COLOR SPOT NURSERIES, INC.
$40,000,000
40,000 UNITS CONSISTING OF
__% SERIES A CUMULATIVE PREFERRED STOCK AND
WARRANTS TO PURCHASE COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1997
BT Xxxx. Xxxxx Incorporated
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Color Spot Nurseries, Inc., a Delaware corporation (the
"Company"), hereby confirms its agreement with you (the "Underwriter"), as
set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Underwriter 40,000
units (the "Units"), consisting in the aggregate of 40,000 shares of its __%
Series A Cumulative Preferred Stock (the "Series A Preferred Stock") and
825,000 warrants (the "Warrants") to purchase an aggregate of 825,000 shares
of common stock, par value $.001 per share (the "Common Stock"), of the
Company. The terms of the Series A Preferred Stock shall be set forth in the
Certificate of Designation, Preferences and Relative, Participating Optional
and Other Special Rights of Preferred Stock and Qualifications, Limitations
and Restrictions of Series A Preferred Stock (the "Certificate of
Designation") of the Company. The Warrants are to be issued pursuant to a
Warrant Agreement (the "Warrant Agreement") to be dated as of _____________,
1997 between the Company and American Stock Transfer and Trust Company, as
warrant agent (the "Warrant Agent"). Shares of the Common Stock issuable
upon exercise of the Warrants are collectively referred to herein as the
"Warrant Shares." The Units, Series A Preferred Stock and the Warrants are
collectively referred to herein as the "Securities."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to and agrees with the Underwriter that:
(a) A registration statement on Form S-1 (File No.
333-37335) with respect to the Securities has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission. Copies of such registration statement,
including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore
been delivered by the Company to you. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule 462(b)
of the Act, herein referred to as the "Registration Statement," which shall
be deemed to include all information omitted therefrom in reliance upon Rule
430A and contained in the Prospectus referred to below, has become effective
under the Act and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. "Prospectus" means (a) the
form of prospectus first filed with the Commission pursuant to Rule 424(b)
with respect to the Securities or (b) the last preliminary prospectus
included in the Registration Statement filed prior to the time it becomes
effective or filed pursuant to Rule 424(a) under the Act that is delivered by
the Company to the Underwriter for delivery to purchasers of the Securities,
together with the term sheet or abbreviated term sheet filed with the
Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary
prospectus included in the Registration Statement prior to the time it
becomes effective is herein referred to as a "Preliminary Prospectus."
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. The
Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Exhibit 21
to Item 16(a) of the Registration Statement. Each of the subsidiaries of the
Company as listed in Exhibit 21 to Item 16(a) of the Registration Statement
(collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Company and each of the Subsidiaries are duly qualified to
transact business in the jurisdictions set forth opposite their names in
Schedule I hereto and, to the best of the Company's knowledge, in all other
jurisdictions in which the conduct of their business requires such
qualification. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary free and
clear of all liens, encumbrances and equities and claims, except as described
in the Registration Statement; and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding. On or prior to the Closing Date, CSN, Inc., a
Delaware corporation, shall be merged with and into the Company and all of
the business operations of the Company are conducted through the Company and
its subsidiaries.
(c) The information set forth under "Capitalization" in the
Prospectus is true and correct. The outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid
and non-assessable and were not issued in violation of any preemptive or
similar rights; and except as disclosed in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, all
of the outstanding shares of capital stock of the Company and each of the
Subsidiaries are free and clear of all liens,
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encumbrances, equities and claims or restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting. Except for the capital stock of the
Subsidiaries, the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity. No holders
of securities of the Company are entitled to have such securities registered
under the Registration Statement.
(d) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Securities nor instituted proceedings for that purpose. The Registration
Statement contains, and the Prospectus and any amendments or supplements
thereto will contain, all statements which are required to be stated therein
by, and will conform to, the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do
not omit, and will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and
will not contain, any untrue statement of material fact; and do not omit, and
will not 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; provided, however, that the
Company makes no representations or warranties as to information contained in
or omitted from the Registration Statement or the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by the Underwriter specifically for use
in the preparation thereof.
