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Exhibit 1.1
CLAYTON HOLDINGS, INC.
6,250,000 Shares of Common Stock(1)
UNDERWRITING AGREEMENT
March [__], 2006
William Blair & Company, L.L.C.
As Representative of
the Several
Underwriters Named in
Schedule A
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois
60606
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. Clayton Holdings, Inc. ("COMPANY"), a
Delaware corporation, will have, upon the filing of an amendment to
its Fourth
Amended and Restated Certificate of Incorporation (the "CHARTER
AMENDMENT"), an
authorized capital stock consisting of 10,000,000 shares, $0.01 par
value, of
Preferred Stock, of which no shares will be outstanding as of the
First Closing
Date hereinafter defined, and 150,000,000 shares, $0.01 par value,
of Common
Stock ("COMMON STOCK"), of which 18,141,306 shares will be
outstanding as of the
First Closing Date hereinafter defined (excluding any shares of
Common Stock
that may be issued upon exercise of options after the date of this
Agreement).
The Company proposes to issue and sell 6,250,000 shares of its
authorized but
unissued Common Stock ("FIRM SHARES") to the several underwriters
named in
Schedule A as it may be amended by the Pricing Agreement
hereinafter defined
("UNDERWRITERS"), who are acting severally and not jointly. In
addition, the
Company proposes to grant to the Underwriters an option to purchase
up to
937,500 additional shares of Common Stock ("OPTION SHARES") as
provided in
Section 4 hereof. The Firm Shares and, to the extent such option is
exercised,
the Option Shares, are hereinafter collectively referred to as the
"SHARES."
You have advised the Company that the Underwriters propose to make
a
public offering of their respective portions of the Shares as soon
as you deem
advisable after the registration statement hereinafter referred to
becomes
effective, if it has not yet become effective, and the Pricing
Agreement
hereinafter defined has been executed and delivered.
The Company and the Underwriters agree that up to 312,500 of
the
Shares to be purchased by the Underwriters (the "RESERVED SHARES")
shall be
reserved for sale by the Underwriters to certain eligible employees
and
independent loan review specialists of the Company (the
"INVITEES"), as part of
the distribution of the Shares by the Underwriters, subject to the
terms of this
Agreement, the applicable rules, regulations and interpretations of
the National
Association of Securities Dealers, Inc. ("NASD") and all other
applicable laws,
rules and regulations. To the extent that any such Reserved Shares
are not
orally confirmed for purchase by Invitees by the end of the first
business day
after the date of this Agreement, such Reserved Shares may be
offered to the
public by the Underwriters as part of the public offering
contemplated hereby.
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(1) Plus an option to
acquire up to 937,500 additional shares to cover
overallotments
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Prior to the purchase and public offering of the Shares by the
several
Underwriters, the Company and the Representative, acting on behalf
of the
several Underwriters, shall enter into an agreement substantially
in the form of
Exhibit A hereto (the "PRICING AGREEMENT"). The Pricing Agreement
may take the
form of an exchange of any standard form of written
telecommunication between
the Company and the Representative and shall specify such
applicable information
as is indicated in Exhibit A hereto. The offering of the Shares
will be governed
by this Agreement, as supplemented by the Pricing Agreement. From
and after the
date of the execution and delivery of the Pricing Agreement, this
Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters
as
follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-129526) and
a
related preliminary prospectus with respect to the Shares have
been
prepared and filed with the Securities and Exchange Commission
("COMMISSION") by the Company in conformity with the requirements
of the
Securities Act of 1933, as amended, and the rules and regulations
of the
Commission thereunder (collectively, the "1933 ACT;" all references
herein
to
specific rules are rules promulgated under the 1933 Act); and
the
Company has so prepared and has filed such amendments thereto, if
any, and
such
amended preliminary prospectuses as may have been required to the
date
hereof and will file such additional amendments thereto and such
amended
prospectuses as may hereafter be required. The Company will prepare
and
file
a prospectus pursuant to Rule 424(b) that discloses the
information
previously omitted from the prospectus in reliance upon Rule 430A.
