or adverse claims other than
those arising as a result of any action taken by the Underwriters, assuming
that the Underwriters purchase such Shares in good faith and without notice
of any adverse claims within the meaning of the Uniform Commercial Code.
In rendering such opinions, such counsel may rely, as to matters of
fact, to the extent they deem proper, on certificates of responsible officers
of the Selling Stockholders, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel.
(e) At the Closing Date and, if applicable, the Additional Closing
Date, the Representatives shall have received a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company, dated the
Closing Date or Additional Closing Date, as the case may be, to the effect that
the condition set forth in subsection (a) of this Section 7 has been satisfied,
that as of the date hereof and as of the Closing Date or Additional Closing
24
Date, as the case may be, the representations and warranties of the Company set
forth in Section 1 hereof are accurate, and that as of the Closing Date or the
Additional Closing Date, as the case may be, the obligations of the Company to
be performed hereunder on or prior thereto have been duly performed.
(f) At the Closing Date, the Representatives shall have received a
certificate executed by the Attorney-in-Fact on behalf of each Selling
Stockholder, dated the Closing Date, to the effect that the representations and
warranties of such Selling Stockholder set forth in Section 2 hereof are
accurate, and that as of the Closing Date, as the case may be, the obligations
of such Selling Stockholder to be performed hereunder on or prior thereto have
been duly performed.
(g) At the time this Agreement is executed and at the Closing Date
and Additional Closing Date, the Representatives shall have received a letter
from Ernst & Young LLP, independent public accountants for the Company,
dated, respectively, as of the date of this Agreement and as of the Closing
Date or Additional Closing Date, as the case may be, addressed to the
Underwriters and in form and substance satisfactory to the Representatives,
to the effect that: (i) they are independent certified public accountants
with respect to the Company within the meaning of the Act and the applicable
published rules and regulations of the Commission thereunder and stating that
the answer to Item 10 of the Registration Statement is correct insofar as it
relates to them; (ii) stating that, in their opinion, the audited financial
statements and schedules of the Company included in the Registration
Statement and the Prospectus and covered by their opinion therein comply as
to form in all material respects with the applicable accounting requirements
of the Act and the applicable published rules and regulations of the
Commission thereunder; (iii) stating that, on the basis of procedures (but
not an examination made in accordance with generally accepted auditing
standards) consisting of a reading of the latest available unaudited interim
consolidated financial statements of the Company and its subsidiaries, a
reading of the minutes of meetings and consents of the stockholders and
boards of directors of the Company and its subsidiaries and the committees of
such boards subsequent to December 31, 1997, inquiries of officers and other
employees of the Company and its subsidiaries who have responsibility for
financial and accounting matters of the Company and its subsidiaries with
respect to transactions and events subsequent to December 31, 1997, and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would cause
them to believe that: (A) the unaudited consolidated financial statements and
schedules of the Company included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published
rules and regulations of the Commission thereunder or that such unaudited
consolidated financial statements are not fairly presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements
incorporated by reference in the Registration Statement and the Prospectus
except to the extent certain footnote disclosures have been omitted in
accordance with applicable rules of the Commission under the Exchange Act;
(B) with respect to the period subsequent to
25
December 31, 1997, there were, as of the date of the most recent available
monthly consolidated financial statements of the Company and its
subsidiaries, if any, and as of a specified date not more than five days
prior to the date of such letter, any changes in the capital stock or
long-term indebtedness of the Company or any decrease in the net current
assets or stockholders' equity of the Company, in each case as compared with
the amounts shown in the most recent balance sheet incorporated by reference
in the Registration Statement and the Prospectus, except for changes or
decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur or which are set forth in such letter; or (C) that
during the period from December 31, 1997, to the date of the most recent
available monthly consolidated financial statements of the Company and its
subsidiaries, if any, and to a specified date not more than five days prior
to the date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or total or
per share net income, except for decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur or which are set forth
in such letter; and (iv) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings and other
financial information pertaining to the Company and its subsidiaries set
forth in the Registration Statement and the Prospectus, which have been
specified by the Representatives prior to the date of this Agreement, to the
extent that such amounts, numbers, percentages and information may be derived
from the general accounting and financial records of the Company and its
subsidiaries or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries, and other
appropriate procedures specified by the Representatives (which procedures do
not constitute an examination in accordance with generally accepted auditing
standards) set forth in such letter, and found them to be in agreement.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory
in form and substance to the Representatives and to Underwriters' Counsel,
and the Underwriters shall have received from said Underwriters' Counsel a
favorable opinion, dated as of the Closing Date and the Additional Closing
Date, as the case may be, with respect to the sale of the Shares, the
Registration Statement and the Prospectus and such other related matters, as
the Representatives may reasonably require, and the Company and the Selling
Stockholders shall have furnished to Underwriters' Counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(i) Prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company and the Selling Stockholders shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(j) The Representatives shall have received from each person who
is a director or senior officer of the Company and each holder of capital
stock of the Company
26
listed on Schedule II attached hereto, a Lock-Up Agreement to the effect that
such person will not (i) make a Disposition of any Securities now owned or
hereinafter acquired by such person or with respect to which such person has
or hereinafter acquires the power of disposition, for a period of 90 days
after the date of the Prospectus otherwise than (A) as a bona fide gift or
gifts, provided that the donee or donees thereof agree to be bound in writing
by the terms of the Lock-Up Agreement, (B) as a distribution to limited
partners or stockholders of such person provided that the distributees
thereof agree in writing to be bound by the terms of the Lock-Up Agreement,
or (C) without the prior written consent of the Representatives, or (ii) make
any demand for or exercise any right with respect to the registration of any
Common Stock or other Securities of the Company.