(e) The consolidated financial statements of the Company
and the Subsidiaries, together with related notes and schedules as set forth
in the Registration Statement, as well as the financial statements, together
with related notes and schedules, of Xxx Xxxxxxx, Inc., Lone Star Growers
Co., Summersun Greenhouse Co., Xxxxx Greenhouses, LLC, Signature Trees,
Xxxxx's Wholesale Greenhouses, Inc., Sunnyside Plants, Inc. and Cracon Inc.
(collectively the "Acquired Entities") present fairly the financial position
and the results of operations and cash flows of the Company and the
consolidated Subsidiaries and the Acquired Entities, at the indicated dates
and for the indicated periods. Such financial statements and related
schedules have been prepared in accordance with generally accepted principles
of accounting, consistently applied throughout the periods involved, except
as otherwise noted therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary
financial and statistical data included in the Registration Statement
presents fairly the information shown therein and such data has been compiled
on a basis consistent with the financial statements presented therein and the
books and records of the Company. The pro forma financial statements and
other pro forma financial information included in the Registration Statement
and the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been properly compiled on the
pro forma bases described herein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein. No other financial statements or
schedules of the Company or any other
3
entity are required to be included in the Registration Statement pursuant to
any requirement of the Act or any Rules or Regulations, including Rule 3-05
of Regulation S-X.
(f) Xxxxxx Xxxxxxxx LLP, Xxxx Xxxxx LLP and Xxxxxx,
Xxxxxxxxx, Xxxx & Xxxxxxxx, P.C., who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement,
are independent public accountants as required by the Act and the Rules and
Regulations.
(g) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, threatened against the Company or any of
the Subsidiaries before any court or administrative agency or otherwise which
if determined adversely to the Company or any of the Subsidiaries might
result in any material adverse change in the business, properties, assets,
operations or financial condition of the Company and of the Subsidiaries
taken as a whole or might prevent the consummation of the transactions
contemplated hereby, except as set forth in the Registration Statement.
(h) The Company and the Subsidiaries have good and
marketable title to all of the properties and assets reflected in the
financial statements (or as described in the Registration Statement)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial statements
(or as described in the Registration Statement) or which are not material in
amount. The Company and the Subsidiaries occupy their leased properties
under valid and binding leases conforming in all material respects to the
description thereof set forth in the Registration Statement.
(i) The Company and the Subsidiaries have filed all
Federal, State, local and foreign income tax returns which have been required
to be filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such taxes
have become due. All tax liabilities have been adequately provided for in
the financial statements of the Company.
(j) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the business, properties,
assets, operations or financial condition of the Company and the Subsidiaries
taken as a whole, whether or not occurring in the ordinary course of
business, and there has not been any material transaction entered into or any
material transaction that is probable of being entered into by the Company or
the Subsidiaries, other than transactions in the ordinary course of business
and changes and transactions described in the Registration Statement, as it
may be amended or supplemented. The Company and the Subsidiaries have no
material contingent obligations which are not disclosed in the Company's
financial statements which are included in the Registration Statement.
(k) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both will be, in violation of
or in default under its charter or bylaws or under any agreement, lease,
contract, indenture or other instrument or obligation to
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which it is a party or by which it, or any of its properties, is bound or any
statute, judgment, decree, order, rule or regulation applicable to the
Company or any Subsidiary and which default is of material significance in
respect of the condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole or the business, properties, assets, operations
or financial condition of the Company and the Subsidiaries taken as a whole.
Except with respect to that certain Amended and Restated Credit Agreement,
dated as of February 20, 1997, as amended, the execution and delivery of this
Agreement and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any Subsidiary is a party, or of the charter or by-laws
of the Company or any order, rule or regulation applicable to the Company or
any Subsidiary of any court or of any regulatory body or administrative
agency or other governmental body having jurisdiction which conflict, breach
or default could reasonably be expected to have a material adverse effect on
the Company.