To the
extent requested by the Representative, there have been or will
promptly be
delivered to you three signed copies of such registration statement
and
amendments, three copies of each exhibit filed therewith, and
conformed
copies of such registration statement and amendments (but without
exhibits)
and
of the related preliminary prospectus or prospectuses and final
forms
of
prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time
it
becomes effective and the prospectus constituting a part thereof
(including
the
information, if any, deemed to be part thereof pursuant to Rule
430A(b)), as from time to time amended or supplemented, are
hereinafter
referred to as the "REGISTRATION STATEMENT" and the
"PROSPECTUS,"
respectively, except that if any revised prospectus shall be
provided to
the
Underwriters by the Company for use in connection with the offering
of
the
Shares which differs from the Prospectus on file at the Commission
at
the
time the Registration Statement became or becomes effective
(whether or
not
such revised prospectus is required to be filed by the Company
pursuant
to
Rule 424(b)), the term Prospectus shall refer to such revised
prospectus
from
and after the time it was provided to the Underwriters for such
use.
Any
registration statement (including any amendment or supplement
thereto
or information which
is deemed part thereof) filed by the Company under
Rule
462(b) ("RULE 462(B) REGISTRATION STATEMENT") shall be deemed to
be
part
of the "Registration Statement" as defined herein, and any
prospectus
(including any amendment or supplement thereto or information which
is
deemed part thereof) included in such registration statement shall
be
deemed to be part of the "Prospectus" as defined herein, as
appropriate.
The
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter
collectively
referred to as the "EXCHANGE ACT."
(b) The Commission has not issued any order preventing or
suspending
the
use of any preliminary prospectus, and each preliminary prospectus
has
conformed in all material respects with the requirements of the
1933 Act
and,
as of its date, has not included any untrue
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statement of a material fact or omitted to state a material fact
necessary
to
make the statements therein, in light of the circumstances under
which
they
were made, not misleading; and when the Registration Statement
became
or
becomes effective, and at all times subsequent thereto, up to the
First
Closing Date or the Second Closing Date hereinafter defined, as the
case
may
be, the Registration Statement, including the information deemed to
be
part
of the Registration Statement at the time of effectiveness pursuant
to
Rule
430A(b), if applicable, and the Prospectus and any amendments
or
supplements thereto, in all material respects conformed or will in
all
material respects conform to the requirements of the 1933 Act, and
neither
the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement
of a
material fact or omitted or will omit to state a material fact, in
the case
of
the Registration Statement or any amendment or supplement
thereto,
required to be stated therein or necessary to make the statements
therein
not
misleading and, in the case of the Prospectus, or any amendment
or
supplement thereto, necessary to make the statements therein, in
light of
the
circumstances under which they were made, not misleading.
As of the Applicable Time hereinafter defined, neither (x) the
Issuer
General Use Free Writing Prospectus(es) hereinafter defined issued
at or
prior to the Applicable Time and the Statutory Prospectus
hereinafter
defined as of the Applicable Time, all being considered
together
(collectively, the "DISCLOSURE PACKAGE"), nor (y) any individual
Issuer
Limited Use Free Writing Prospectus hereinafter defined included
any untrue
statement of a material fact or omitted to state a material fact
necessary
to
make the statements therein, in light of the circumstances under
which
they
were made, not misleading.
As used in this Section 2(b) and elsewhere in this Agreement:
"APPLICABLE TIME" means [__]:00 P.M., Chicago Time, on March
[__],
2006, or such other time as agreed by the Company and the
Representative.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Shares that
(i) is
required to be filed with the Commission by the Company, (ii) is a
"road
show
for an offering that is a written communication" within the meaning
of
Rule
433(d)(8)(i) whether or not required to be filed with the
Commission
or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because
it
contains a description of the Shares or of the offering thereof
that does
not
reflect the final terms, in each case in the form filed or required
to
be
filed with the Commission or, if not required to be filed, in the
form
required to be retained in the Company's records pursuant to Rule
433(g).
