<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 18, 1998
REGISTRATION NO. 333-46547
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MAY & SPEH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2992650
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1501 OPUS PLACE
DOWNERS GROVE, ILLINOIS 60515
(630) 964-1501
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ANDY V. JONUSAITIS
MAY & SPEH, INC.
1501 OPUS PLACE
DOWNERS GROVE, ILLINOIS 60515
(630) 964-1501
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
ROBERT A. MCWILLIAMS MARGUERITE M. ELIAS
FREEBORN & PETERS KATTEN MUCHIN & ZAVIS
311 SOUTH WACKER DRIVE, SUITE 3000 525 WEST MONROE STREET
CHICAGO, ILLINOIS 60606-6677 CHICAGO, ILLINOIS 60661
(312) 360-6000 (312) 902-5200
(312) 360-6570 (FACSIMILE) (312) 902-1061 (FACSIMILE)
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE AGGREGATE OFFERING OFFERING REGISTRATION
REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(3) FEE(3)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Convertible Subordinated
Notes due 2003......... -- -- $115,000,000 $33,925(4)
- ----------------------------------------------------------------------------------------
Common Stock, par value
$0.01 per share(5)..... 4,600,000 $13.5625 $ 62,387,500 $18,405(4)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Includes $15,000,000 principal amount of Convertible Subordinated Notes
and 600,000 shares of Common Stock subject to the Underwriters' over-
allotment options.
(2) Calculated pursuant to Rule 457(c) based on the average high and low sales
prices of the Common Stock on February 12, 1998 as reported by The Nasdaq
Stock Market.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o) with respect to the Convertible Subordinated Notes and Rule
457(c) with respect to the Common Stock.
(4) Amount previously paid.
(5) There are also registered hereunder such indeterminate number of shares of
Common Stock, par value $0.01 per share, of May & Speh, Inc. as may be
issuable upon conversion of the Convertible Subordinated Notes due 2003,
and certain stock purchase rights issued pursuant to a Rights Agreement.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 18, 1998
PROSPECTUS
, 1998
$100,000,000
LOGO
% CONVERTIBLE SUBORDINATED NOTES DUE 2003
The % Convertible Subordinated Notes due 2003 (the "Notes") will be
convertible at the option of the holder into shares of common stock, par value
$0.01 per share, of the Company (the "Common Stock"), at any time prior to
maturity, unless previously redeemed or repurchased, at a conversion price (the
"Conversion Price") of $ per share (equivalent to a conversion rate of
shares per $1,000 principal amount of Notes), subject to adjustment in certain
events. Interest on the Notes is payable semi-annually on and of
each year, commencing on , 1998. On March 2, 1998, the last reported sale
price of the Common Stock on the Nasdaq National Market (where it trades under
the symbol "SPEH") was $12 1/2 per share.
The Notes are redeemable, in whole or in part, at the option of the Company,
at any time on or after , 2001, at the redemption prices set forth
herein, plus accrued and unpaid interest to the date of redemption. The Company
will be required to offer to purchase the Notes upon a Change in Control (as
defined), at 100% of the principal amount thereof, plus accrued and unpaid
interest to the date of repurchase.
The Notes are general, unsecured obligations of the Company, subordinated in
right of payment to all current and future Senior Indebtedness (as defined) of
the Company. In addition, the Notes will be structurally subordinated to all
current and future liabilities (including trade payables) of the Company's
subsidiaries. At December 31, 1997, as adjusted to give effect to the issuance
and sale of the Notes and the application of the estimated net proceeds
therefrom, approximately $26.0 million of outstanding indebtedness of the
Company would have constituted Senior Indebtedness, and the Company's
subsidiary had no outstanding obligations. The Company's existing revolving
credit facility (the "Existing Credit Facility") provides for borrowings of up
to $2.0 million. No amounts were outstanding under the Existing Credit Facility
as of December 31, 1997. In addition, the Company is negotiating with a group
of banks for a new revolving credit facility (the "New Credit Facility") which
is expected to provide for borrowings of up to $100.0 million. Indebtedness
under the Existing Credit Facility and the New Credit Facility would be Senior
Indebtedness. The Indenture (as defined) will not restrict the incurrence of
Senior Indebtedness or other indebtedness by the Company and its subsidiaries.
See "Description of Notes."
Application has been made for quotation of the Notes on the Nasdaq SmallCap
Market under the symbol "SPEHG."
Concurrently with this offering of Notes (the "Note Offering"), certain
selling stockholders (the "Selling Stockholders") of the Company are offering
4,000,000 shares of Common Stock pursuant to a separate Prospectus (the "Common
Stock Offering"). The Company will not receive any of the net proceeds from the
sale of the Common Stock by the Selling Stockholders. In addition, the Company
will sell up to 600,000 shares of Common Stock in the Common Stock Offering if
and to the extent the underwriters' over-allotment option is exercised.
Consummation of the Note Offering is not a condition to consummation of the
Common Stock Offering, and consummation of the Common Stock Offering is not a
condition to consummation of the Note Offering.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC(1) COMMISSIONS(2) COMPANY(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.................................... % % %
Total(4).................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $434,000.
(4) The Company has granted to the Underwriters an option exercisable within 30
days after the date of this Prospectus to purchase up to an additional
$15,000,000 aggregate principal amount of Notes on the same terms as set
forth above, at the Price to the Public, less the Underwriting Discounts
and Commissions, solely for the purpose of covering over-allotments, if
any. If such option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be
$ , $ , and $ , respectively. See "Underwriting."
The Notes are being offered by the several Underwriters when, as and if
delivered to and accepted by them, subject to certain conditions, including
their rights to withdraw, cancel or reject orders in whole or in part. It is
expected that delivery of the Notes will be made in New York, New York, on or
about , 1998, in book-entry form through the facilities of The
Depository Trust Company against payment therefor in immediately available
funds.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 18, 1998
PROSPECTUS
, 1998
4,000,000 SHARES
LOGO
COMMON STOCK
All of the 4,000,000 shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock") offered hereby are being sold by certain
stockholders of the Company (the "Selling Stockholders"). See "Selling
Stockholders." The Company will not receive any of the proceeds from the sale
of the shares by the Selling Stockholders.
Concurrently with this offering of Common Stock (the "Common Stock
Offering"), the Company is offering (the "Note Offering"), pursuant to a
separate Prospectus, $100,000,000 principal amount (excluding the underwriters'
over-allotment option) of % Convertible Subordinated Notes due 2003 (the
"Notes"). The net proceeds of the Note Offering are expected to be used to
repay the Company's entire indebtedness under a term loan, with the balance to
be used for capital expenditures, working capital and other general corporate
purposes, including possible acquisitions. Consummation of the Common Stock
Offering is not a condition to consummation of the Note Offering, and
consummation of the Note Offering is not a condition to consummation of the
Common Stock Offering. See "Use of Proceeds."
The Common Stock is quoted on the Nasdaq National Market under the symbol
"SPEH." On March 2, 1998, the last reported sale price of the Common Stock was
$12 1/2 per share. See "Price Range of Common Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS TO
TO THE DISCOUNTS AND THE SELLING
PUBLIC COMMISSIONS(1) STOCKHOLDERS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.................................. $ $ $
Total(2)................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) The Company has granted to the Underwriters an option exercisable within 30
days after the date of this Prospectus to purchase up to an additional
600,000 shares of Common Stock on the same terms as set forth above, at the
Price to the Public, less the Underwriting Discounts and Commissions,
solely for the purpose of covering over-allotments, if any. If such option
is exercised in full, the total Price to the Public and Underwriting
Discounts and Commissions will be $ and $ , respectively, and
the total proceeds to the Company will be $ before deducting
expenses payable by the Company estimated at $366,000. See "Underwriting."
The shares are being offered by the several Underwriters when, as and if
delivered to and accepted by them, subject to certain conditions, including
their rights to withdraw, cancel or reject orders in whole or in part. It is
expected that delivery of the shares will be made in New York, New York, on or
about , 1998.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses to be paid by the Registrant in connection with the
Note Offering and the Common Stock Offering are as follows:
<TABLE>
<S> <C>
Registration Fee................................................ $ 52,330
NASD Filing Fee................................................. 18,739
Nasdaq Listing Fees............................................. 18,000
Blue Sky Fees and Expenses...................................... 5,000
Printing and Engraving.......................................... 150,000
Accounting Fees and Expenses.................................... 75,000
Legal Fees and Expenses......................................... 150,000
Trustee Fees.................................................... 10,000
Miscellaneous................................................... 320,931
--------
Total....................................................... $800,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Nine of the Registrant's Certificate of Incorporation ("Article
Nine") is consistent with Section 102(b)(7) of the Delaware General
Corporation Law (the "DGCL"), which generally permits a company to include a
provision limiting the personal liability of a director in the company's
certificate of incorporation. With limitations, Article Nine eliminates the
personal liability of the Registrant's directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director.