(l) The Company and each of the Subsidiaries hold all
material licenses, certificates and permits from governmental authorities
which are necessary to the conduct of their businesses; and neither the
Company nor any of the Subsidiaries has infringed any patents, patent rights,
trade names, trademarks or copyrights, which infringement is material to the
business of the Company and the Subsidiaries taken as a whole. The Company
knows of no material infringement by others of patents, patent rights, trade
names, trademarks or copyrights owned by or licensed to the Company or any
Subsidiary.
(m) Neither the Company nor any Subsidiary is an
"investment company" or an affiliated person of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined under
the Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations of the Commission thereunder.
(n) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(o) The Company and each of the Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(p) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no
5
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(q) The Company confirms as of the date hereof that it is
in compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA (Fla. Stat.
ch. 517.075). The Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking and
Finance (the "Department"), whichever date is later, or if the information
reported or incorporated by reference in the Prospectus, if any, concerning
the Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable to
the Department.
(r) The Certificate of Designation has been duly adopted by
the Company's Board of Directors in compliance with the Company's Certificate
of Incorporation and By-Laws.
(s) The Series A Preferred Stock has been duly and validly
authorized by the Company for issuance and sale to the Underwriter pursuant
to this Agreement and the Series A Preferred Stock, when issued and delivered
to and paid for by the Underwriter in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable and not
subject to any preemptive or similar rights.
(t) The Warrant Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Warrant
Agent), will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought.
(u) The Warrants have been duly and validly authorized by
the Company, and when issued and delivered in accordance with the terms of
the Warrant Agreement and delivered to and paid for by the Underwriter in
accordance with the terms hereof
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will have been duly and validly issued and the issuance of such Warrants will
not be subject to any preemptive or similar rights.
(v) The Warrant Shares initially issuable upon exercise of
the Warrants have been duly and validly authorized and reserved for issuance
upon exercise of the Warrants and, when issued and delivered upon exercise of
the Warrants against payment of the Exercise Price (as defined in the Warrant
Agreement), the Warrant Shares will have been duly and validly issued and
will be fully paid and non-assessable, and the issuance of such Warrant
Shares will not be subject to any preemptive or similar rights.
(w) The Company has all requisite corporate power and
authority to enter into this Agreement, to issue and deliver the Securities
and Warrant Shares and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the
Company. No consent, approval, authorization or order of any court or
governmental agency or body is required for the performance of this Agreement
by the Company or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained and such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and distribution of the Securities by the Underwriter.
(x) Except as provided in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there are no consensual encumbrances or restrictions on the ability of any
Subsidiary (i) to pay dividends or make any other distributions on such
Subsidiary's capital stock or to pay any indebtedness owed to the Company or
any other Subsidiary, (ii) to make any loans or advances to, or investments
in, the Company or any other Subsidiary, or (iii) to transfer any of its
property or assets to the Company or any other Subsidiary.
(y) The Securities, the Warrant Agreement and this
Agreement will conform in all material respects to the descriptions thereof
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase
from the Company $40,000,000 aggregate amount of the Securities for
$____________. Certificates in definitive form for the Securities that the
Underwriter has agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Underwriter
requests upon notice to the Company at least 48 hours prior to the Closing
Date, shall be delivered by or on behalf of the Company to the Underwriter,
against payment by or on behalf of the Underwriter of the purchase price
therefor by wire transfer payable in immediately available funds to the
account of the Company. Such delivery of and payment for the Securities
shall be made at the offices of ____________________________________________
_____________________, at 10:00 A.M., Eastern Standard Time, on ________
___,1997, or at such other place, time or date as the Underwriter and the
Company may agree upon or as the Underwriter may determine pursuant to
7
Section 7(a) hereof, such time and date of delivery against payment being
herein referred to as the "Closing Date." The Company will make such
certificate or certificates for the Securities available for checking and
packaging by the Underwriter at the offices in New York, New York of BT Xxxx.
Xxxxx at least 24 hours prior to the Closing Date.
4. OFFERING BY THE UNDERWRITER. After the Registration
Statement becomes effective, the Underwriter proposes to offer for sale to
the public the Securities at the price and upon the terms set forth in the
Prospectus.