"ISSUER GENERAL USE FREE WRITING PROSPECTUS" means any Issuer
Free
Writing Prospectus that is intended for general distribution to
prospective
investors (other than a Bona Fide Electronic Road Show
hereinafter
defined), as evidenced by its being specified in Schedule B
hereto.
"ISSUER LIMITED USE FREE WRITING PROSPECTUS" means any Issuer
Free
Writing Prospectus that is not an Issuer General Use Free
Writing
Prospectus.
"STATUTORY PROSPECTUS" as of any time means the prospectus relating
to
the
Shares that is included in the Registration Statement immediately
prior
to
that time.
The Company has made available a "BONA FIDE electronic road show,"
as
defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the
"BONA FIDE
ELECTRONIC ROAD SHOW") such that no
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filing of any "road show" (as defined in Rule 433(h)) is required
in
connection with the offering of the Shares.
Each Issuer Free Writing Prospectus, as of its issue date and at
all
subsequent times through the completion of the public offer and
sale of the
Shares or until any earlier date that the Company notified or
notifies the
Representative as described in Section 5(d), did not, does not and
will not
include any information that conflicted, conflicts or will conflict
with
the
information contained in the Registration Statement or the
Prospectus,
and
any preliminary or other prospectus deemed to be a part thereof
that
has
not been superseded or modified.
Notwithstanding the foregoing, the representations and warranties
of
the
Company set forth in this Section 2(b) shall not apply to
information
contained in or omitted from any preliminary prospectus, the
Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or
any
amendment or supplement thereto in reliance upon and in conformity
with
written information furnished to the Company by or on behalf of
any
Underwriter through the Representative specifically for use in
the
preparation thereof.
At the time of filing the Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto
and at the
date
of this Agreement, the Company was not and is not an
"ineligible
issuer" as defined in Rule 405.
(c) The Company and its subsidiaries have been duly incorporated
and
are
validly existing as corporations in good standing under the laws
of
their respective places of incorporation, with corporate power
and
authority to own their properties and conduct their business as
described
in
the Prospectus; the Company and each of its subsidiaries are
duly
qualified to do business as foreign corporations under the
corporation law
of,
and are in good standing as such in, each jurisdiction in which
they
own
or lease substantial properties, have an office, or in which
substantial business is conducted and such qualification is
required except
in
any such case where the failure to so qualify or be in good
standing
would not have a material adverse effect upon the Company and
its
subsidiaries taken as a whole; and no proceeding of which the
Company has
knowledge has been instituted in any such jurisdiction, revoking,
limiting
or
curtailing, or seeking to revoke, limit or curtail, such power
and
authority or qualification.
(d) Except as disclosed in the Prospectus, the Company owns
directly
or
indirectly 100 percent of the issued and outstanding capital stock
of
each
of its subsidiaries, free and clear of any claims, liens,
encumbrances
or
security interests and all of such capital stock has been duly
authorized and validly issued and is fully paid and
nonassessable.
(e) The issued and outstanding shares of capital stock of the
Company
as
set forth in the Prospectus have been duly authorized and
validly
issued, are fully paid and nonassessable, and conform to the
description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued,
delivered
and
paid for pursuant to this Agreement, will be validly issued, fully
paid
and
nonassessable, and will conform to the description thereof
contained in
the
Prospectus.
