FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): August 19, 1994
Zenith Electronics Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-4115 36-1996520
(State or jurisdiction (Commission File (IRS Employer
of incorporation) Number) identification No.)
1000 Milwaukee Avenue
Glenview, Illinois 60025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (708) 391-7000
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
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On August 19, 1994, the Company entered into a Sales Agency
Agreement (the "Agreement") with Kidder, Peabody & Co. Incorporated
("Kidder, Peabody") for the sale of up to 600,000 shares of the
Company's Common Stock through Kidder, Peabody, as exclusive
agent, to certain investors at negotiated prices, all in
accordance with the terms of the Agreement. This Agreement
covers the remaining balance of shares of the Company's Common
Stock registered for issuance and sale under the Company's current
registration statement. A copy of the Agreement is attached as
Exhibit 1 hereto and is incorporated by reference herein.
Item 7. Financial Statements, Pro forma Financial Information and Exhibits.
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(c) The exhibits accompanying this report are listed in the accompanying
Exhibit index and are included as part of this report.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZENITH ELECTRONICS CORPORATION
By: /s/ David S. Levin
--------------------------
David S. Levin, Secretary
Date: August 19, 1994
<PAGE>
Exhibit Index
Exhibit
Number Exhibit Description
- ------- -----------------------------------------------
1 Sales Agency Agreement dated August 19, 1994 between
the Company and Kidder, Peabody & Co. Incorporated.
ZENITH ELECTRONICS CORPORATION
Common Stock, $1.00 par value
SALES AGENCY AGREEMENT
----------------------
August 19, 1994
KIDDER, PEABODY & CO. INCORPORATED,
10 Hanover Square
New York, N.Y. 10005
Gentlemen:
Zenith Electronics Corporation, a Delaware corporation (the "Company"),
confirms its agreement with Kidder, Peabody & Co. Incorporated (the "Agent"),
as follows:
1. Description of Securities. The Company proposes to issue and sell
through the Agent, as exclusive sales agent, up to 600,000 shares (the "Maximum
Amount") of common stock, $1.00 par value, for the per share purchase price as
set forth in Section 3 hereof (the "Stock").
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Agent that:
(a) A registration statement on Form S-3 (Registration No. 33-
52541) with respect to the Stock, including a form of prospectus, has been
carefully prepared by the Company in conformity with the requirements of the
Securities Act of 1933 (the "Act") and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and filed with the Commission and has become effective. Such
registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement. Any such amendment or
supplement was so prepared and filed, and any such amendment filed after the
effective date of such registration statement has become effective. No stop
order suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or threatened
by the Commission. Copies of such registration statement and prospectus, any
such amendment or supplement and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date of this
Agreement have been delivered to the Agent. Such registration statement, as
it may have heretofore been amended, is referred to herein as the
"Registration Statement," and the final form of prospectus included in the
Registration Statement, as amended or supplemented from time to time, is
referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus or any amendment or supplement
thereto shall be deemed to refer to and include the documents incorporated (or
deemed to be incorporated) by reference therein, and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or Prospectus shall be deemed to refer to and include
the filing after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at
each Closing Date (as hereinafter defined), conformed or will conform in all
material respects with the requirements of the Act and the Rules and
Regulations; each part of the Registration Statement, when such part became
or becomes effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Prospectus
and any amendment or supplement thereto, on the date of filing thereof with
the Commission and at each Closing Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to statements
in or omissions from any such document in reliance upon, and in conformity
with, written information furnished to the Company by the Agent, specifically
for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when
they became or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as the case may be, conformed or will conform in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(d) The financial statements of the Company and its subsidiaries,
together with the related notes and schedules, set forth or incorporated by
reference in the Registration Statement and Prospectus fairly present the
financial condition and the results of operations and cash flows of the
Company and its subsidiaries as of the dates indicated or for the periods
therein specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
stated therein).
(e) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the laws of
its jurisdiction of incorporation, has full power and authority (corporate and
other) to conduct its business as described in the Registration Statement and
Prospectus and is duly qualified to do business in each jurisdiction in which
it owns or leases real property or in which the conduct of its business
requires such qualification except where the failure to be so qualified,
considering all such cases in the aggregate, will not have a material adverse
effect on the business, properties, financial position or results of operations
of the Company and its subsidiaries considered as a whole; and all of the
outstanding shares of capital stock of each such subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as otherwise stated
in the Registration Statement) are owned beneficially by the Company subject
to no security interest, other encumbrance or adverse claim.