8
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriter that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective promptly. If
required, the Company will file the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time
period required by Rule 424(b) under the Act. During any time when a
prospectus relating to the Securities is required to be delivered under the
Act, (i) the Company will comply with all requirements imposed upon it by the
Act and the Rules and Regulations to the extent necessary to permit the
continuance of sales of or dealings in the Securities in accordance with the
provisions hereof and of the Prospectus, as then amended or supplemented, and
(ii) the Company will not file with the Commission the Prospectus or any
amendment or supplement to such Prospectus or any amendment to the
Registration Statement of which the Underwriter shall not previously have
been advised and furnished a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Underwriter shall not have
given its consent. The Company will prepare and file with the Commission, in
accordance with the Act and the Rules and Regulations, promptly upon the
reasonable request by the Underwriter or counsel for the Underwriter, any
amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the Underwriter, and will use its best
efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission promptly. The Company will advise the
Underwriter, promptly after it receives notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Underwriter of each such
filing or effectiveness.
(b) The Company will advise the Underwriter promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission,
(C) of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop
order preventing or suspending the use of the Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(c) The Company will deliver to, or upon the order of, the
Underwriter, from time to time, as many copies of any Preliminary Prospectus
as the Underwriter may reasonably request. The Company will deliver to, or
upon the order of, the Underwriter during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in
final form, or as thereafter amended or supplemented, as the Underwriter may
reasonably request. The Company will deliver to the Underwriter at or before
the Closing Date, one copy of the Registration Statement and all amendments
thereto including all exhibits filed therewith, and will deliver to the
Underwriter such number of copies of the Registration
9
Statement (including such number of copies of the exhibits filed therewith
that may reasonably be requested), and of all amendments thereto, as the
Underwriter may reasonably request.
(d) If during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer, any event shall occur as
a result of which, in the judgment of the Company or in the reasonable
opinion of the Underwriter, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that 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 the law.
(e) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration Statement,
an earning statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and will advise you in writing when such statement has
been so made available.
(f) The Company will, for a period ending on the date no
Securities are outstanding, deliver to the Underwriter copies of annual
reports and copies of all other documents, reports and information furnished
by the Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission pursuant
to the Act or the Exchange Act. During such time, the Company will deliver to
the Underwriter similar reports with respect to significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated
in the Company's financial statements.
(g) The Company shall apply the net proceeds of its sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in such a
manner as would require the Company or any of the Subsidiaries to register as
an "investment company" under the 1940 Act and the rules and regulations
thereunder.
(i) The Company will cooperate with the Underwriter in
arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Underwriter
may designate and will continue such qualifications in effect for as long as
may be necessary to complete the distribution of the Securities; PROVIDED,
HOWEVER, that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction.
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(j) Prior to the Closing Date, the Company will furnish to
the Underwriter, as soon as they have been prepared, a copy of any unaudited
interim consolidated financial statements of the Company for any period
subsequent to the period covered by its most recent financial statements
appearing in the Registration Statement and Prospectus.
(k) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
6. EXPENSES. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether
or not the transactions contemplated herein are consummated or this Agreement
is terminated pursuant to Section 10 hereof, including all costs and expenses
incident to (i) the printing, word processing, filing or other production of
documents with respect to the transactions, including any costs of printing
the registration statement originally filed with respect to the Securities
and any amendment thereto, any Preliminary Prospectus and the Prospectus and
any amendment or supplement thereto, any "Blue Sky" memoranda and the
Certificate of Designation, (ii) all arrangements relating to the delivery to
the Underwriter of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or
advisors retained by the Company, (iv) preparation (including printing),
issuance and delivery to the Underwriter of the Securities, (v) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and fees and disbursements of counsel for the
Underwriter relating thereto, (vi) the filing fees of the Commission and the
National Association of Securities Dealers, Inc. relating to the Securities
(including the fees, disbursements and charges of counsel to the Underwriter
in connection therewith), (vii) expenses of the Company in connection with
any meetings with prospective investors in the Securities (viii) fees and
expenses of the transfer agent for the Series A Preferred Stock and of the
Warrant Agent; and (ix) any fees charged by investment rating agencies for
the rating of the Securities. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriter set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 10 hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Underwriter, the
Company will reimburse the Underwriter upon demand (accompanied by
documentation) for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by the Underwriter in connection
with the proposed purchase and sale of the Securities.
7. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligation
of the Underwriter to purchase and pay for the Securities shall, in its sole
discretion, be subject to the following conditions:
(a) If the registration statement originally filed with
respect to the Securities or any amendment thereto filed prior to the Closing
Date has not been declared effective as of the time of execution hereof, the
Registration Statement or such amendment shall have been declared effective
not later than 10:00 a.m., New York City time, on the date on which
11
the amendment to the registration statement originally filed with respect to
the Securities or to the Registration Statement, as the case may be,
containing information regarding the initial public offering price of the
Securities has been filed with the Commission, or such later time and date as
shall have been consented to by the Underwriter; if required, the Prospectus
and any amendment or supplement thereto shall have been filed in accordance
with Rule 424(b) under the Act; no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto and no proceedings for
those purposes shall have been instituted or, to the knowledge of the Company
or the Underwriter, threatened or are contemplated by the Commission; and the
Company shall have complied with or satisfactorily responded to any request
of the Commission for additional information.
(b) The Underwriter shall have received an opinion in form
and substance satisfactory to the Underwriter, dated the Closing Date, of
Brownstein, Hyatt, Xxxxxx & Xxxxxxxxxx, P.C., counsel for the Company,
substantially in the form of Exhibit A hereto.
(c) The Underwriter shall have received an opinion, dated
the Closing Date, of Xxxxxx & Xxxxxxx, counsel for the Underwriter, with
respect to certain legal matters relating to this Agreement, and such other
related matters as the Underwriter may require. In rendering such opinion,
Xxxxxx & Xxxxxxx shall have received and may rely upon such certificates and
other documents and information as they may reasonably request to pass upon
such matters. In addition, in rendering their opinion, Xxxxxx & Xxxxxxx may
state that their opinion is limited to matters of New York and Delaware
General Corporation Law and federal law.
(d) The Underwriter shall have received from Xxxxxx
Xxxxxxxx LLP, Xxxx Xxxxx LLP and Xxxxxx, Xxxxxxxxx, Xxxx & Xxxxxxx, P.C., a
letter or letters dated, respectively, the date hereof and the Closing Date,
each in form and substance satisfactory to the Underwriter.
(e) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date; the Company shall
have performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date; and subsequent to the date of the most recent financial statements in
the Prospectus, there shall have been no material adverse change in the
business, properties, assets, operations or financial condition of the
Company and the Subsidiaries, taken as a whole, except as set forth in, or
contemplated by, the Registration Statement and the Prospectus.
(f) The sale of the Securities by the Company hereunder
shall not be enjoined (temporarily or permanently) on the Closing Date.
(g) Subsequent to the effective date of the Registration
Statement, there shall not have occurred any material adverse change, or any
event that would have a
12
material adverse effect on the business, properties, assets, operations or
financial condition of the Company and the Subsidiaries, taken as a whole.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except
in each case as described in or as contemplated by the Prospectus, none of
the Company or any of the Subsidiaries shall have incurred any liabilities or
obligations, direct or contingent (other than in the ordinary course of
business) that are material to the Company and the Subsidiaries, taken as a
whole, or entered into any transactions not in the ordinary course of
business that are material to the business, properties, assets, operations or
financial condition of the Company and the Subsidiaries, taken as a whole,
and, other than as contemplated by the Prospectus, there shall not have been
any change in the capital stock or long-term indebtedness of the Company or
the Subsidiaries that is material to the business, properties, assets,
operations or financial condition of the Company and the Subsidiaries, taken
as a whole.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
conduct of the business and operations of the Company or any of the
Subsidiaries has not been interfered with by strike, fire, flood, hurricane,
accident or other calamity (whether or not insured) or by any court or
governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company or any of the Subsidiaries have not
sustained any loss or damage (whether or not insured) as a result of any such
occurrence, except any such interference, loss or damage which would not have
a material adverse effect on the business, properties, assets, operations or
financial condition of the Company and the Subsidiaries, taken as a whole.