(g) The making and performance by the Company of this Agreement
and
the
Pricing Agreement have been duly authorized by all necessary
corporate
action and will not violate any provision of the Company's charter
or
bylaws, after giving effect to the filing and effectiveness of the
Charter
Amendment pursuant to Section 5(p), and will not result in the
material
breach, or be
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in
material contravention, of any provision of any agreement,
franchise,
license, indenture, mortgage, deed of trust, or other instrument to
which
the
Company or any subsidiary is a party or by which the Company,
any
subsidiary or the property of any of them may be bound or affected,
or any
order, rule or regulation applicable to the Company or any
subsidiary of
any
court or regulatory body, administrative agency or other
governmental
body having
jurisdiction over the Company or any subsidiary or any of their
respective properties, or any order of any court or governmental
agency or
authority entered in any proceeding to which the Company or any
subsidiary
was
or is now a party or by which it is bound. No consent,
approval,
authorization or other order of any court, regulatory body,
administrative
agency or other governmental body is required for the execution
and
delivery of this Agreement or the Pricing Agreement or the
consummation of
the
transactions contemplated herein or therein, except for compliance
with
the
1933 Act and blue sky laws applicable to the public offering of
the
Shares by the several Underwriters and clearance of such offering
with the
NASD. This Agreement has been duly executed and delivered by the
Company.
(h) The accountants who have expressed their opinions with respect
to
certain of the financial statements and schedules included in
the
Registration Statement are independent accountants as required by
the 1933
Act
and such accountants are not in violation of the auditor
independence
requirements of the Sarbanes-Oxley Act of 2002 (the "SARBANES-OXLEY
ACT").
(i) The consolidated financial statements of the Company included
in
the
Registration Statement, the Disclosure Package and the
Prospectus
present fairly in all material respects the consolidated financial
position
of
the Company as of the respective dates of such financial
statements, and
the
consolidated results of operations and cash flows of the Company
for
the
respective periods covered thereby, all in conformity with
generally
accepted accounting principles consistently applied throughout the
periods
involved, except as disclosed therein. The consolidated
financial
statements of Clayton Services, Inc. ("CLAYTON SERVICES") and
Clayton Fixed
Income Services, Inc. (f/k/a The Murrayhill Company) ("CFIS")
included in
the
Registration Statement, the Disclosure Package and the
Prospectus
present fairly in all material respects the consolidated financial
position
of
Clayton Services and CFIS, respectively, as of the respective dates
of
such
financial statements, and the consolidated results of operations
and
cash
flows of Clayton Services and CFIS, respectively, for the
respective
periods covered thereby, all in conformity with generally
accepted
accounting principles consistently applied throughout the periods
involved,
except as disclosed therein.
The financial information set forth in the Prospectus under
"Selected
Consolidated Financial Data" presents fairly in all material
respects on
the
basis stated in the Prospectus, the information set forth
therein.
The pro forma financial statements and other pro forma
information
included in the Registration Statement, the Disclosure Package and
the
Prospectus present fairly in all material respects the information
shown
therein, have been prepared in accordance with generally
accepted
accounting principles and the Commission's rules and guidelines
with
respect to pro forma financial statements and other pro forma
information,
have
been properly compiled on the pro forma basis described therein,
and,
in
the opinion of the Company, the assumptions used in the
preparation
thereof are reasonable and the adjustments used therein are
appropriate
under the circumstances.
All disclosures contained in the Registration Statement, the
Disclosure Package and the Prospectus regarding "non-GAAP
financial
measures" (as such term is defined by the
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Commission's rules and regulations) comply with Regulation G of
the
Exchange Act and Item 10 of Regulation S-K under the 1933 Act, to
the
extent applicable.
(j) Neither the Company nor any subsidiary is in violation of
its
charter or in default under any consent decree, or in default with
respect
to
any material provision of any lease, loan agreement, franchise,
license,
permit or other contract obligation to which it is a party; and, to
the
Company's knowledge, there does not exist any state of facts
which
constitutes an event of default as defined in such documents or
which, with
notice or lapse of time or both, would constitute such an event of
default,
in
each case, except for defaults which neither singly nor in the
aggregate
are
material to the Company and its subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings
pending,
or
to the Company's knowledge, threatened to which the Company or
any
subsidiary is or may be a party or of which material property owned
or
leased by the Company or any subsidiary is or may be the subject,
or
related to environmental or discrimination matters which are not
disclosed
in
the Prospectus, or which question the validity of this Agreement or
the
Pricing Agreement or any action taken or to be taken pursuant
hereto or
thereto.