However, Article Nine does not eliminate director liability (i) for breaches
of the duty of loyalty to the Registrant and its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for transactions from which a director derives
improper personal benefit and (iv) under Section 174 of the DGCL ("Section
174"). Section 174 makes directors personally liable for unlawful dividends
and stock repurchases or redemptions and expressly sets forth a negligence
standard with respect to such liability. Article Nine provides further that a
director shall not be personally liable to the Registrant or its stockholders
to such further extent as permitted by any law subsequently enacted, including
any subsequent amendment to the DGCL. While Article Nine protects the
directors from awards for monetary damages for breaches of their duty of care,
it does not eliminate their duty of care.
With certain limitations, Article Eight of the Registrant's By-Laws
("Article Eight") provides for indemnification of any of the Registrant's
past, present and future officers and directors against liabilities and
reasonable expenses incurred in any criminal or civil action by reason of such
person's being or having been an officer or director of the Registrant or of
any other corporation which such person serves as such at the request of the
Registrant. Indemnification under Article Eight is limited to officers and
directors who have acted in good faith and in a manner they reasonably
believed to be in the best interests of the Registrant. Any questions
regarding whether the officer or director has met the required standards of
conduct are to be answered by (i) a majority of disinterested directors, (ii)
a written opinion of a reputable disinterested legal counsel selected by the
Board or (iii) the stockholders. Indemnification rights under Article Eight
are non-exclusive. In the event of an officer's or director's death, such
person's indemnification rights shall extend to his or her heirs and legal
representatives. Rights under Article Eight are separable, and if any part of
that section is determined to be invalid for any reason, all other parts
remain in effect.
Under section 145 of the DGCL, directors and officers, as well as other
employees and individuals, may be indemnified against expenses (including
attorneys' fees), judgments, fines, amounts paid in settlement in connection
with specified actions, suits, or proceedings, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation--a "derivative action") if they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with
II-1
<PAGE>
respect to criminal actions or proceedings, had no reasonable cause to believe
their conduct was unlawful. A similar standard of care is applicable in the
case of derivative actions, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with the defense
or settlement of such an action, and the DGCL requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the corporation. Article Ten of the Registrant's
Certificate of Incorporation ("Article Ten") provides that the Registrant
shall indemnify its directors and officers (and, in the discretion of the
Board, employees of the Registrant or persons serving at the request of the
Registrant in any other capacity for or on behalf of the Registrant) to the
full extent permitted by law against any liability or expense actually and
reasonably incurred. Article Ten provides further that the Registrant shall
advance expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding upon receipt of an undertaking by or on
behalf of such officer or director to repay such amount if it shall ultimately
be determined that such officer or director is not entitled to be indemnified.
With the approval of the Registrant's stockholders, the Registrant has
entered into Directorship Agreements with its directors. These Directorship
Agreements provide that the directors will be indemnified to the fullest
extent permitted by law against all expenses (including attorneys' fees),
judgments, fines, amounts paid or incurred by them for settlement in any
action or proceeding, including any derivative action, on account of their
service as directors of the Registrant or of any subsidiary of the Registrant
or of any other company or enterprise in which they are serving at the request
of the Registrant. No indemnity will be provided to any director under these
agreements on account of liability for any breach of the director's duty of
loyalty to the Registrant, such subsidiaries, stockholders or enterprises, any
act or omission not in good faith or which involved intentional misconduct or
a knowing violation of laws, or any transaction from which the director
derived an improper personal benefit. In addition, no indemnification will be
provided for which payment is made to or on behalf of the director under any
insurance policy, except with respect to any excess amount to which the
director is entitled under the Directorship Agreement beyond the amount of
payment under such insurance policy, if a court having jurisdiction in the
matter finally determines that such indemnification is not lawful under any
applicable statute or public policy, or in connection with any proceeding
initiated by the director, or any proceeding by the director against the
Registrant or its directors, officers, employees or other persons entitled to
be indemnified by the Registrant, unless (i) the Registrant is expressly
required by law to make the indemnification, (ii) the proceeding was
authorized by the Board of Directors of the Registrant or (iii) the director
initiated the proceeding pursuant to the Directorship Agreement and the
director is successful in whole or in part in the proceeding.
In connection with the Note Offering and the Common Stock Offering, the
Registrant has purchased an insurance policy which provides coverage for the
Registrant and its directors and officers against loss, liability, cost or
expense incurred under the federal securities laws.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement for Notes
1.2 Form of Underwriting Agreement for Common Stock
4.1* Form of Indenture for Notes
4.2* Form of Notes (included as Exhibit A to the Form of Indenture for
Notes included
as Exhibit 4.1 hereto)
4.3* Specimen Certificate for Common Stock (incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on Form S-1
(File No. 33-98302))
5.1* Opinion of Freeborn & Peters
10.1* Employment Agreement between the Company and Michael J. Loeffler
dated as of October 1, 1997
10.2* Employment Agreement between the Company and Robert C. Early dated
as of October 1, 1997
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Freeborn & Peters (contained in Exhibit 5.1)
24.1* Power of Attorney
25.1* Statement of Eligibility of Trustee
</TABLE>
- ---------------------
*Previously filed
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby further undertakes that:
1. For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and State of Illinois on the
17th day of March, 1998.
May & Speh, Inc.
/s/ Peter I. Mason
By: _________________________________
Peter I. Mason
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in
the capacities described below on March 17, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Peter I. Mason Chairman, President and Chief Executive
___________________________________________ Officer (principal executive officer)
Peter I. Mason
/s/ Eric M. Loughmiller Executive Vice President, Chief Financial
___________________________________________ Officer and Secretary (principal
Eric M. Loughmiller financial officer)
* Vice President, Chief Accounting Officer
___________________________________________ and Treasurer (principal accounting
Willard E. Engel, Jr. officer)
* Executive Vice President, Corporate
___________________________________________ Development and a Director
Robert C. Early
* Chairman Emeritus
___________________________________________
Albert J. Speh, Jr.
* Director
___________________________________________
Deborah A. Bricker
* Director
___________________________________________
Casey Cowell
* Director
___________________________________________
Lawrence J. Speh
* Director
___________________________________________
Paul G. Yovovich
* Director
___________________________________________
Jonathan Zakin
* /s/ Eric M. Loughmiller
___________________________________________
Eric M. Loughmiller,
pursuant to power of attorney
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement for Notes.................
1.2 Form of Underwriting Agreement for Common Stock..........
</TABLE>
<PAGE>
$100,000,000
MAY & SPEH
% Convertible Subordinated Notes Due 2003
UNDERWRITING AGREEMENT
----------------------
__________, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
MAY & SPEH, INC., a Delaware corporation (the "Company"), proposes to issue
and sell $100,000,000 in aggregate principal amount of its % Convertible
Subordinated Notes Due 2003 (the "Firm Securities") to the several underwriters
named in Schedule I hereto (the "Underwriters"). The Company also proposes to
issue and sell to the several Underwriters not more than $15,000,000 in
aggregate principal amount of % Convertible Subordinated Notes Due 2003 (the
"Additional Securities"), if requested by the Underwriters as provided in
Section 2 hereof. The Firm Securities and the Additional Securities are herein
collectively called the Securities. The Securities are to be issued pursuant to
the provisions of an Indenture to be dated as of __________ __, 1998 (the
"Indenture") between the Company and Harris Trust and Savings Bank, as Trustee
(the "Trustee").
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3, including a
prospectus, relating to the Securities. The registration statement, as amended
at the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A or Rule 434 under the Act, is
<PAGE>
hereinafter referred to as the "Registration Statement"; and the prospectus,
including any the prospectus subject to completion and the term sheet, taken
together, as described in Rule 434(a)(1) under the Act, in the form first used
to confirm sales of Securities is hereinafter referred to as the "Prospectus"
(including, in the case of all references to the Registration Statement or the
Prospectus, documents incorporated therein by reference). If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional %
Convertible Subordinated Notes Due 2003 (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The terms "supplement" and "amendment" or "amend" as
used in this Agreement with respect to the Registration Statement or the
Prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Prospectus.
Section 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at ____% of the principal amount thereof (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to all of the Additional Securities and (ii) the Underwriters
shall have the right to purchase, severally and not jointly, up to all of the
Additional Securities from the Company at the Purchase Price. Additional
Securities may be purchased (in integral multiples of $1,000), as provided for
in Section 4 hereof, solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Securities. The Underwriters may
exercise their right to purchase Additional Securities in whole or in part from
time to time by giving written notice thereof to the Company within 30 days
after the date of this Agreement. The Representatives shall give any such
notice on behalf of the Underwriters and such notice shall specify the aggregate
amount of Additional Securities to be purchased pursuant to such exercise and
the date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date (as
hereinafter defined), (ii) no later than ten business days after such notice has
been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Securities are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase the number of Additional
Securities which bears the same proportion to the total amount of Additional
Securities to be purchased as the amount of Firm Securities set forth opposite
the name of such Underwriter in Schedule I bears to the total amount of Firm
Securities.