(j) The Underwriter shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by its Chief
Executive Officer or President, and the Chief Financial Officer of the
Company, on behalf of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement
are true and correct in all material respects as of the date hereof
and as if made on and as of the Closing Date, and the Company has
performed all covenants and agreements and satisfied hereunder all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement or any amendment thereto and no proceedings for such purpose
has been instituted or, to the knowledge of the Company, threatened or
are contemplated by the Commission;
(iii) Subsequent to the effective date of the Registration Statement, there
has not occurred any event or events that, individually or in the
aggregate, would have a material adverse effect on the business,
properties, assets, operations or financial condition of the Company
and the Subsidiaries, taken as a whole;
13
(iv) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except in each case as
described in or as contemplated by the Prospectus, none of the Company
or any of the Subsidiaries has incurred any liabilities or
obligations, direct or contingent (other than in the ordinary course
of business) that are material to the Company and the Subsidiaries,
taken as a whole, or entered into any transactions not in the ordinary
course of business that are material to the business, properties,
assets, operations or financial condition of the Company and the
Subsidiaries, taken as a whole, and, other than as contemplated by the
Prospectus, there shall not have been any change in the capital stock
or long-term indebtedness of the Company or the Subsidiaries that is
material to the business, properties, assets, operations or financial
condition of the Company and the Subsidiaries, taken as a whole;
(v) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the conduct of the
business and operations of the Company or any of the Subsidiaries has
not been interfered with by strike, fire, flood, hurricane, accident
or other calamity (whether or not insured) or by any court or
governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company or any of the Subsidiaries have
not sustained any loss or damage (whether or not insured) as a result
of such occurrence, except any such interference, loss or damage which
would not have a material adverse effect on the business, properties,
assets, operations or financial condition of the Company and the
Subsidiaries, taken as a whole; and
(vi) The sale of the Securities by the Company hereunder has not been
enjoined (temporarily or permanently).
On or before the Closing Date, the Underwriter and counsel for
the Underwriter shall have received such further documents, opinions,
certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such opinions, certificates, letters, schedules, documents
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Underwriter and counsel for the Underwriter. The Company
shall furnish to the Underwriter such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in such
quantities as the Underwriter shall reasonably request.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter, and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become
14
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in (A) the registration statement originally filed with
respect to the Securities or any amendment thereto or any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto or
(B) any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in
order to qualify the Securities under the securities or "Blue Sky"
laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in such registration
statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, the Underwriter and each such controlling
person for any legal or other expenses incurred by the Underwriter or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, the Company will 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 any untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter specifically for use therein; and PROVIDED,
FURTHER, that the Company will not be liable to the Underwriter or any person
controlling the Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if the person asserting
any such loss, claim, damage or liability purchased Securities from the
Underwriter in reliance upon the Preliminary Prospectus but was not sent or
given a copy of the Prospectus (as amended or supplemented) at or prior to
the written confirmation of the sale of such Securities to such person in any
case where such delivery of the Prospectus (as so amended or supplemented) is
required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(c) of this Agreement. This indemnity agreement will be in addition
to any liability that the Company may otherwise have to the indemnified
parties. The Company shall not be liable under this Section 8 for any
settlement of any claim or action effected without its consent, which shall
not be unreasonably withheld.
(b) The Underwriter will indemnify and hold harmless each
of the Company, its directors, its officers who signed 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 against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act,
15
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or any Application
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated in the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application, 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 in reliance upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein;
and, subject to the limitation set forth immediately preceding this clause,
will reimburse, as incurred, any legal or other expenses incurred by the
Company or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any
liability that the Underwriter may otherwise have to the indemnified parties.
The Underwriter shall not be liable under this Section 8 for any settlement
of any claim or action effected without its consent, which shall not be
unreasonably withheld.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraphs (a) and (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; PROVIDED, HOWEVER, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action,
then, in each such case, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and approval by such
indemnified party of
16
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred
by such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance with
the proviso to the immediately preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not
be liable for the expenses of more than one separate counsel (in addition to
local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general allegations
or circumstances, designated by the Underwriter in the case of paragraph (a)
of this Section 8 or the Company in the case of paragraph (b) of this Section
8, representing the indemnified parties under such paragraph (a) or paragraph
(b), as the case may be, who are parties to such action or actions) or (ii)
the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party, unless such indemnified party waived in
writing its rights under this Section 8, in which case the indemnified party
may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and
the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted
by applicable law, not only such relative benefits but also the relative
fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof). The relative
benefits received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriter.