(l) There are no holders of securities of the Company having rights
to
registration thereof or preemptive rights to purchase Common Stock
except
as
disclosed in the Prospectus. All holders of registration or
preemptive
rights have waived such rights with respect to the offering being
made by
the
Prospectus.
(m) The Company and each of its subsidiaries have good and
marketable
title to all the properties and assets reflected as owned in the
financial
statements hereinabove described (or elsewhere in the Prospectus),
subject
to
no lien, mortgage, pledge, charge or encumbrance of any kind
except
those, if any, reflected in such financial statements (or elsewhere
in the
Prospectus) or which are not material to the Company and its
subsidiaries
taken as a whole. The Company and each of its subsidiaries hold
their
respective leased properties which are material to the Company and
its
subsidiaries taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or
which might
reasonably be expected to cause or result, under the Exchange Act
or
otherwise, in stabilization or manipulation of the price of any
security of
the
Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information
is
given in the Registration Statement, the Disclosure Package and
the
Prospectus, and except as contemplated by the Prospectus, the
Company and
its
subsidiaries, taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into
any
material transactions not in the ordinary course of business and
there has
not
been any material adverse change in their condition (financial
or
otherwise) or results of operations nor any material change in
their
capital stock, short-term debt or long-term debt.
(p) There is no material document of a character required to be
described in the Registration Statement, the Disclosure Package or
the
Prospectus or to be filed as an exhibit to the Registration
Statement which
is
not described or filed as required.
(q) The Company together with its subsidiaries owns and possesses
all
right, title and interest in and to, or has duly licensed from
third
parties, all patents, patent rights, trade secrets, inventions,
know-how,
trademarks, trade names, copyrights, service marks and other
proprietary
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rights ("TRADE RIGHTS") material to the business of the Company and
each of
its
subsidiaries taken as a whole. Neither the Company nor any of
its
subsidiaries has received any notice of infringement,
misappropriation or
conflict from any third
party as to such material Trade Rights which has
not
been resolved or disposed of and neither the Company nor any of
its
subsidiaries has infringed, misappropriated or otherwise conflicted
with
material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a material adverse effect
upon the
condition (financial or otherwise) or results of operations of the
Company
and
its subsidiaries taken as a whole.
(r) The conduct
of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable
federal,
state, local and foreign laws and regulations, except where the
failure to
be
in compliance would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the
Company
and
its subsidiaries taken as a whole.
(s) All offers and sales of the Company's capital stock during
the
six-month period preceding the date hereof were at all relevant
times
exempt from the registration requirements of the 1933 Act and were
duly
registered with or the subject of an available exemption from
the
registration requirements of the applicable federal, state and
local
securities or blue sky laws.
(t) The Company has filed all necessary federal, state and
local
income and franchise tax returns required to be filed through the
date
hereof (taking into account any permitted extensions) and has paid
all
taxes shown as due thereon, and there is no tax deficiency that has
been,
or
to the knowledge of the Company might be, asserted against the
Company
or
any of its properties or assets that would or could be expected to
have
a
material adverse affect upon the condition (financial or otherwise)
or
results of operations of the Company and its subsidiaries taken as
a whole.
(u) The Company has filed a registration statement pursuant to
Section
12(g) of the Exchange Act to
register the Common Stock thereunder, has
filed an application to list the Shares on the Nasdaq National
Market, and
has
received notification that the listing has been approved, subject
to
notice of issuance or sale of the Shares, as the case may be.
(v) The Company has established and maintains disclosure controls
and
procedures (as defined in Rules 13a-15 and 15d-15 under the
Exchange Act)
and
such controls and procedures are effective in all material respects
in
ensuring that material information relating to the Company,
including its
subsidiaries, is made known to the principal executive officer and
the
principal financial officer.
(w) The Company maintains a system of internal accounting
controls
sufficient to provide reasonable assurance that: (i) transactions
are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to
permit
preparation of financial
statements in conformity with generally accepted
accounting principles and to maintain accountability for assets;
(iii)
access to assets is permitted only in accordance with management's
general
or
specific authorization; and (iv) amounts reflected on the
Company's
consolidated balance sheet for assets are compared with existing
assets at
reasonable intervals and appropriate action is taken with respect
to any
differences.