The Company hereby agrees not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common
2
<PAGE>
Stock or (ii) enter into any swap or other arrangement that transfers all or a
portion of the economic consequences associated with the ownership of any Common
Stock (regardless of whether any of the transactions described in clause (i) or
(ii) is to be settled by the delivery of Common Stock, or such other securities,
in cash or otherwise), except to the Underwriters pursuant to this Agreement,
for a period of 90 days after the date of the Prospectus without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's stock option and stock ownership plans
existing on the date hereof, (ii) the Company may issue shares of Common Stock
upon the exercise of an option or warrant outstanding on the date hereof, (iii)
the May & Speh, Inc. Employee Stock Ownership Plan (the "ESOP") may distribute
shares of Common Stock to participants or beneficiaries of the ESOP, and/or may
sell, contract to sell or otherwise dispose of any shares of Common Stock in
order to make cash distributions to participants or beneficiaries of the ESOP,
in accordance with the terms of the plan and trust documents governing the ESOP,
and (iv) Selling Stockholders who are individuals may transfer shares of Common
Stock to members of their immediate family or to trusts for the benefit of such
Selling Stockholders or trusts for the benefit of members of their immediate
family, provided such transferees agree in writing to be bound by the transfer
restrictions set forth herein.
The Company also agrees not to file any registration statement with respect
to any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock (other than a registration statement on Form
S-8 relating to the Company's stock option plans currently in effect) for a
period of 90 days after the date of the Prospectus without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation. The Company
shall, prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by (i) each Selling Stockholder and (ii) each of the
directors and officers of the Company who is not a Selling Stockholder to the
effect that such person will not, during the period commencing on the date such
person signs such agreement and ending 180 days after the date of the Prospectus
(with respect to the Selling Stockholders) and ending 90 days after the date of
the Prospectus (with respect to each of the directors and officers who is not a
Selling Stockholder), without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation, (A) engage in any of the transactions described
in the first sentence of this paragraph or (B) make any demand for, or exercise
any right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
Section 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. A global certificate for the Securities
(the "Global Certificate") shall be registered in the name of Cede & Co.,
nominee of the Depository Trust Company ("DTC"), and issued not later than two
full business days prior to the Closing Date (as defined below) or, if
applicable, each Option Closing Date (as defined below). The Global Certificate
shall be made available to you for inspection not later than 9:30 A.M., New York
3
<PAGE>
City time, on the business day prior to the Closing Date or, if applicable, each
Option Closing Date, at the office of DTC or its designated custodian (the
"Designated Office"). The Global Certificate, or other form agreed to in the
alternative, evidencing the Securities, shall be delivered to Donaldson, Lufkin
& Jenrette Securities Corporation through the facilities of DTC or the
Designated Office on the Closing Date or, if applicable, each Option Closing
Date, with any transfer taxes thereon duly paid by the Company, for the
respective accounts of the several Underwriters, against payment to the Company
of the Purchase Price therefore by wire transfer of Federal or other funds
immediately available in New York City. The time and date of delivery and
payment for the Firm Securities shall be 9:00 A.M., New York City time, on
________, 1998 or such other time on the same or such other date as Donaldson,
Lufkin & Jenrette Securities Corporation and the Company shall agree in writing.
The time and date of such delivery and payment are hereinafter referred to as
the "Closing Date". The time and date of delivery and payment for the
Additional Securities shall be 9:00 A.M., New York City time, on such date or
dates (each, an "Option Closing Date"), which may be the same as the Closing
Date, but shall in no event be earlier than the Closing Date, as shall be
specified in the applicable exercise notice given by you pursuant to Section 2.
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Securities may be varied by agreement between you
and the Company.
The documents to be delivered on the Closing Date on behalf of the parties
hereto pursuant to Section 8 of this Agreement shall be delivered at the offices
of Freeborn & Peters, 311 South Wacker Drive, Suite 3000, Chicago, Illinois
60606 and the Securities shall be delivered at the Designated Office, all on the
Closing Date or, if applicable, the Option Closing Date.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you up to four signed copies of the Registration Statement
as first filed with the Commission and of each amendment to it, including all
exhibits and documents incorporated therein by reference, and to furnish to you
and each Underwriter designated by you
4
<PAGE>
such number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits but including documents incorporated
therein by reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement (including,
without limitation, the issuance or filing of any term sheet within the meaning
of Rule 434 under the Act) to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object after being so
advised; and, during such period, to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or amendment or supplement (including, without limitation, the
issuance or filing of any term sheet within the meaning of Rule 434 under the
Act) to the Prospectus which may be necessary or advisable in connection with
the distribution of the Securities by you, and to use its best efforts to cause
any such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated herein by reference as such Underwriter or dealer
may reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to
5
<PAGE>
take any action that would subject it to general consent to service of process
or taxation other than as to matters and transactions relating to the
Prospectus, the Registration Statement, any preliminary prospectus or the
offering or sale of the Securities, in any jurisdiction in which it is not now
so subject.
(g) To mail and make generally available to its security holders as soon as
practicable an earnings statement covering the twelve-month period ending March
31, 1998 that shall satisfy the provisions of Section 11(a) of the Act, and to
advise you in writing when such statement has been so made available.
(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent public accountants and (ii) to mail and make generally available as
soon as practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated balance
sheet, a consolidated statement of operations and a consolidated statement of
cash flows (and similar financial reports of all unconsolidated subsidiaries, if
any) as of the end of and for such period, and for the period from the beginning
of such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(i) So long as the Securities are outstanding, to furnish to you as soon as
available copies of all reports or other communications furnished to its
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
reasonable expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Securities under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) all expenses in connection with the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in
6
<PAGE>
connection therewith (including the filing fees and fees and disbursements of
counsel for the Underwriters in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriters in connection with the review and
clearance of the offering of the Securities by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Securities and all costs and expenses incident to the listing of the Securities
on the Nasdaq SmallCap Market, (vii) the cost of printing certificates
representing the Securities, (viii) the costs and charges of any transfer agent,
registrar and/or depositary (including the Depository Trust Company), (ix) any
fees charged by rating agencies for the rating of the Securities, (x) the fees
and expenses of the Trustee and the Trustees counsel in connection with the
Indenture and the Securities and (xi) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section.
(k) To use its best efforts to list for quotation the Securities on the
Nasdaq SmallCap Market and to maintain the listing of the Securities on the
Nasdaq SmallCap Market for so long as the Securities are outstanding.
(l) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any warrants,
rights or options to purchase or otherwise acquire debt securities of the
Company substantially similar to the Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business), without
the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
(m) Not to voluntarily claim, and to actively resist any attempts to claim,
the benefit of any usury laws against the holders of the Securities.
(n) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date and to satisfy all conditions precedent to the delivery of the
Securities.
(o) If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
Section 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement;
7
<PAGE>
and no stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before or threatened
by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act; (ii) the
Registration Statement (other than any Rule 462(b) Registration Statement to be
filed by the Company after the effectiveness of this Agreement), when it became
effective, did not and, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement (other than any Rule 462(b) Registration Statement to
be filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, (iv) if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any amendments thereto, when they
become effective (A) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) will comply in all material
respects with the Act and (v) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Prospectus is not materially different from the prospectus included
in the Registration Statement at the time of its effectiveness (including the
information (if any) deemed to be part of the Registration Statement at the time
of effectiveness pursuant to Rule 430A under the Act); and the term sheet, if
any, that is included in the Prospectus sets forth all information material to
investors with respect to the offering of the Shares that is not disclosed in
the prospectus subject to completion that is included in the Prospectus.
(d) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
Act, and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in any preliminary
prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(e) Each of the Company and its subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business as described in the Prospectus and
8
<PAGE>
to own, lease and operate its properties, and each is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its subsidiary,
taken as a whole.
(f) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of the Company's
subsidiary have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature (each, a
"Lien").
(h) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Securities have been duly authorized and, on the Closing Date, will
have been validly executed and delivered by the Company. When the Securities
have been executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, the Securities will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors rights generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(j) The Securities conform as to legal matters to the description thereof
contained in the Prospectus.
(k) Neither the Company nor its subsidiary is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiary, taken as a whole, to which the Company or its
subsidiary is a party or by which the Company or its subsidiary or their
respective property is bound.
(l) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, the compliance by the Company with
all the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court
9
<PAGE>
or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or its subsidiary or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiary, taken as a whole, to which the Company or its
subsidiary is a party or by which the Company or its subsidiary or their
respective property is bound, (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, its subsidiary
or their respective property, (iv) result in the imposition or creation of (or
the obligation to create or impose) a Lien under any agreement or instrument to
which the Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound or (v) result in the
suspension, termination or revocation of any Authorization (as defined below) of
the Company or its subsidiary or any other impairment of the rights of the
holder of any such Authorization.
(m) There are no legal or governmental proceedings pending to which the
Company or its subsidiary is a party or to which any of their respective
property is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated; nor are
there any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not so described or filed as
required.