(f) The outstanding shares of common stock of the Company and
the Stock have been duly authorized and are, or when issued as contemplated
hereby will be, validly issued, fully paid and non-assessable and conform, or
when so issued will conform, to the description thereof in the Prospectus. The
stockholders of the Company have no preemptive rights with respect to the
Stock.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, or entered into
any transactions, not in the ordinary course of business, that are material
to the Company and its subsidiaries considered as a whole, and there has not
been on a consolidated basis, any material change in the capital stock, or any
material increase in the short-term debt or long-term debt of the Company and
its subsidiaries (other than advances under the credit agreement dated as of
May 21, 1993, as it may be amended from time to time (the "Credit
Agreement") to be used in the ordinary course of the Company's business), or
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole.
(h) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened any action, suit or proceeding to
which the Company or any of its subsidiaries is a party, before or by any court
or governmental agency or body, that could reasonably be expected to result in
any material adverse change in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole or that could reasonably be expected to
materially and adversely affect the properties or assets thereof considered as
a whole.
(i) There are no contracts or documents of the Company or any of
its subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by the
Act or the Exchange Act or by the rules and regulations of the Commission
thereunder that have not been so filed.
(j) The performance of this Agreement, and the consummation of
the transactions contemplated herein or therein will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company is a party or
by which it is bound or to which any of the property of the Company is subject,
the Company's charter or by-laws, or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, in connection with the issuance or sale of the Stock by the
Company, except such as may be required by the listing of the Stock on the
New York Stock Exchange ("NYSE") or the Chicago Stock Exchange ("CSE") or
under the Act or state securities or blue sky laws; and the Company has full
power and authority to authorize, issue and sell the Stock as contemplated
by this Agreement, free of any preemptive rights.
3. Sale and Delivery of Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell exclusively
through Agent, and Agent agrees to sell, as exclusive sales agent for the
Company, on a best efforts basis, up to the Maximum Amount of Stock on the
terms set forth herein.
The Stock, up to the Maximum Amount, is to be sold between August 19, 1994
and September 19, 1994 (the "Sale Period") at a per share price or prices to be
agreed upon in writing (or orally, promptly confirmed by telecopy) between the
Company and the Agent immediately prior to effecting any sale of Stock (such
per share purchase price with respect to any shares of Stock being sold is
referred to herein as the "Per Share Purchase Price"). Subject to the terms
and conditions hereof, the Agent shall use its best efforts to sell the Maximum
Amount for the Per Share Purchase Price during the Sale Period. The Agent
shall not sell the shares of Stock through or in connection with an "at the
market offering" (as defined in Rule 415(a)(4)(iv) under the Act) on behalf
of the Company including, without limitation, by means of ordinary brokers'
transactions on any national securities exchange, including the NYSE, on
which such shares of Stock are listed (provided, however, that the foregoing
restriction shall not apply to up to 39,256 shares of Stock (i.e., the number
of shares registered under the Registration Statement and remaining within
the limitation specified in Rule 415(a)(4)(ii)), which shares may be
purchased by the Agent for its own account and resold by Agent through
transactions on a national securities exchange). Agent will notify the Company
of the identity of any purchaser that is purchasing more than 1% of the
Company's outstanding shares of common stock during the Sale Period, and the
Company shall reserve the right to refuse to sell Stock to such purchaser
if such purchaser beneficially owns more than 5% of the Company's outstanding
common stock. The Company acknowledges that Agent may act in the capacity
of an agent for any purchaser of Stock.
The compensation to the Agent for any sales of Stock shall equal $0.1875 per
share, multiplied by the number of shares of Stock sold (the "Sales
Commission"). The net proceeds (the "Net Proceeds") to the Company shall
equal (I) the number of shares of Stock sold, multiplied by the Per Share
Purchase Price, minus (ii) the Sales Commission.
Settlement for sales of Stock will occur on the fifth business day following
the date on which such sales are made (any such date being referred to as a "
Closing Date"). Settlement for all shares shall be effective via the
Depository Trust Corporation on a delivery-versus-payment basis.
At each such settlement, the Company shall affirm in writing each
representation, warranty, covenant and other agreement contained in this
Agreement. The Company covenants and agrees with Agent that within two (2)
business days of a sale of Stock, the Company will file a Prospectus
Supplement under Rule 424(b)(3) promulgated under the Act, which Prospectus
Supplement will set forth the number of such shares of Stock sold through
the Agent, the Net Proceeds to the Company and the compensation payable by
the Company to the Agent with respect to such sales (all as provided in
writing by the Agent for inclusion in each such Prospectus Supplement). The
obligations of the Agent to sell the Stock shall be subject to the continuing
accuracy of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the continuing
satisfaction of the additional conditions specified in Section 5(a) through
(i) of this Agreement.