(k) The NASD, upon review of the terms of the public offering of
the Firm Shares and the Additional Shares, shall not have objected to the
Underwriters' participation in such offering.
(l) The Company shall not have sustained, (i) since the date of
this Agreement, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree
required to be described in the Prospectus otherwise than as set forth or
expressly contemplated in the Prospectus, and (ii) since the respective dates
as of which information is given in the Prospectus, there shall not have been
any change in the capital stock (other than as disclosed in the Prospectus)
or increase in principal amounts of long-term or short-term indebtedness of
the Company or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise than
as set forth or expressly contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii) of this Section 7(k),
in the Representatives' judgment, makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated in the Prospectus.
(m) The Firm Shares, and the Additional Shares upon any purchase
pursuant to Section 3(c) hereof, have been listed on the Nasdaq National Market.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Representatives or to Underwriters' Counsel pursuant to this Section 7 shall
not be in all material respects reasonably satisfactory in form and substance
to the Representatives and to Underwriters' Counsel, all obligations of the
Underwriters hereunder may be canceled by the Representatives at, or at any
time prior to, the Closing Date and the obligations of the Underwriters to
purchase the Additional Shares may be canceled by the Representatives at, or
at any time prior to, the Additional Closing Date. Notice of such
cancellation shall be given to the Company and the Selling Stockholders in
writing, or by telephone, telex or telegraph, confirmed in writing.
27
8. INDEMNIFICATION.
(a) The Company and USSC, jointly and severally, agree to
indemnify and hold harmless each Underwriter, its officers, directors,
partners, employees, agents and counsel and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against any and all losses, liabilities, claims, damages
and expenses whatsoever (including, but not limited to, reasonable attorneys'
fees and any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or
any claim whatsoever, and any and all amounts paid in settlement of any claim
or litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Shares, as originally filed or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any supplement
thereto or amendment thereof, 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; provided,
however, that (i) the Company and USSC will not be liable in any such case to
the extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
expressly for use therein and (ii) the indemnity agreement contained in this
Section 8(a) with respect to any preliminary prospectus (or the Prospectus)
shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, liabilities, claims, damages or expenses purchased
the Shares which is the subject thereof (or to the benefit of any person
controlling such Underwriter) if at or prior to the written confirmation of
the sale of such Shares a copy of the Prospectus (or the Prospectus as
amended or supplemented) was not sent or delivered to such person and the
untrue statement or omission of a material fact contained in such preliminary
prospectus (or the Prospectus) was corrected in the Prospectus (or the
Prospectus as amended or supplemented) and delivery of such Prospectus (or
the Prospectus as amended or supplemented) would have eliminated any such
loss, liability, claim, damage or expense unless the failure is the result of
non-compliance by the Company with Section 5(a)(iii) hereof. This indemnity
will be in addition to any liability which the Company or USSC may otherwise
have, including under this Agreement.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, its officers, directors,
partners, employees, agents and counsel, and each other person, if any, who
controls any Underwriter, within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any
28
and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Shares,
as originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any amendment thereof 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 any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information relating to such Selling
Stockholder furnished to the Company by such Selling Stockholder expressly
for use therein (including, without limitation, any and all information
contained in the Prospectus under the caption "Principal and Selling
Stockholders"); PROVIDED, HOWEVER, that the indemnity agreement contained in
this Section 8(b) with respect to any preliminary prospectus (or the
Prospectus) shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, liabilities, claims, damages or expenses
purchased the Shares which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such
person and the untrue statement or omission of a material fact contained in
such preliminary prospectus (or the Prospectus) was corrected in the
Prospectus (or the Prospectus as amended or supplemented) and delivery of
such Prospectus (or the Prospectus as amended or supplemented) would have
eliminated any such loss, liability, claim, damage or expense unless the
failure is the result of non-compliance by the Company with Section 5(a)(iii)
hereof; and PROVIDED, FURTHER, that in no case shall any Selling Stockholder
be liable or responsible for any amount in excess of the net proceeds
received by such Selling Stockholder in connection with its sale of shares of
Common Stock hereunder. This indemnity will be in addition to any liability
which any Selling Stockholder may otherwise have, including under this
Agreement.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each Selling Stockholder, each of
the directors of the Company, each of the officers of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever (including but not limited to attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the
29
Registration Statement for the registration of the Shares, as originally