(x) The Company is not, and does not intend to conduct its business
in
a
manner in which it would become, an "investment company" as defined
in
Section 3(a) of the Investment Company Act of 1940, as amended
("INVESTMENT
COMPANY ACT").
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(y) No transaction has occurred between or among the Company and
any
of
its officers or directors, stockholders or any affiliate or
affiliates
of
any such officer or director or stockholder that is required to
be
described in and is not described in the Registration Statement and
the
Prospectus.
(z) The Company's board of directors has validly appointed an
audit
committee whose composition satisfies the requirements of Rule
4350(d)(2)
of
the Rules of the National Association of Securities Dealers, Inc.
(the
"NASD RULES"), and the board of directors or the audit committee
has
adopted a charter that satisfies the requirements of Rule
4350(d)(1) of the
NASD
Rules.
(aa) The Company and its subsidiaries are insured by insurers
of
recognized financial responsibility against such losses and risks
and in
such
amounts as are customary in the businesses in which they are
engaged
or
propose to engage after giving effect to the transactions described
in
the
Prospectus. All policies of insurance and fidelity or surety
bonds
insuring the Company, its subsidiaries and their respective
businesses,
assets, employees, officers and directors are in full force and
effect; the
Company and its subsidiaries are in compliance with the terms of
such
policies and instruments in all material respects.
(bb) The Company has taken all necessary actions to ensure that,
upon
the
effectiveness of the Registration Statement, it will be in
compliance
in
all material respects with all provisions of the Sarbanes-Oxley Act
and
all
rules and regulations promulgated thereunder or implementing
the
provisions thereof that are then in effect and which the Company
is
required to comply with as of the effectiveness of the
Registration
Statement, and is actively taking steps to ensure that it will be
in
compliance in all material respects with other provisions of
the
Sarbanes-Oxley Act not
currently in effect, upon the effectiveness of such
provisions, or which will become applicable to the Company at all
times
after the effectiveness of the Registration Statement.
(cc) No consent, approval, authorization or order of, or
qualification
with, any governmental body or agency, other than those obtained,
is
required in connection with the offering of the Reserved Shares in
any
jurisdiction where the Reserved Shares are being offered. The
Company has
not
offered, or caused the Underwriters to offer, any Reserved Shares
with
the
specific intent to unlawfully influence (i) a customer or supplier
of
the
Company or any of its subsidiaries to alter the customer's or
supplier's level or type of business with the Company or any of
its
subsidiaries or (ii) a trade journalist or publication to write or
publish
favorable information about the Company or its products.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS.
The
Representative, on behalf of the several Underwriters, represents
and warrants
to the Company that the information set forth (a) on the cover page
of the
Prospectus with respect to price, underwriting discount and terms
of the
offering and (b) in all paragraphs under "Underwriting" in the
Prospectus,
except paragraphs 7, 16 and 17 thereof, was furnished to the
Company by and on
behalf of the Underwriters for use in connection with the
preparation of the
Registration Statement and is correct and complete in all material
respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of
the
representations, warranties and agreements herein contained, but
subject to the
terms and conditions herein set forth, the Company agrees to sell
to the
Underwriters named in Schedule A hereto, and the Underwriters
agree, severally
and not jointly, to purchase the Firm Shares from the Company at
the price per
share set forth in the Pricing Agreement. The obligation of each
Underwriter to
the Company shall be
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to purchase from the Company that number of full shares which (as
nearly as
practicable, as determined by you) bears to 6,250,000, the same
proportion as
the number of Shares set forth opposite the name of such
Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased
by all
Underwriters under this Agreement. The initial public offering
price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if
permitted
under Rule 15c6-1 under the Exchange Act, (or the third business
day if required
under Rule 15c6-1 under the Exchange Act or unless postponed in
accordance with
the provisions of Section 12) following the date the Registration
Statement
becomes effective (or, if the Company has elected to rely upon Rule
430A, the
fourth business day, if permitted under Rule 15c6-1 under the
Exchange Act, (or
the third business day if required under Rule 15c6-1 under the
Exchange Act)
after execution of the Pricing Agreement), or such other time not
later than ten
business days after such date as shall be agreed upon by the
Representative and
the Company, the Company will deliver to you at the offices of
counsel for the
Underwriters or through the facilities of The Depository Trust
Company for the
accounts of the several Underwriters, certificates representing the
Firm Shares
to be sold by it, against payment of the purchase price therefor by
delivery of
federal or other immediately available funds, by wire transfer or
otherwise, to
the Company. Such time of delivery and payment is herein referred
to as the
"FIRST CLOSING DATE." The certificates for the Firm Shares so to be
delivered
will be in such denominations and registered in such names as you
request by
notice to the Company prior to 10:00 A.M., Chicago Time, on the
second business
day preceding the First Closing Date, and will be made available at
the
Company's expense for checking and packaging by the Representative
at 10:00
A.M., Chicago Time, on the business day preceding the First Closing
Date.