(n) Neither the Company nor its subsidiary has violated any foreign,
federal, state or local law or regulation relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), laws or regulations relating
to discrimination in the hiring, promotion or pay of employees (including
federal or state wages and hours laws) any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
material adverse effect on the business, prospects, financial condition or
results of operation of the Company and its subsidiary, taken as a whole.
(o) Each of the Company and its subsidiary has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiary, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Company and its subsidiary is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or, after
10
<PAGE>
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or its subsidiary; except where such failure to be
valid and in full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiary, taken as a
whole.
(p) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a whole.
(q) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of operation
of the Company, the Company has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not yet due
and payable, to all property and assets described in the Registration Statement
as being owned by it. All leases to which the Company is a party are valid and
binding and no default has occurred or is continuing thereunder, which would
reasonably be expected to result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company, and the
Company enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company.
(r) The Company maintains reasonably adequate insurance.
(s) This Agreement has been duly authorized, executed and delivered by the
Company.
(t) Price Waterhouse LLP are independent public accountants with respect to
the Company and its subsidiary as required by the Act.
(u) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiary on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the information required to be stated therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately
11
<PAGE>
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company.
(v) The Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(w) Except as disclosed in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Securities registered
pursuant to the Registration Statement.
(x) No "nationally recognized statistical rating organization" as such term
is defined for purposes of Rule 436(g)(2) under the Act has indicated to the
Company that it is considering (i) the downgrading, suspension or withdrawal of,
or any review for a possible change that does not indicate the direction of the
possible change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company or any
securities of the Company.
(y) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiary, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or its subsidiary and
(iii) neither the Company nor its subsidiary has incurred any material liability
or obligation, direct or contingent.
(z) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(aa) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company except as
otherwise disclosed in the Registration Statement.
(bb) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with managements 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 asset accountability; (iii) access to assets is permitted only in
accordance with managements general or specific authorization; and (iv) the
recorded accountability for assets
12
<PAGE>
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(cc) All material tax returns required to be filed by the Company and its
subsidiary in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or its subsidiary
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(dd) The Company has filed a registration statement pursuant to Section
12(g) of the Exchange Act to register the Common Stock, has filed an application
to list the Securities on The Nasdaq SmallCap Market and has received
notification that the listing has been approved, subject to notice of issuance
of the Securities.
(ee) The Company and its subsidiary own and possess all right, title and
interest in and to, or has duly licensed from third parties, all patents,
rights, trademarks, trade names, service marks, copyrights, inventions, know-how
(including trade secrets and other unprotected and/or unpatentable proprietary
or confidential information systems, procedures, processes, techniques and
substances) and other proprietary rights which are necessary for the conduct of
the business now operated by them as described in the Prospectus (collectively,
"Trade Rights"); no such Trade Rights as are material to the business of the
Company and its subsidiary expire or are subject to termination at the election
of another party without their consent at a time or under circumstances which
would reasonably be expected to have a material adverse effect upon the
business, prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole, and the Company and its subsidiary have
not granted any lien or encumbrance on, or granted any right of license (other
than in the ordinary course of its business) with respect to, any such Trade
Rights. The Company and its subsidiary have not received any notice of
infringement, misappropriation or conflict from any third party as to Trade
Rights that has not been resolved or disposed of and the Company and its
subsidiary have not infringed, misappropriated or otherwise conflicted with
Trade Rights of any third parties, which infringement, misappropriation or
conflict, singly or in the aggregate, would reasonably be expected to have a
material adverse effect upon the business, prospects, financial condition or
results of operations of the Company and its subsidiary, taken as a whole.
(ff) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
Section 7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its
directors, its officers and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
13
<PAGE>
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus, as then
amended or supplemented, (so long as the Prospectus and any amendment or
supplemented thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgements caused by any untrue statement or alleged untrue
statement of a material fact contained in the preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory
14
<PAGE>
to the indemnified party or (iii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation, in the case of parties
indemnified pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company 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 judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in
15
<PAGE>
the table on the cover page of the Prospectus. The relative fault of the
Company on the one hand and 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 or the
Underwriters and the parties relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
Section 8. Conditions of Underwriters Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions on the
Closing Date and, as applicable, each Option Closing Date:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date and each Option Closing
Date, if applicable, with the same force and effect as if made on and as of the
Closing Date or Option Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and at the Closing Date or Option Closing Date, if
applicable, no stop order suspending the effectiveness of the
16
<PAGE>
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Securities than that on which the Securities were marketed.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Peter Mason and Eric Loughmiller, in their capacities as
the Chief Executive Officer and Chief Financial Officer of the Company,
confirming the matters set forth in Sections 6(y), 8(a), 8(b) and 8(c) and that
the Company has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by the
Company on or prior to the Closing Date or Option Closing Date, if applicable.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations, whether or not arising in the ordinary
course of business, of the Company and its subsidiary, taken as a whole, (ii)
there shall not have been any change or any development involving a prospective
change in the capital stock or in the long-term debt of the Company or its
subsidiary and (iii) neither the Company nor its subsidiary shall have incurred
any liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment,
is material and adverse and, in your judgment, makes it impracticable to market
the Securities on the terms and in the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters), dated the Closing Date, of Freeborn &
Peters, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties;
17
<PAGE>
(ii) each of the Company and its subsidiaries is duly qualified and is
in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the Company
and its subsidiary, taken as a whole;
(iii) all the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights granted by the Company
under its Certificate of Incorporation or by-laws or any contract known to
such counsel;
(iv) all of the outstanding shares of capital stock of the Company's
subsidiary have been duly authorized and validly issued and are fully paid
and non-assessable, and are owned by the Company free and clear of any
Lien;
(v) the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vi) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(vii) this Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms (except as rights to indemnity and
contribution hereunder may be limited by applicable law);
(viii) the Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's knowledge
after due inquiry, pending before or contemplated by the Commission;
(ix) the statements under the captions "Management -- Director
Compensation", "-- Indemnification and Limitation of Liabilities",
"-- Stock Option Plans", "-- Employee Stock Ownership Plan" and
"-- Employment Agreements" in the Company's Annual Report for the year
ended September 30, 1997, "Shares Eligible For Future Sale" in
_________________, "Description of Capital Stock," "Description of
18
<PAGE>
the Notes" and "Underwriting" in the Prospectus and Item 15 of Part II of
the Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings;
(x) the statements under the caption "Certain United States Federal
Income Tax Considerations" in the Prospectus, insofar as such statements
constitute a summary of the United States federal tax laws referred to
therein, are accurate and fairly summarize in all material respects the
United States federal tax laws referred to therein;
(xi) neither the Company nor its subsidiary is in violation of its
respective charter or by-laws and, to the best of such counsel's knowledge
after due inquiry, neither the Company nor its subsidiary is in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiary,
taken as a whole, to which the Company or its subsidiary is a party or by
which the Company or its subsidiary or their respective property is bound;
(xii) the execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, the compliance by the Company
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (A) require any
consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or its subsidiary or
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or its subsidiary is a party or by which the
Company or its subsidiary or their respective property is bound, (C)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over the Company, its subsidiary or their respective
property, (D) result in the imposition or creation of (or the obligation to
create or impose) a Lien under any agreement or instrument to which the
Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound or (E) result in the
suspension, termination or revocation of any Authorization of the Company
or its subsidiary or any other impairment of the rights of the holder of
any such Authorization;
(xiii) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or its
subsidiary is or could be a party or to which any of their respective
property is or could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described, or of
any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so described
or filed as required;
19
<PAGE>
(xiv) to the best of such counsel's knowledge, after due inquiry,
neither the Company nor its subsidiary has violated any Environmental Law,
any provisions of the Employee Retirement Income Security Act of 1974, as
amended, any federal or state law relating to discrimination in the hiring,
promotion or pay of employees or any federal or state wages and hours laws,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiary, taken as a whole;
(xv) each of the Company and its subsidiary has such Authorizations
of, and has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all courts and
other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure
to have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiary, taken as a whole; each such Authorization is
valid and in full force and effect and each of the Company and its
subsidiary is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or its subsidiary; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiary, taken as a whole;
(xvi) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(xvii) to the best of such counsel's knowledge after due inquiry,
there are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities
of the Company or to require the Company to include such securities with
the Securities registered pursuant to the Registration Statement other than
as disclosed in the Registration Statement; and
20
<PAGE>
(xviii) (A) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with the Exchange
Act; (B) the Registration Statement and the Prospectus and any supplement
or amendment thereto (except for the financial statements and other
financial data included therein as to which no opinion need be expressed)
comply as to form with the Act, (C) such counsel has no reason to believe
that at the time the Registration Statement became effective or on the date
of this Agreement, the Registration Statement and the prospectus included
therein (except for the financial statements and other financial data as to
which such counsel need not express any belief and except for that part of
the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act) contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (D)
such counsel has no reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial statements and other
financial data, as aforesaid) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the Prospectus is not materially different from
the prospectus included in the Registration Statement at the time of its
effectiveness (including the information (if any) deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A
under the Act).