filed or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof 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 any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of such Underwriter through the Representatives expressly for use therein;
PROVIDED, HOWEVER, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable
to the Shares purchased by such Underwriter hereunder. This indemnity will
be in addition to any liability which any Underwriter may otherwise have,
including under this Agreement. The Company and each Selling Stockholder
acknowledge that the statements set forth in the last paragraph of the cover
page, in the two paragraphs on the inside front cover page of the Prospectus
and in the table listing the Underwriters under the caption "Underwriting" in
the Prospectus constitute the only information furnished in writing by or on
behalf of any Underwriter expressly for use in the Registration Statement
relating to the Shares as originally filed or in any amendment thereof, any
related preliminary prospectus or the Prospectus or in any amendment thereof
or supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
it (i) from any liability which it may have under this Section 8 except to
the extent that it has been prejudiced in any material respect by such
failure or (ii) from any liability which it may have otherwise). In case any
such action is brought against any indemnified party, and the indemnified
party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume
the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by one of the indemnifying parties in connection with
the defense of such action, (ii) the indemnifying parties shall not have
employed counsel satisfactory to such indemnified party to have charge of the
defense of such action within a reasonable time after notice of commencement
of the action, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of
30
which events such fees and expenses shall be borne by the indemnifying
parties. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent; provided, however, that such
consent was not unreasonably withheld.
9. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 8(a), (b)
and (c) hereof is for any reason held to be unavailable from any indemnifying
party or is insufficient to hold harmless a party indemnified thereunder, the
Company, USSC and the Selling Stockholders on the one hand and the
Underwriters, severally, on the other hand, shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated
by such indemnification provisions (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but
after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company, USSC or any Selling Stockholder any
contribution received by the Company, USSC or such Selling Stockholder from
persons, other than the Underwriters, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company),
to which the Company, USSC, one or more of the Selling Stockholders and one
or more of the Underwriters may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company, USSC
and the Selling Stockholders on the one hand and the Underwriters on the
other hand from the offering of the Shares or, if such allocation is not
permitted by applicable law or if indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 8 hereof, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company, USSC and the Selling Stockholders on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, USSC 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 (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company, USSC and the Selling Stockholders on the one hand and the
underwriting discounts and commissions received by the Underwriters, on the
other hand, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, USSC and the Selling
Stockholders on the one hand and of the Underwriters on the other hand shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, USSC, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, USSC, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the
31
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above. The Company and USSC shall be jointly and
severally liable for the amounts to be contributed by any of them pursuant to
the provisions of this Section 9. The Selling Stockholders shall be
severally, and not jointly, liable for the amounts to be contributed by any
of them pursuant to the provisions of this Section 9. The obligations of the
Underwriters to contribute are several in proportion to their respective
underwriting commitments and not joint.
Notwithstanding the provisions of this Section 9, (i) in no case shall
any Underwriter be liable or responsible (except as may otherwise be set
forth in an agreement among the Underwriters) for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, (ii) in no event shall any Selling Stockholder be liable for
contribution under this Section 9 in any amount in excess of the total
proceeds (net of underwriting discounts and commissions but before deducting
expenses) received by such Selling Stockholder in connection with the sale of
such Selling Stockholder shares of Common Stock hereunder less all amounts
paid or payable by such Selling Stockholder pursuant to Section 8, and (iii)
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(a) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 9 and the preceding sentence, 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 exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. For
purposes of this Section 9, (A) each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act shall have the same rights to contribution as such
Underwriter, (B) each person, if any, who controls a Selling Stockholder
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act shall have the same rights to contribution as such Selling Stockholder,
and (C) each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 9. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or
parties under this Section 9, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 9 or
otherwise. No party shall be liable for contribution with respect to any
action or claim settled without its consent; provided, however, that such
consent was not unreasonably withheld.