4. Covenants. The Company covenants and agrees with Agent that:
(a) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission, promptly
upon the Agent's request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Agent's reasonable opinion, may be
necessary or advisable in connection with the distribution of the Stock by the
Agent; it will file no amendment or supplement to the Registration Statement or
Prospectus (other than any prospectus supplement relating to the offering of
other securities registered under the Registration Statement or any document
required to be filed under the Exchange Act that upon filing is deemed to be
incorporated by reference therein) to which the Agent shall reasonably object
by notice to the Company after having been furnished a copy a reasonable
time prior to the filing; and it will furnish to the Agent at or prior to the
filing thereof a copy of any such prospectus supplement or any document that
upon filing is deemed to be incorporated by reference in the Registration
Statement or Prospectus.
(b) The Company will advise the Agent, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(c) Within the time during which a prospectus relating to the Stock
is required to be delivered under the Act, the Company will comply as far as it
is able with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Stock as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to
amend or supplement the Registration Statement or Prospectus to comply with the
Act, the Company will promptly notify the Agent and will amend or supplement
the Registration Statement or Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Stock for
sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required
for the distribution of the Stock, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction.
(e) The Company will furnish to the Agent copies of the Registration
Statement, the Prospectus (including all documents incorporated by reference
therein) and all amendments and supplements to the Registration Statement or
Prospectus that are filed with the Commission during the period in which a
prospectus relating to the Stock is required to be delivered under the Act
(including all documents filed with the Commission during such period that are
deemed to be incorporated by reference therein), in each case as soon as
available and in such quantities as you may from time to time reasonably
request, and will also furnish copies of the Prospectus to the NYSE in
accordance with Rule 153 of the Rules and Regulations.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months after
the end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the date of
effectiveness of the Registration Statement that shall satisfy the provisions
of Section 11(a) of the Act.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder (including
any exchange fees), will pay the expenses of printing all documents
relating to the offering, and will reimburse the Agent for any expenses
(including fees and disbursements of counsel) incurred by it in connection with
the matters referred to in Section 4(d) hereof and the preparation of
memoranda relating thereto and for any filing fee of the National Association
of Securities Dealers, Inc. relating to the Stock. The Company shall not in
any event be liable to the Agent for loss of anticipated profits from the
transactions covered by this Agreement.
(h) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell, any
shares of common stock (other than the Stock) or securities convertible into or
exchangeable for, or any rights to purchase or acquire, common stock during
the period ending on the final Closing Date for the sale of Stock hereunder (a)
without giving you three business days' prior written notice specifying the
nature of the proposed sale and the date of such proposed sale, or (b) if,
following the receipt of such notice, you object to such sale in writing prior
to the date specified in such notice as the date of such proposed sale;
provided, however, that you may not object to or prohibit the Company from
(i) issuing and/or selling shares of its common stock or warrants, options
or other rights exercisable or convertible into shares of its common stock
to employees of the Company and its subsidiaries, (ii) issuing and/or selling
shares of common stock pursuant to any employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Company now or
hereinafter in effect, (iii) issuing and/or selling shares of common stock
or securities convertible into or exchangeable for or rights to acquire
common stock pursuant to a private placement, including, without limitation,
pursuant to Rule 144A of the Act, (iv) issuing and selling common stock
pursuant to its contractual obligations as in effect on the date hereof
under the Zenith Stockholders Rights Plan, (v) issuing and contributing
shares of common stock to the Zenith Hourly and Salaried Employees Profit
Sharing and Retirement Plans, and (vi) issuing common stock issuable upon
conversion of securities or the exercise of warrants, options or other rights
in effect or outstanding on the date hereof.
(j) The Company will, at any time during the term of this
Agreement, as supplemented from time to time, advise the Agent immediately
after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect any opinion, certificate, letter
and other document provided to the Agent pursuant to Section 5 herein.