The opinion of Freeborn & Peters, described in Section 8(f) above shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Katten Muchin & Zavis, counsel for the Underwriters, as to the
matters referred to in Sections 8(f)(v), 8(f)(vi), 8(f)(vii) and 8(f)(ix) (but
only with respect to the statements under the caption "Description of the Notes"
and "Underwriting") and clauses 8(f)(xviii)(C) and 8(f)(xviii)(D).
In giving such opinions with respect to the matters covered by Section
8(f)(xviii), Freeborn & Peters may state that their opinion and belief are based
upon their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents incorporated
therein by reference and review and discussion of the contents thereof, but is
without independent check or verification except as specified. In giving such
opinions with respect to the matters covered by clauses 8(f)(xviii)(C) and
8(f)(xviii)(D) above, Katten Muchin & Zavis may state that their opinion and
belief are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (other than
the documents incorporated therein by reference) and review and discussion of
the contents thereof (including the documents incorporated therein by
reference), but are without independent check or verification except as
specified.
(h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Price Waterhouse LLP, independent
public accountants, containing the information
21
<PAGE>
and statements of the type ordinarily included in accountants' "comfort letters"
to Underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Registration
Statement and the Prospectus.
(i) The Securities shall have been duly listed for quotation on the Nasdaq
SmallCap Market.
(j) The Securities shall have been rated " " by [Standard & Poor's
Corporation] and " " by [Moody's Investors Service, Inc.]
(k) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(l) The Company shall not have failed on or prior to the Closing Date of,
if applicable, the Option Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company on or prior to the Closing Date or Option Closing Date.
Section 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or its subsidiary or the earnings, affairs, or business prospects
of the Company or its subsidiary, whether or not arising in the ordinary course
of business, which would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Securities
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iv) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (v) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiary, taken as a whole, (vi) the declaration of a banking moratorium by
either federal or New York State authorities or (vii) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
22
<PAGE>
If on the Closing Date or any Option Closing Date, if applicable, any one
or more of the Underwriters shall fail or refuse to purchase the Securities
which it or they have agreed to purchase hereunder on such date and the
aggregate principal amount of Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of Securities to be purchased on such date by
all Underwriters, each non-defaulting Underwriter shall be obligated severally,
in the proportion which the principal amount of Firm Securities set forth
opposite its name in Schedule I bears to the aggregate principal amount of
Securities which all the non-defaulting Underwriters have agreed to purchase, or
in such other proportion as you may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the aggregate principal
amount of Securities which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such principal amount of Securities without the written consent
of such Underwriter. If on the Closing Date or an Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date or an Option
Closing Date, if applicable, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to May &
Speh, Inc., 1501 Opus Place, Downers Grove, Illinois 60515, Attention: Andy V.
Jonusaitis and (ii) if to any Underwriter or to you, to you c/o Donaldson,
Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York
10172, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses
23
<PAGE>
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(j) hereof.
The Company also agrees to reimburse the several Underwriters, their directors
and officers and any persons controlling any of the Underwriters for any and all
fees and expenses (including, without limitation, the fees disbursements of
counsel) incurred by them in connection with enforcing their rights hereunder
(including, without limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
24
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
MAY & SPEH, INC.
By: ________________________________
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: __________________________
25
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Principal Amount
of Securities
Underwriters to be Purchased
- -------------------------------------------------- --------------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
ABN AMRO Incorporated
-------------
Total
=============
</TABLE>
26
<PAGE>
4,000,000 Shares
MAY & SPEH, INC.
(a Delaware corporation)
Common Stock
UNDERWRITING AGREEMENT
----------------------
March __, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
The stockholders of May & Speh, Inc., a Delaware corporation ("the
Company"), named in Schedule II hereto (collectively, the "Selling
Stockholders"), severally propose to sell an aggregate of 4,000,000 shares of
Common Stock, par value $.01 per share, of the Company (the "Firm Shares"), to
the several underwriters named in Schedule I hereto (the "Underwriters"). The
Company also proposes to issue and sell to the several Underwriters not more
than 600,000 additional shares of Common Stock, par value $.01 per share, of the
Company (the "Additional Shares"), if requested by the Underwriters as provided
in Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively called the Shares. The shares of Common Stock of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock." The Company and the Selling Stockholders are
hereinafter sometimes referred to collectively as the "Sellers."
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions
<PAGE>
of the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-3, including a prospectus, relating to the Shares. The registration
statement, as amended at the time it became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Act, is hereinafter
referred to as the "Registration Statement"; and the prospectus, including any
the prospectus subject to completion and the term sheet, taken together, as
described in Rule 434(a)(1) under the Act, in the form first used to confirm
sales of Shares is hereinafter referred to as the "Prospectus" (including, in
the case of all references to the Registration Statement or the Prospectus,
documents incorporated therein by reference). If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement. The terms "supplement" and "amendment"
or "amend" as used in this Agreement with respect to the Registration Statement
or the Prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, (i) each Selling Stockholder agrees, severally and not jointly, to
sell the number of Firm Shares set forth opposite such Selling Stockholder's
name in Schedule II hereto and (ii) each Underwriter agrees, severally and not
jointly, to purchase from each Selling Stockholder at a price per share of
$______ (the "Purchase Price") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to _______ Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. The Underwriters may exercise their right to purchase
Additional Shares in whole or in part from time to time by giving written notice
thereof to the Company within 30 days after the date of this Agreement. You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Shares to be purchased pursuant to
such exercise and the date for payment and delivery thereof. The date specified
in any such notice shall be a business day (i) no earlier than the Closing Date
(as hereinafter defined), (ii) no later than ten business days after such notice
has been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the
-2-
<PAGE>
Company the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
The Selling Stockholders hereby agree, severally and not jointly, not to
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Common Stock (regardless of whether any of
the transactions described in clause (i) or (ii) is to be settled by the
delivery of Common Stock, or such other securities, in cash or otherwise),
except to the Underwriters pursuant to this Agreement, for a period of 180 days
after the date of the Prospectus without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation. The Company hereby agrees not to
engage in the transactions described in clause (i) and (ii) above, except to the
Underwriters pursuant to this Agreement, for a period of 90 days after the date
of the Prospectus without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's stock
option and stock ownership plans existing on the date hereof, (ii) the Company
may issue shares of Common Stock upon the exercise of an option or warrant
outstanding on the date hereof, (iii) the May & Speh, Inc. Employee Stock
Ownership Plan (the "ESOP") may distribute shares of Common Stock to
participants or beneficiaries of the ESOP, and/or may sell, pledge, contract to
sell or otherwise dispose of any shares of Common Stock in order to make cash
distributions to participants or beneficiaries of the ESOP, in accordance with
the terms of the plan and trust documents governing the ESOP, and (iv) Selling
Stockholders who are individuals may transfer shares of Common Stock to members
of their immediate family or to trusts for the benefit of such Selling
Stockholders or trusts for the benefit of members of their immediate family,
provided such transferees agree in writing to be bound by the transfer
restrictions set forth herein.
The Company also agrees not to file any registration statement with respect
to any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock (other than a registration statement on Form S-
8 relating to the Company's stock option plans currently in effect) for a period
of 90 days after the date of the Prospectus without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation. In addition, each Selling
Stockholder agrees that, for a period of 180 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
The Company shall, prior to or concurrently with the execution of this
Agreement, deliver an agreement executed by (i) each Selling Stockholder and
(ii) each of the directors and officers of the Company who is not a Selling
Stockholder to the effect that such person will not, during the period
commencing on the date such person signs such agreement and ending 180
-3-
<PAGE>
days after the date of the Prospectus (with respect to the Selling Stockholders)
and ending 90 days after the date of the Prospectus (with respect to each of the
directors and officers who is not a Selling Stockholder), without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation, (A)
engage in any of the transactions described in the first sentence of the
immediately preceding paragraph or (B) make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
3. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the execution and delivery of this Agreement as in
your judgment is advisable and (ii) initially to offer the Shares upon the terms
set forth in the Prospectus.
4. Delivery and Payment. The Shares shall be represented by definitive
certificates and shall be issued in such authorized denominations and registered
in such names as Donaldson, Lufkin & Jenrette Securities Corporation shall
request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Shares shall be delivered by or on behalf of the Sellers, with any transfer
taxes thereon duly paid by the respective Sellers, to Donaldson, Lufkin &
Jenrette Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefore by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of delivery and payment for the Firm Shares shall be made at 9:00 A.M.,
New York City time, on ________, 1998, or such other time on the same or such
other date as Donaldson, Lufkin & Jenrette Securities Corporation and the
Company shall agree in writing. The time and date of delivery and payment for
the Firm Shares are hereinafter referred to as the "Closing Date". The time and
date of delivery and payment for any Additional Shares to be purchased by the
Underwriters shall be made at 9:00 A.M., New York City time, on the date
specified in the applicable exercise notice given by you pursuant to Section 2,
or such other time on the same or such other date as Donaldson, Lufkin &
Jenrette Securities Corporation and the Company shall agree in writing. The
time and date of delivery and payment for any Additional Shares are hereinafter
referred to as the "Option Closing Date".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 9 of this Agreement
shall be delivered at the offices of Freeborn & Peters, 311 South Wacker Drive,
Chicago, Illinois 60606, and the Shares shall be delivered at the Designated
Office, all on the Closing Date or such Option Closing Date, as the case may be.