32
10. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and
if the Firm Shares or Additional Shares with respect to which such default
relates do not (after giving effect to arrangements, if any, made by the
Representatives pursuant to subsection (c) below) exceed in the aggregate 10%
of the number of shares of Firm Shares or Additional Shares, as the case may
be, which all Underwriters have agreed to purchase hereunder, then such Firm
Shares or Additional Shares to which the default relates shall be purchased
by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their
respective names on Schedule I attached hereto bear to the aggregate number
of Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, the Representatives
may, in their sole discretion, arrange for themselves or for another party or
parties (including any non-defaulting Underwriter or Underwriters who so
agree) to purchase such Firm Shares or Additional Shares, as the case may be,
to which such default relates on the terms contained herein. In the event
that within five calendar days after such a default the Representatives do
not arrange for the purchase of the Firm Shares or Additional Shares, as the
case may be, to which such default relates as provided in this Section 10,
this Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the Selling
Stockholders to sell the Additional Shares, shall thereupon terminate,
without liability on the part of the Company or the Selling Stockholders with
respect thereto (except in each case as provided in Sections 6, 8(a) and (b)
and 9 hereof) or the several Underwriters (except in each case as provided in
Sections 6, 8(a) and 9 hereof), but nothing in this Agreement shall relieve a
defaulting Underwriter or Underwriters of its or their liability, if any, to
the other several Underwriters, the Company and the Selling Stockholders for
damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters or are to be purchased by another party or parties as aforesaid,
the Representatives or the Company shall have the right to postpone the
Closing Date or Additional Closing Date, as the case may be, for a period,
not exceeding five business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or
in any other documents and arrangements and the Company agrees to file
promptly any amendment or supplement to the Registration Statement or the
Prospectus which, in the opinion of Underwriters' Counsel, may thereby be
made necessary or advisable. The term "UNDERWRITER" as used in this
Agreement shall include any party substituted under this Section 10 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
33
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements of the Underwriters, the Selling
Stockholders and the Company contained in this Agreement, including the
agreements contained in Section 6, the indemnity agreements contained in
Section 8 and the contribution agreements contained in Section 9, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of (i) any Underwriter or any controlling person
thereof, (ii) the Company, any of its officers and directors or any
controlling person thereof or (iii) any Selling Stockholder or any
controlling person thereof, and shall survive delivery of and payment for the
Shares to and by the several Underwriters. The representations contained in
Sections 1 and 2 and the agreements contained in Sections 6, 8, 9 and 12(d)
hereof shall survive the termination of this Agreement, including pursuant to
Sections 10 or 12 hereof.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective (i) if Rule 430A under
the Act is not used, when the Representatives and the Company shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have
executed and delivered this Agreement. If either the initial public offering
price or the purchase price per Share has not been agreed upon prior to 5:00
p.m., New York time, on the fifteenth full business day after the
Registration Statement shall have become effective, this Agreement shall
thereupon terminate without liability to the Company, USSC, the Selling
Stockholders or the Underwriters except as herein expressly provided. Until
this Agreement becomes effective as aforesaid, it may be terminated (A) by
the Company by notifying the Representatives and the Selling Stockholders,
(B) by joint action only of the Selling Stockholders directly or the
Attorney-in-Fact on behalf of all the Selling Stockholders by notifying the
Company and the Representatives or (C) by the Representatives notifying the
Company, USSC and the Selling Stockholders. Notwithstanding the foregoing,
provisions of this Section 12 and of Sections 1, 2, 6, 8 and 9 hereof shall
at all times be in full force and effect.