5. Conditions of Agent's Obligations. The obligations of the Agent to sell
the Stock as provided herein shall be subject to the accuracy, as of the date
hereof, and as of each Closing Date contemplated under this Agreement, of the
representations and warranties of the Company herein, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or the Agent,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) The Agent shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in your opinion is material,
or omits to state a fact that in the Agent's opinion is material and is
required to be stated therein or is necessary to make the statements therein
not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there shall not have been, on a consolidated basis, any
material change in the capital stock or any material increase in short-term or
long-term debt of the Company and its subsidiaries (other than advances under
the Credit Agreement to be used in the ordinary course of the Company's
business), or any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or any change in the rating assigned to any
securities of the Company by Moody's Investors Service, Standard & Poor's or
any similar national rating agency, that, in the Agent's judgment, makes it
impractical or inadvisable to offer or deliver the Stock on the terms and in
the manner contemplated in the Prospectus.
(d) The Agent shall have received at the date of the commencement of
the Sale Period hereunder (the "Commencement Date") and on the final Closing
Date hereunder opinions of John Borst, Jr., Esq., general counsel for the
Company or, if Mr. Borst is unavailable, David S. Levin, Esq., Secretary of
the Company, dated as of the Commencement Date and dated as of the final
Closing Date, respectively, to the effect that:
(i) The Company and each of its subsidiaries has been duly
incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation, has full corporate power and
authority to conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the aggregate,
will not have a material adverse effect on the financial condition,
business, properties, or results of operations of the Company and its
subsidiaries considered as a whole; and all of the outstanding shares of
capital stock of each of the Company's subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and
(except for director's qualifying shares and except as otherwise stated in
the Registration Statement) are owned beneficially by the Company
subject to no security interest, other encumbrance or adverse claim;
(ii) All of the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable; the shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to the Agreement, will be fully paid and
nonassessable and conform to the description thereof in the Prospectus;
and the stockholders of the Company have no preemptive rights with
respect to the Stock;
(iii) To the best knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened by the Commission;
(iv) The Registration Statement, when it became effective,
and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission (and, if applicable, at each
Closing Date on or prior to the date of the opinion), complied (in each
case other than the financial statements, financial data, statistical data
and supporting schedules contained or incorporated by reference therein
as to which such counsel need express no opinion) as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; and the documents incorporated by reference in the
Registration Statement or Prospectus or any amendment or supplement
thereto (other than the financial statements, financial data, statistical
data and supporting schedules contained or incorporated by reference
therein as to which such counsel need express no opinion), when they
became effective under the Act or were filed with the Commission under
the Exchange Act, or at the time such document was amended subsequent
to such filing, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
(v) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown; and such counsel do not know of any statutes or
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus (or required to be filed under the Exchange Act
if upon such filing they would be incorporated by reference therein) or to
be filed as exhibits to the Registration Statement that are not described
and filed as required; and
(vi) This Agreement has been duly authorized, executed and
delivered by the Company; the performance of this Agreement and the
consummation of the transactions contemplated herein by the Company
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any agreement or
instrument known to such counsel to which the Company is a party or by
which it is bound or to which any of the property of the Company is
subject, the Company's charter or by-laws, or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or any of its properties;
and no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement in connection with
the issuance or sale of the Stock by the Company, except such as have
been obtained under the Act and such as may be required by the listing
of the Stock on the NYSE and the CSE or under state securities or blue
sky laws in connection with the sale and distribution of the Stock by the
Agent.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants of the Company
and representatives of Agent at which the contents of the Registration
Statement, the Prospectus and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel
has not independently checked the accuracy or completeness of, or
otherwise verified, and accordingly need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus or any amendment thereof or any supplement thereto, and
that on the basis thereof and relying as to materiality to a large extent
upon the judgment of officers and other representatives of the
Company, nothing has come to such counsel's attention which causes
such counsel to believe that either the Registration Statement (other
than financial statements, financial data, statistical data and supporting
schedules included or incorporated by reference therein, as to which
such counsel need express no belief) when Post-Effective Amendment
No. 1 to the Registration Statement (which was filed on May 18, 1994
and declared effective on May 19, 1994 ("Post-Effective Amendment
No. 1")) became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, including any supplement thereto (other than financial
statements, financial data, statistical data and supporting schedules
included or incorporated by reference therein, as to which such counsel
need express no belief), as of their respective dates included, or as of
the date of such opinion includes, an untrue statement of a material fact
or omitted 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.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Illinois, the General Corporation Laws of the State of Delaware, or the
United States, to the extent he deems proper and specified in such
opinion, upon the opinion of other counsel of good standing whom he
believes to be reliable and who are satisfactory to counsel for Agent and
(B) as to matters of fact, to the extent he deems proper, on certificates
of responsible officers of the Company and public officials. References
to the Prospectus in this subsection include any supplements thereto.