-4-
<PAGE>
5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes,
(iii) when any amendment to the Registration Statement becomes effective,
(iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective and (v) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) To furnish you up to four signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits and documents incorporated therein by reference, and
to furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits but including documents incorporated
therein by reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any
amendment or supplement (including, without limitation, the issuance or
filing of any term sheet within the meaning of Rule 434 under the Act) to
the Prospectus of which you shall not previously have been advised or to
which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
amendment or supplement (including, without limitation, the issuance or
filing of any term sheet within the meaning of Rule 434 under the Act) to
the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any
such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered
-5-
<PAGE>
in connection with sales by an Underwriter or a dealer, to furnish in New
York City to each Underwriter and any dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) and any
documents incorporated therein by reference as such Underwriter or dealer
may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such registration or
qualification in effect so long as required for distribution of the Shares
and to file such consents to service of process or other documents as may
be necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation in any jurisdiction in which
it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters
and transactions relating to the Prospectus, the Registration Statement,
any preliminary prospectus or the offering or sale of the Shares, in any
jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon
as practicable an earnings statement covering the twelve-month period
ending March 31, 1998 that shall satisfy the provisions of Section 11(a) of
the Act, and to advise you in writing when such statement has been so made
available.
(h) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Common Stock a financial report of the
Company and its subsidiaries, if any, on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all
such financial reports to include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of
and for such fiscal year, together with
-6-
<PAGE>
comparable information as of the end of and for the preceding year,
certified by independent certified public accountants, and (ii) to make
generally available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to such
holders, summary financial statements as of the end of and for such period,
and for the period from the beginning of such year to the close of such
quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(i) During the period referred to in paragraph (h), to furnish to you
as soon as available copies of all reports or other communications
furnished to the record holders of Common Stock or furnished to or filed
with the Commission or any national securities exchange on which any class
of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and any Selling Stockholder's
counsel (in addition to the Company's counsel) in connection with the
registration and delivery of the Shares under the Act and all other fees
and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements
and exhibits), any preliminary prospectus, the Prospectus and all
amendments and supplements to any of the foregoing, including the mailing
and delivering of copies thereof to the Underwriters and dealers in the
quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares,
(iv) all expenses in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the
filing fees and fees and disbursements of counsel for the Underwriters in
connection with such registration or qualification and memoranda relating
thereto), (v) the filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of
the Shares by the National Association of Securities Dealers, Inc., (vi)
all costs and expenses incident to the listing of the Shares on the Nasdaq
National Market, (vii) the cost of printing certificates representing the
Shares, (viii) the costs and charges of any transfer agent, registrar
and/or depositary, and (ix) all other costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders
hereunder for which provision is not otherwise made in this Section.
-7-
<PAGE>
(k) To use its best efforts to maintain the inclusion of the Common
Stock on The Nasdaq National Market (or on a national securities exchange)
for a period of five years after the effective date of the Registration
Statement.
(l) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
(m) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
6. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) the Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement;
and no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act;
(ii) each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act; (iii) the
Registration Statement (other than any Rule 462(b) Registration Statement
to be filed by the Company after the effectiveness of this Agreement), when
it became effective, did not and, as amended, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (iv) the Registration Statement (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with
the Act, (v) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become
effective (A) will not contain any untrue statement of a material fact
-8-
<PAGE>
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (B) will comply in all
material respects with the Act and (v) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Prospectus is not materially different from the prospectus
included in the Registration Statement at the time of its effectiveness
(including the information (if any) deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A under the
Act); and the term sheet, if any, that is included in the Prospectus sets
forth all information material to investors with respect to the offering of
the Shares that is not disclosed in the prospectus subject to completion
that is included in the Prospectus.
(d) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(e) Each of the Company and its subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing
as a foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified
would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiary, taken as a whole.
(f) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling
any person to purchase or otherwise to acquire any shares of the capital
stock of the Company or any of its subsidiaries, except as otherwise
disclosed in the Registration Statement.
-9-
<PAGE>
(g) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be
issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by
this Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor its subsidiary is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiary, taken as a whole, to which the
Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound.
(j) The execution, delivery and performance of this Agreement, the
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby and thereby will not
(i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or
its subsidiary or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiary,
taken as a whole, to which the Company or its subsidiary is a party or by
which the Company or its subsidiary or their respective property is bound,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over the Company, its subsidiary or their respective
property, (iv) result in the imposition or creation of (or the obligation
to create or impose) a Lien under any agreement or instrument to which the
Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound or (v) result in the
suspension, termination or revocation of any Authorization (as defined
below) of the Company or its subsidiary or any other impairment of the
rights of the holder of any such Authorization.
(k) There are no legal or governmental proceedings pending to which
the Company or its subsidiary is a party or to which any of their
respective property is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration
-10-
<PAGE>
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required.
(l) Neither the Company nor its subsidiary has violated any foreign,
federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), laws or
regulations relating to discrimination in the hiring, promotion or pay of
employees (including federal or state wages and hours laws) any provisions
of the Employee Retirement Income Security Act of 1974, as amended, or any
provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of the
Company and its subsidiary, taken as a whole.
(m) Each of the Company and its subsidiary has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each,
an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations
and all courts and other tribunals, including, without limitation, under
any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except
where the failure to have any such Authorization or to make any such filing
or notice would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiary, taken as a whole. Each such
Authorization is valid and in full force and effect and each of the Company
and its subsidiary is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or its subsidiary; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiary, taken as a whole.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect
-11-
<PAGE>
on the business, prospects, financial condition or results of operations of
the Company and its subsidiary, taken as a whole.
(o) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operation of the Company, the Company has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except liens
for taxes not yet due and payable, to all property and assets described in
the Registration Statement as being owned by it. All leases to which the
Company is a party are valid and binding and no default has occurred or is
continuing thereunder, which would reasonably be expected to result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company, and the Company enjoys peaceful and
undisturbed possession under all such leases to which it is a party as
lessee with such exceptions as do not materially interfere with the use
made by the Company.
(p) The Company maintains reasonably adequate insurance.
(q) This Agreement has been duly authorized, executed and delivered by
the Company.
(r) Price Waterhouse LLP are independent public accountants with
respect to the Company and its subsidiary as required by the Act.
(s) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
together with related schedules and notes, present fairly the consolidated
financial position, results of operations and changes in financial position
of the Company and its subsidiary on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; the
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with generally accepted accounting principles
the information required to be stated therein; and the other financial and
statistical information and data set forth in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
(t) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
-12-
<PAGE>
(u) Except as disclosed in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(v) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiary, taken as a whole, (ii) there
has not been any material adverse change or any development involving a
prospective material adverse change in the capital stock or in the long-
term debt of the Company or its subsidiary and (iii) neither the Company
nor its subsidiary has incurred any material liability or obligation,
direct or contingent.
(w) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(x) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with managements 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 asset accountability; (iii) access to assets is
permitted only in accordance with managements general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y) All material tax returns required to be filed by the Company and
its subsidiary in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received
by the Company or its subsidiary have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(z) The Company and its subsidiary own and possess all right, title
and interest in and to, or has duly licensed from third parties, all
patents, rights, trademarks, trade names, service marks, copyrights,
inventions, know-how (including trade secrets and other unprotected and/or
unpatentable proprietary or confidential information systems, procedures,
processes, techniques and substances) and other proprietary rights which
are necessary for the conduct of the business now operated by them as
described in the Prospectus (collectively, "Trade Rights"); no such Trade
Rights as are material to the business of the Company and its subsidiary
expire or are subject to termination at the
-13-
<PAGE>
election of another party without their consent at a time or under
circumstances which would reasonably be expected to have a material adverse
effect upon the business, prospects, financial condition or results of
operations of the Company and its subsidiary, taken as a whole, and the
Company and its subsidiary have not granted any lien or encumbrance on, or
granted any right of license (other than in the ordinary course of its
business) with respect to, any such Trade Rights. The Company and its
subsidiary have not received any notice of infringement, misappropriation
or conflict from any third party as to Trade Rights that has not been
resolved or disposed of and the Company and its subsidiary have not
infringed, misappropriated or otherwise conflicted with Trade Rights of any
third parties, which infringement, misappropriation or conflict, singly or
in the aggregate, would reasonably be expected to have a material adverse
effect upon the business, prospects, financial condition or results of
operations of the Company and its subsidiary, taken as a whole.
(aa) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
7. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder severally represents and warrants (except with respect to
7(b), 7(c) and 7(e) below, which shall not be made by the ESOP) to each
Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on
the Closing Date will have, good and clear title to such Shares, free of
all restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever.