Payment for the Firm Shares so to be delivered shall be made at the
time and in
the manner described above at the offices of counsel for the
Underwriters.
In addition, on the basis of the representations, warranties
and
agreements herein contained, but subject to the terms and
conditions herein set
forth, the Company hereby grants an option to the several
Underwriters to
purchase, severally and not jointly, up to an aggregate of 937,500
Option
Shares, at the same purchase price per share to be paid for the
Firm Shares, for
use solely in covering any overallotments made by the Underwriters
in the sale
and distribution of the Firm Shares. The option granted hereunder
may be
exercised at any time (but not more than once) within 30 days after
the date of
the initial public offering upon notice by you to the Company
setting forth the
aggregate number of Option Shares as to which the Underwriters are
exercising
the option, the names and denominations in which the certificates
for such
shares are to be registered and the time and place at which such
certificates
will be delivered. Such time of delivery (which may not be earlier
than the
First Closing Date), being herein referred to as the "SECOND
CLOSING DATE,"
shall be determined by you, but if at any time other than the First
Closing
Date, shall not be earlier than three nor later than 10 full
business days after
delivery of such notice of exercise. The number of Option Shares to
be purchased
by each Underwriter shall be determined by multiplying the number
of Option
Shares to be sold by a fraction, the numerator of which is the
number of Firm
Shares to be purchased by such Underwriter as set forth opposite
its name in
Schedule A and the denominator of which is the total number of Firm
Shares
(subject to such adjustments to eliminate any fractional share
purchases as you
in your absolute discretion may make). Certificates for the Option
Shares will
be made available at the Company's expense for checking and
packaging at 10:00
A.M., Chicago Time, on the first full business day preceding the
Second Closing
Date. The manner of payment for and delivery of the Option Shares
shall be the
same as for the Firm Shares as specified in the preceding
paragraph.
You have advised the Company that each Underwriter has authorized
you
to accept delivery of its Shares, to make payment and to receipt
therefor. You,
individually and not as the Representative of the Underwriters, may
make payment
for any Shares to be purchased by any Underwriter whose funds shall
not have
been received by you by the First Closing Date or the Second
-9-
<Page>
Closing Date, as the case may be, for the account of such
Underwriter, but any
such payment shall not relieve such Underwriter from any obligation
hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees
that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of
the
Registration Statement or of the institution of any proceedings for
that
purpose, or of any notification of the suspension of qualification
of the
Shares for sale in any jurisdiction or the initiation or
threatening of any
proceedings for that purpose or of any examination pursuant to
Section 8(e)
of
the 1933 Act concerning the Registration Statement and if the
Company
becomes the subject of a proceeding under Section 8A of the 1933
Act in
connection with the offering of the Shares, and will also advise
you
promptly of any request of the Commission for amendment or
supplement of
the
Registration Statement, of any preliminary prospectus or of the
Prospectus, or for ad