(e) The Agent shall have received at the Commencement Date and on the
final Closing Date hereunder opinions of Sidley & Austin, counsel for the
Company, dated as of the Commencement Date and dated as of the final
Closing Date, respectively, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware;
(ii) All of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable; the shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by the
purchasers thereof pursuant to the Agreement, will be fully paid and
nonassessable, conform to the description thereof in the Prospectus,
and the stockholders of the Company are not entitled to preemptive
rights with respect to the Stock;
(iii) The Registration Statement has become effective under
the Act; (if applicable-the filing of the Prospectus Supplements pursuant
to Rule 424(b) have been made in the manner and within the time period
required by Rule 424(b)); to the knowledge of such counsel no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or
threatened by the Commission; the Registration Statement and the
Prospectus at the time Post-Effective Amendment No. 1 to the
Registration Statement became effective (if applicable-and the
Prospectus Supplements) (in each case other than the financial
statements, financial data, statistical data and supporting schedules
contained or incorporated by reference therein as to which such counsel
need express no opinion) complied as to the form in all material respects
with the requirements of the Act and the Rules and Regulations; the
documents incorporated by reference in the Registration Statement or
Prospectus or any amendment or supplement thereto (other than
financial statements, financial data, statistical data and supporting
schedules contained or incorporated by reference therein as to which
such counsel need express no opinion) at the time of their filing with the
Commission under the Exchange Act or at the time they were amended
subsequent to filing, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder;
(iv) The Agreement has been duly authorized, executed and
delivered by the Company; and
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the valid authorization,
issuance, sale and delivery of the Stock as contemplated by this
Agreement, except such as have been obtained under the Act and such
as may be required by the listing of the Stock on the NYSE and the CSE
or under the securities or blue sky laws of any jurisdiction.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants of the Company
and representatives of Agent at which the contents of the Registration
Statement, the Prospectuses and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel
has not independently checked the accuracy or completeness of, or
otherwise verified, and accordingly need not pass upon, and need not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus or any amendment thereof or any supplement thereto, and
that on the basis thereof and relying as to materiality to a large extent
upon the judgment of officers and other representatives of the
Company, nothing has come to such counsel's attention which causes
such counsel to believe that either the Registration Statement (other
than financial statements, financial data, statistical data and supporting
schedules included or incorporated by reference therein, as to which
such counsel need express no belief) when Post-Effective Amendment
No. 1 became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, including any supplement thereto (other than financial
statements, financial data, statistical data and supporting schedules
included or incorporated by reference therein, as to which such counsel
need express no belief), as of their respective dates included, or as of
the date of such opinion includes, an untrue statement of a material fact
or omitted 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.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Illinois and New York, the General Corporation Laws of the State of
Delaware, or the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for Agent and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this subsection include any
supplements thereto.
(f) The Agent shall have received from Latham & Watkins, counsel
for the Agent, such opinion or opinions, dated as of the Commencement Date
and dated as of the final Closing Date contemplated by this Agreement with
respect to the incorporation of the Company, the validity of the Stock, the
Registration Statement, the Prospectus and other related matters as the Agent
reasonably may request, and such counsel shall have received such papers
and information as they request to enable them to pass upon such matters.
(g) At or prior to (i) the Commencement Date and (ii) the date of
the filing by the Company of any Quarterly Report on Form 10-Q or any Annual
Report on Form 10-K or any other report containing financial information
which report is incorporated by reference in the Prospectus (collectively,
the "Periodic Reports") (or at a later date that is (A) no more than five
days after the date of such filing and (B) at or prior to any Closing Date
occurring on or after the date of such filing), the Agent shall have received
a letter from Arthur Andersen & Co., dated the date of delivery thereof,
substantially in the form attached hereto as Annex I (with appropriate
modifications and references relating to such Periodic Reports).
(h) The Agent shall have received from the Company a certificate,
or certificates, signed by two authorized officers, including the principal
financial or accounting officer (unless such officer is unavailable), of the
Company, dated as of the Commencement Date and dated as of the final
Closing Date contemplated by this Agreement, to the effect that, to the
best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of the
Commencement Date or the Closing Date for such Pricing Period (as
the case may be), and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Commencement Date and
each such Closing Date (as the case may be);
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
(iii) Since the date of this Agreement there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth
and there has been no document required to be filed under the
Exchange Act and the rules and regulations of the Commission
thereunder that upon such filing would be deemed to be incorporated
by reference in the Prospectus that has not been so filed.
(i) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are in the form set
forth herein or, if not set forth herein, satisfactory in form and substance
to the Agent. The Company will furnish the Agent with such conformed copies
of such opinions, certificates, letters and other documents as the Agent
shall reasonably request.
6. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless the Agent against any losses, claims, damages or
liabilities, joint or several, to which Agent may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
Agent for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company by the
Agent specifically for use in the preparation thereof.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any part of the Registration Statement when such part became effective, or in
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made therein
in reliance upon and in conformity with written information furnished to
the Company by the Agent, specifically for use in the preparation thereof,
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending against
any such loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party
shall not relieve it from any liability that it may have to any indemnified
party otherwise than under such subsection (except and only to the extent
that such omission so to notify results directly in actual prejudice to the
Company). In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Agent on the other from the offering of the
Stock or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Agent on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Agent on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Stock (before deducting
expenses) received by the Company bear to the total compensation or profit
(before deducting expenses) received or realized by the Agent from the sale
of the Stock on behalf of the Company. The relative fault 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 Agent and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the
Agent agree that it would not be just and equitable if contributions pursuant
to this subsection (d) were to be determined by pro rata allocations or by any
other method of allocation that does not take account of the equitable
considerations referred to in the first sentence of this subsection (d).
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending against
any action or claim that is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), the Agent shall not be required to
contribute any amount in excess of the amount by which the total actual sales
price at which the Stock sold by the Agent exceeds the amount of any damages
that Agent 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.
(e) The obligations of the Company under this Section 6 shall be in addition
to any liability that the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Agent
within the meaning of the Act; and the obligations of the Agent under this
Section 6 shall be in addition to any liability that the Agent may otherwise
have and shall extend, upon the same terms and conditions, to each director
of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or
any controlling persons, or the Company or any of its officers, directors or
any controlling persons, and shall survive delivery of and payment for the
Stock.
8. [This section is reserved.]
9. Termination.
(a) The Agent shall have the right by giving notice as hereinafter specified
at any time at or prior to any Closing Date, to terminate this Agreement if (i)
the Company shall have failed, refused or been unable, at or prior to the
Closing Date, to perform any agreement on its part to be performed hereunder,
(ii) any other condition of the Agent's obligations hereunder is not fulfilled,
(iii) trading on the New York Stock Exchange or the American Stock Exchange
shall have been wholly suspended, (iv) a banking moratorium shall have been
declared by Federal or New York authorities, or (v) an outbreak of major
hostilities in which the United States is involved, a declaration of war by
Congress, any other substantial national or international calamity or any other
event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Stock to be sold by the Agent on behalf of the Company. Any such
termination shall be without liability of any party to any other party
except that the provisions of Section 4(g) and Section 6 hereof shall at
all times be effective. If the Agent elects to terminate this Agreement as
provided in this Section, the Agent shall provide the required notice
promptly by telephone, telex or telecopy, confirmed by letter.
(b) Unless otherwise agreed to between Agent and the Company, this
Agreement shall terminate as of the end of the Sale Period. Any termination
shall be without liability of any party to any other party except that the
provisions of Section 4(g) and Section 6 hereof shall at all times be effective.
10. Notices. All notices or communications hereunder shall be in writing
and if sent to the Agent shall be mailed, delivered, telexed or telecopied and
confirmed to the Agent at Kidder, Peabody & Co. Incorporated, 10 Hanover
Square, New York, New York 10005, c/o Peter Klein, 17th Floor, or if sent to
the Company, shall be mailed, delivered, telexed or telecopied and confirmed
to the Company at 1000 Milwaukee Avenue, Glenview, Illinois 60025-2993,
Attention: John Borst, Jr., General Counsel, with a copy to Sidley & Austin,
One First National Plaza, Chicago, Illinois 60603, Attention: Thomas A.
Cole, Esq. Each party to this Agreement may change such address for notices
by sending to the parties to this Agreement written notice of a new address for
such purpose.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Company and the Agent and their respective successors and the
controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation hereunder.
12. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York without regard
to the principles of conflicts of laws.
If the foregoing correctly sets forth the understanding between the Company
and the Agent, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Agent. Alternatively, the execution of this Agreement
by the Company and its acceptance by or on behalf of the Agent may be
evidenced by an exchange of telegraphic or other written communications.
Very truly yours,
ZENITH ELECTRONICS CORPORATION
By:/s/ Kell B. Benson
------------------------
Title: Vice President-Finance
Chief Financial Officer
ACCEPTED as of the date first above written
KIDDER, PEABODY & CO. INCORPORATED
By:/s/ David Worley
-----------------------
Title: Vice-President
----------------------