(b) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed
by such Selling Stockholder and _______________________, as Custodian,
relating to the deposit of the Shares to be sold by such Selling
Stockholder (the "Custody Agreement") and the Power of Attorney of such
Selling Stockholder appointing certain individuals as such Selling
Stockholder's attorneys-in-fact (the "Attorneys") to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement (the "Power of Attorney")
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder in the manner provided herein and therein.
(c) The Power of Attorney of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder, enforceable in
accordance with its terms, and, pursuant to such Power of Attorney, such
Selling Stockholder has, among other things, authorized the Attorneys, or
any one of them, to execute and deliver on such Selling Stockholder's
behalf this Agreement and any other document that they, or any one of
-14-
<PAGE>
them, may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
(d) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(e) The Custody Agreement of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by applicable law.
(f) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, the Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares.
(g) Upon delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(h) The execution, delivery and performance of this Agreement and, to
the extent applicable, the Custody Agreement and Power of Attorney of such
Selling Stockholder by or on behalf of such Selling Stockholder, the
compliance by such Selling Stockholder with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such as may be required under the Act or securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the organizational
documents of such Selling Stockholder, if such Selling Stockholder is not
an individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any property of such Selling Stockholder
is bound or (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over such Selling Stockholder or any property
of such Selling Stockholder.
(i) The information in the Registration Statement under the captions
"Principal Stockholders" and "Selling Stockholders" which specifically
relates to such Selling
-15-
<PAGE>
Stockholder does not, and will not on the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(j) At any time during the period described in paragraph 5(d) hereof,
if there is any change in the information referred to in paragraph 7(j)
above, such Selling Stockholders will immediately notify you of such
change.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action, that could give rise to any
such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), the Prospectus
(or any amendment or supplement thereto) or any preliminary prospectus, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished in writing to the Company by such Underwriter through
you expressly for use therein provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter who failed to deliver a Prospectus,
as then amended or supplemented, (so long as the Prospectus and any
amendment or supplement thereto was provided by the Company to the several
Underwriters in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages, liabilities or judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in such
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such material misstatement
or omission or alleged material misstatement or omission was cured in the
Prospectus, as so amended or supplemented, and such Prospectus was required
by law to be delivered at or prior to the written confirmation of sale to
such person.
(b) The Selling Stockholders, severally and not jointly, agree to
indemnify and hold harmless each Underwriter, its directors, its officers
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages, liabilities and
-16-
<PAGE>
judgments (including, without limitation, any legal or other expenses
reasonably incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished in writing to the Company by such Underwriters
through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter who failed to deliver a
Prospectus, as then amended or supplemented, (so long as the Prospectus and
any amendment or supplement thereto was provided by the Company to the
several Underwriters in the requisite quantity and on timely basis to
permit proper delivery on or prior the Closing Date) to the person
asserting any losses, claims, damages, liabilities or judgments caused by
any untrue statement or alleged untrue statement of a material fact
contained in such preliminary prospectus, or caused by an omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and
such Prospectus was required by law to be delivered at or prior to the
written confirmation of sale to such person; and provided, further,
however, that such Selling Stockholder will be liable hereunder in such
case only if and to the extent that such loss, claim, damage, liability or
judgment arises out of or is based upon (a) information pertaining to the
Selling Stockholder furnished by or on behalf of the Selling Stockholder
expressly for use in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus or (b) facts that would constitute a breach of any
representation or warranty of such Selling Stockholder set forth in Section
7 hereof. Notwithstanding the foregoing, the aggregate liability of any
Selling Stockholder pursuant to this Section 8(b) shall be limited to an
amount equal to the total proceeds received by such Selling Stockholder
from the Underwriters for the sale of the Shares sold by such Selling
Stockholder hereunder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, each Selling Stockholder and each person, if any, who controls such
Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from
the Sellers to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Company by such
Underwriter through you
-17-
<PAGE>
expressly for use in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a), 8(b) or
8(c) (the "Indemnified Party"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "Indemnifying
Party") in writing and the indemnifying party shall assume the defense of
such action, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to each of Sections 8(a), 8(b) and
8(c), the Underwriter shall not be required to assume the defense of such
action pursuant to this Section 8(d), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action
or employ counsel reasonably satisfactory to the indemnified party or (iii)
the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
(i) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
(ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers
who sign the Registration Statement and all persons, if any, who control
the Company within the meaning of either such Section and (iii) the fees
and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all Selling Stockholders and all persons, if any,
who control any Selling Stockholder within the meaning of either such
Section, and all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters,
their officers and directors and such control persons of any Underwriters,
such firm shall be designated in writing by Donaldson, Lufkin & Jenrette
Securities Corporation. In the case of any such separate firm for the
Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of
any such separate firm for the Selling Stockholders and
-18-
<PAGE>
such control persons of any Selling Stockholders, such firm shall be
designated in writing by the Attorneys. The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii)
effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any
pending or threatened action in respect of which the indemnified party is
or could have been a party and indemnity or contribution may be or could
have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability on claims that are or could
have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of the indemnified party.
(e) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities and judgments in such
proportion as is appropriate to reflect the relative benefits received by
the Sellers on the one hand and the Underwriters on the other hand from the
offering of the Shares and also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters
on the other hand shall be deemed to be in the same proportion as the total
net proceeds from the offering (after deducting underwriting discounts and
commissions, but before deducting expenses) received by the Company and the
Selling Stockholders, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue 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 or the Selling
Stockholders on the one hand or the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
-19-
<PAGE>
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
incurred by such indemnified party in connection with investigating or
defending any matter, including any action, that could have given rise to
such losses, claims, damages, liabilities or judgments. Notwithstanding
the provisions of this Section 8, the aggregate contribution of any Selling
Stockholder shall be limited to an amount equal to the total proceeds
received by such Selling Stockholder from the Underwriters for the sale of
the Shares sold by such Selling Stockholder hereunder and such Selling
Stockholder shall not be required to contribute in respect of any losses,
claims, damages, liabilities or judgments (or expenses incurred in
connection therewith) unless the same arise with respect to (a) information
pertaining to the Selling Stockholder furnished by or on behalf of the
Selling Stockholder expressly for use in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus or (b) facts that would constitute a breach
of any representation or warranty of such Selling Stockholder set forth in
Section 7 hereof. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8(e) are
several in proportion to the respective number of Shares purchased by each
of the Underwriters hereunder and not joint.
(f) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) Each Selling Stockholder hereby designates __________________, as
its authorized agent, upon which process may be served in any action which
may be instituted in any state or federal court in the State of New York by
any Underwriter, any director or officer of any Underwriter or any person
controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each Selling
Stockholder will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense
based upon lack
-20-
<PAGE>
of personal jurisdiction or venue. A copy of any such process shall be
sent or given to such Selling Stockholder, at the address for notices
specified in Section 12 hereof.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares under this Agreement are subject to the
satisfaction of each of the following conditions on each Closing Date and, as
applicable, on each Option Closing Date:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date and on each
Option Closing Date, if applicable, with the same force and effect as if
made on and as of the Closing Date or Option Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and at the Closing Date or Option
Closing Date, if applicable, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for
that purpose shall have been commenced or shall be pending before or
contemplated by the Commission.
(c) You shall have received on the Closing Date and on each Option
Closing Date, if applicable, a certificate dated the Closing Date or Option
Closing Date, signed by Peter Mason and Eric Loughmiller, in their
capacities as the Chief Executive Officer and Chief Financial Officer of
the Company, confirming the matters set forth in Sections 6(v), 9(a) and
9(b) and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be
complied with or satisfied by the Company on or prior to the Closing Date
or Option Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or
the earnings, business, management or operations, whether or not arising in
the ordinary course of business, of the Company and its subsidiary, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term
debt of the Company or its subsidiary and (iii) neither the Company nor its
subsidiary shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause
9(a)(i), 9(d)(ii) or 9(d)(iii) is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.