(b) The Representatives shall have the right to terminate this
Agreement and the obligations of the Underwriters hereunder at any time prior
to the Closing Date (and, with respect to the Additional Shares, the
Additional Closing Date) by notice to the Company from the Representatives,
without liability (other than with respect to Sections 8 and 9 hereof) on the
part of any Underwriter, to the Company and the Selling Stockholders if, on
or prior to such date, (i) trading in securities on the New York or American
Stock Exchanges or in the Nasdaq National Market shall have been suspended or
materially limited, or minimum or maximum prices shall have been established
or maximum price ranges for prices for securities shall have been required,
on the New York or American Stock Exchanges or in the Nasdaq National Market
by the Commission, or by such exchange or other regulatory body or
governmental authority having jurisdiction, (ii) a general banking moratorium
shall have been declared by a federal or state authority or any new
restriction materially and adversely affecting the Firm Shares or the
Additional Shares, as the case may be, shall have become effective, (iii)
there shall have occurred an outbreak or escalation of armed hostilities
34
involving the United States on or after the date hereof, or if there has been
a declaration by the United States of a national emergency or war, the effect
of which shall be, in the Representatives' reasonable judgment, to make it
inadvisable or impracticable to proceed with the sale and delivery of the
Shares on the terms and in the manner contemplated in the Prospectus, (iv)
any material adverse change shall have occurred since the respective dates as
of which information is given in the Registration Statement or the Prospectus
in the condition (financial or otherwise) of the Company and its subsidiaries
taken as a whole, whether or not arising in the ordinary course of business
other than as set forth in the Prospectus, or (v) there shall have occurred
such a material adverse change in general economic, political or financial
conditions or if the effect of international conditions on the financial
markets in the United States shall be such as, in the Representatives'
reasonable judgment, makes it inadvisable or impracticable to proceed with
the sale and delivery of the Firm Share or the Additional Shares, as the case
may be, on the terms contemplated hereby and by the Prospectus. The rights
of the Representatives to terminate this Agreement will not be waived or
otherwise relinquished by their failure to give notice of termination prior
to the time that the event giving rise to the right to terminate shall have
ceased to exist, provided that notice is given prior to the Closing Date
(and, with respect to the Additional Shares, the Additional Closing Date).
(c) Any notice of termination pursuant to this Section 12 shall be
by telephone, telex, or telegraph, confirmed promptly in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by the
Representatives as provided in Section 12(a) hereof or (ii) Sections 10(b) or
12(b) hereof (except clause (iv)), or if the sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
several Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision
hereof, the Company agrees, upon demand by the Representatives, to reimburse
the Underwriters for all out-of-pocket expenses (including the fees and
expenses of their counsel), incurred by the several Underwriters in
connection herewith.
13. NOTICE. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, sent by overnight delivery (by Federal Express
or any other national overnight delivery service), hand delivered, or sent by
telecopy (fax) and confirmed promptly in writing, to such Underwriter c/o
Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; if sent to the Company, USSC or any Selling Stockholder,
shall be mailed, delivered, or telegraphed and confirmed promptly in writing
to the Company, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Chairman of the Board.
14. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Selling Stockholders,
the Company and USSC
35
and the controlling persons, directors, officers, employees and agents
referred to in Sections 8 and 9, and their respective successors and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement
or any provision herein contained. The term "successors and assigns" shall
not include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
16. COUNTERPARTS. This Agreement may be executed by any one or more
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
17. PARTIAL INVALIDITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
36
If the foregoing correctly sets forth the understanding among the
Representative (on behalf of the Underwriters), the Company, USSC and the
Selling Stockholders, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among
each of the Underwriters, the Company, USSC and each of the Selling
Stockholders.
Very truly yours,
UNITED STATIONERS INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
UNITED STATIONERS SUPPLY CO.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Selling Stockholders named on
Schedule III attached hereto Agreement
*By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
Accepted as of the date first above written
on behalf of themselves and the other several
Underwriters named on Schedule I attached hereto.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇ GULL ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ INC.
By: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
-------------------
*As Attorney-in-Fact acting on behalf of each of the Selling Stockholders
named on Schedule III attached hereto.
37
SCHEDULE I
NUMBER OF
ADDITIONAL FIRM
SHARES TO BE
TOTAL NUMBER PURCHASED IF OVER-
OF FIRM SHARES TO ALLOTMENT IS
NAME OF UNDERWRITER BE PURCHASED EXERCISED IN FULL
----------------------------------- ------------------ -----------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ Gull ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Inc.
Total ----------- -----------
----------- -----------
38
SCHEDULE II
Lock-Up Agreements
The following stockholders of the Company, including all affiliates of
such stockholders that beneficially own shares of Common Stock, will execute
Lock-Up Agreements:
39
SCHEDULE III
NUMBER OF
ADDITIONAL SHARES TO
TOTAL NUMBER BE SOLD IF OVER-
OF FIRM SHARES ALLOTMENT IS
TO BE SOLD EXERCISED IN FULL
-------------- --------------------
The Company 1,750,000
SELLING STOCKHOLDERS:
40