-21-
<PAGE>
(e) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received on the Closing Date a certificate dated the Closing
Date by or on behalf of each Selling Stockholder to such effect and to the
effect that such Selling Stockholder has complied with all of the
agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied by such Selling Stockholder on or
prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Freeborn & Peters counsel for the Company, to the effect that:
(i) each of the Company and its subsidiary has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) each of the Company and its subsidiary is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the Company and its subsidiary, taken as a whole;
(iii) all the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholders)
have been duly authorized and validly issued and are fully paid, non-
assessable and not subject to any preemptive or similar rights;
(iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or
similar rights granted by the Company under its Certificate of
Incorporation or by-laws or any contract known to such counsel;
(v) all of the outstanding shares of capital stock of the
Company's subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable, and are owned by the Company, free
and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature;
-22-
<PAGE>
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms except whether such
enforcement is considered in a proceeding in equity or at law and (ii)
as rights to indemnity and contribution hereunder may be limited by
applicable law;
(vii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(viii) the Registration Statement has become effective under
the Act, no stop order suspending its effectiveness has been issued
and no proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before or contemplated by the
Commission;
(ix) the statements under the captions "Management -- Director
Compensation", "-- Indemnification and Limitation of Liabilities",
"-- Stock Option Plans", "-- Employee Stock Ownership Plan" and
"-- Employment Agreements" in the Company's Annual Report for the
year ended September 30, 1997, "Shares Eligible For Future Sale" in
_________________, "Description of Capital Stock" and "Underwriting"
in the Prospectus and Item 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings;
(x) neither the Company nor its subsidiary is in violation of
its respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor its subsidiary is
in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company
and its subsidiary, taken as a whole, to which the Company or its
subsidiary is a party or by which the Company or its subsidiary or
their respective property is bound;
(xi) the execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (B)
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or its
subsidiary or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the
-23-
<PAGE>
Company or its subsidiary is a party or by which the Company or its
subsidiary or their respective property is bound, (C) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, its subsidiary or their respective
property, (D) result in the imposition or creation of (or the
obligation to create or impose) a Lien under any agreement or
instrument to which the Company or its subsidiary is a party or by
which the Company or its subsidiary or their respective property is
bound or (E) result in the suspension, termination or revocation of
any Authorization of the Company or its subsidiary or any other
impairment of the rights of the holder of any such Authorization;
(xii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or its subsidiary is or could be a party or to which any of
their respective property is or could be subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described, or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required;
(xiii) to the best of such counsel's knowledge, after due
inquiry, neither the Company nor its subsidiary has violated any
Environmental Law, any provisions of the Employee Retirement Income
Security Act of 1974, as amended, any federal or state law relating to
discrimination in the hiring, promotion or pay of employees or any
federal or state wages and hours laws, or any provisions of the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a material adverse effect on the business,
prospects, financial condition or results of operation of the Company
and its subsidiary, taken as a whole;
(xiv) each of the Company and its subsidiary has such
Authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly
or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company
and its subsidiary, taken as a whole; each such Authorization is valid
and in full force and effect and each of the Company and its
subsidiaries is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no
event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which
-24-
<PAGE>
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or its subsidiary; except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiary,
taken as a whole;
(xv) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(xvi) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with
respect to any securities of the Company or to require the Company to
include such securities with the Securities registered pursuant to the
Registration Statement other than as disclosed in the Registration
Statement; and
(xvii) (A) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act; (B) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for the
financial statements and other financial data included therein as to
which no opinion need be expressed) comply as to form with the Act,
(C) such counsel has no reason to believe that at the time the
Registration Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus included
therein (except for the financial statements and other financial data
as to which such counsel need not express any belief) contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (D) such counsel has no reason to believe
that the Prospectus as of its date, as amended or supplemented, if
applicable (except for the financial statements and other financial
data, as aforesaid) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and the Prospectus is not materially
different from the prospectus included in the Registration Statement
at the time of its effectiveness (including
-25-
<PAGE>
the information (if any) deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A under the
Act).
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters) dated the Closing
Date, of each of Bell, Boyd & Lloyd, counsel to the Selling Stockholders
other than ESOP, and Mayer, Brown & Platt, counsel to the ESOP (but only
with respect to (i), (ii), (iii), (vi) and (vii)) to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and is a valid
and binding agreement of each Selling Stockholder enforceable in
accordance with its terms except (i) to the extent that enforcement
thereof may be limited by (A) bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance and other laws of
general applicability relating to or affecting creditors' rights and
(B) general principles of equity, whether such enforcement is
considered in a proceeding in equity or at law and (ii) as rights to
indemnity and contribution hereunder may be limited by applicable law;
(ii) each Selling Stockholder is the lawful owner of the
Shares to be sold by such Selling Stockholder pursuant to this
Agreement and has good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever;
(iii) each Selling Stockholder has full legal right, power
and authority, and all authorization and approval required by law
(other than any approval imposed by the Act or applicable state
securities or Blue Sky laws), to enter into this Agreement and, to the
extent applicable, the Custody Agreement and the Power of Attorney of
such Selling Stockholder and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner provided
herein and therein;
(iv) the Custody Agreement of each Selling Stockholder has
been duly authorized, executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms;
(v) the Power of Attorney of each Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder
and is a valid and binding instrument of such Selling Stockholder,
enforceable in accordance with its terms, and, pursuant to such Power
of Attorney, such Selling Stockholder has, among other things,
authorized the Attorneys, or any one of them, to execute and deliver
on such Selling Stockholder's behalf this Agreement and any other
document they, or any one of them, may deem necessary or desirable in
-26-
<PAGE>
connection with the transactions contemplated hereby and thereby and
to deliver the Shares to be sold by such Selling Stockholder pursuant
to this Agreement;
(vi) upon delivery of and payment for the Shares to be sold by
each Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever; and
(vii) the execution, delivery and performance of this
Agreement and, to the extent applicable, the Custody Agreement and
Power of Attorney of each Selling Stockholder by such Selling
Stockholder, the compliance by such Selling Stockholder with all the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (A) require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required
under the Act or the securities or Blue Sky laws of the various
states), (B) conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the organizational documents of
such Selling Stockholder, if such Selling Stockholder is not an
individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Selling Stockholder is a party
or by which any property of such Selling Stockholder is bound or (C)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or
agency having jurisdiction over such Selling Stockholder or any
property of such Selling Stockholder.
The opinion of Freeborn & Peters described in paragraph (f) above
shall be rendered to you at the request of the Company and the Selling
Stockholders and shall so state therein.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Katten Muchin & Zavis, counsel for the Underwriters, as to
the matters referred to in Sections 9(f)(iv), 9(f)(vi) (but only with
respect to the Company), 9(f)(ix) (but only with respect to the statements
under the caption "Underwriting") and 9(f)(xvii)(C).
In giving such opinions with respect to the matters covered by Section
9(f)(xvii), counsel for the Company and counsel for the Underwriters may
state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification except as
specified.
(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Price
Waterhouse LLP, independent public
-27-
<PAGE>
accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and effect on
the Closing Date.
(k) The Company and the Selling Stockholders shall not have failed on
or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with
by the Company or the Selling Stockholders, as the case may be, on or prior
to the Closing Date.
(l) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person (as defined under applicable
U.S. federal tax legislation) to the effect that such Selling Stockholder
is not a U.S. Person, which certificate may be in the form of a properly
completed and executed United States Treasury Department Form W-8 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
10. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or its subsidiary or the earnings, affairs, or business prospects
of the Company or its subsidiary, whether or not arising in the ordinary course
of business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (iii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments
-28-
<PAGE>
on any such exchange or the Nasdaq National Market, (iv) the suspension of
trading of any securities of the Company on any exchange or in the over-the-
counter market, (v) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, (vi) the declaration of a banking moratorium by either federal or New
York State authorities or (vii) the taking of any action by any federal, state
or local government or agency in respect of its monetary or fiscal affairs which
in your opinion has a material adverse effect on the financial markets in the
United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any
-29-
<PAGE>
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
11. Agreements of the Selling Stockholders. Each Selling Stockholder
agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold
by such Selling Stockholder pursuant to this Agreement that are required to
be satisfied by such Selling Stockholder.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to May & Speh,
Inc., 1501 Opus Place, Downers Grove, Illinois 60515, Attention: Andy V.
Jonusaitis, (b) if to the Selling Stockholders (other than the ESOP), to Kevin
McCarthy, c/o Bell, Boyd & Lloyd, Three First National Plaza, Suite 3200,
Chicago, Illinois 60602, (c) if to the ESOP, to Cole Taylor Bank, 850 West
Jackson Boulevard, Chicago, Illinois 60607, Attention: Kathleen Ursa, and (d)
if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by them. The Sellers may agree, as
among themselves and without in any respect limiting or affecting the
Underwriter's right to such reimbursement, as to the respective amounts of such
expenses for which they each shall be responsible. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to Section 5(i) hereof. The Sellers also
agree, jointly and severally, to reimburse the several Underwriters, their
directors and officers and any persons controlling any of the Underwriters for
any and all fees and expenses
-30-
<PAGE>
(including, without limitation, the fees disbursements of counsel) incurred by
them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 8 hereof).
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
-31-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
MAY & SPEH, INC.
By ___________________________________
Title:
THE SELLING STOCKHOLDERS NAMED
IN ANNEX I HERETO
By ___________________________________
Attorney-in-fact
COLE TAYLOR BANK,
as Trustee for the May & Speh, Inc.
Employee Stock Ownership Plan
By ___________________________________
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
ABN AMRO INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By ___________________________
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
- ---------------------------- -------------------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch & Co.
ABN AMRO Incorporated
-----------------------
Total 4,000,000
=======================
</TABLE>
<PAGE>
SCHEDULE II
-----------
Selling Stockholders
--------------------
<TABLE>
<CAPTION>
Number of Firm
Name Shares Being Sold
- ----------------------------------------------------- -----------------------
<S> <C>
-------------------
Total 4,000,000
===================
</TABLE>
<PAGE>
ANNEX I
-------
Selling Stockholders on behalf
of whom the Attorney-in-fact is
executing the Underwriting Agreement:
-------------------------------------