The relative fault of the parties 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 on the one hand, or the Underwriter on
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and
the Underwriter agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Underwriter
shall not be obligated to make contributions hereunder that in the aggregate
exceed
17
the total underwriting discounts and commissions received by the Underwriter
under this Agreement, less the aggregate amount of any damages that the
Underwriter has otherwise been required to pay by reason of the untrue or
alleged untrue statements or the omissions or alleged omissions to state a
material fact, and 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. For
purposes of this paragraph (d), each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Underwriter,
and each director of the Company, each officer of the Company who signed 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, shall have the same rights to contribution as the Company.
9. SURVIVAL CLAUSE. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers and the Underwriter set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by
or on behalf of the Company, any of its officers or directors, the
Underwriter or any controlling person referred to in Section 8 hereof and
(ii) delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8
hereof shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement.
10. TERMINATION.
(a) This Agreement may be terminated in the sole discretion
of the Underwriter by notice to the Company given prior to the Closing Date
in the event that the Company shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date:
(i) the Company shall have sustained any loss or interference with respect
to its businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Underwriter, has had or has
a material adverse effect the business, properties, assets, operations
or financial condition of the Company and the Subsidiaries, taken as a
whole, or there shall have been, in the sole judgment of the
Underwriter, any material adverse change, or any development involving
a prospective material adverse change (including without limitation a
change in management or control of the Company), in the business,
properties, assets, operations or financial condition of the Company
and the Subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been
suspended or minimum or
18
maximum prices shall have been established on any such exchange or
trading in securities of the Company shall have been suspended;
(iii) a banking moratorium shall have been declared by New York or United
States authorities; or
(iv) there shall have been (A) an outbreak or escalation of hostilities
between the United States and any foreign power, or (B) an outbreak or
escalation of any other insurrection or armed conflict involving the
United States or any other national or international calamity or
emergency, or (C) any material change in the financial markets of the
United States which, in the sole judgment of the Underwriter, makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section
10 shall be without liability of any party to any other party except as
provided in Section 9 hereof.
11. INFORMATION SUPPLIED BY THE UNDERWRITER. The statements set
forth in the last paragraph on the cover page of the Prospectus, the
stabilization legend on the page following the cover page of the Prospectus
and the first, second, third, fourth, fifth (other than the first sentence)
and sixth paragraphs under the heading "Underwriting" in the Prospectus (to
the extent such statements relate to the Underwriter) constitute the only
information furnished by the Underwriter to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriter confirm that such statements (to
the extent such statements relate to the Underwriter) are correct.
12. NOTICES. All communications hereunder shall be in writing
and, if sent to the Underwriter, shall be mailed or delivered or telecopied
and confirmed in writing to BT Xxxx. Xxxxx Incorporated, 000 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Corporate
Finance Department; if sent to the Company, shall be mailed or delivered or
telecopied and confirmed in writing to the Company at 0000 Xxxxxxx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxx; with a copy to
Xxxxxxxxxx Xxxxx Xxxxxx & Xxxxxxxxxx, P.C., 000 Xxxxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.
13. SUCCESSORS. This Agreement shall inure to the benefit of
and be binding upon the Underwriter, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 8 of
this Agreement shall also be for the benefit of any person or persons who
control the Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Underwriter
contained in Section 8 of this Agreement shall also be for the benefit of the
directors of the Company, its officers who have signed the Registration
19
Statement and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from the Underwriter will be deemed a successor
because of such purchase.
14. APPLICABLE LAW. The validity and interpretation of this
agreement, and the terms and conditions set forth herein shall be governed by
and construed in accordance with the laws of the state of New York, without
giving effect to any provisions relating to conflicts of law.
15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Underwriter.
Very truly yours,
COLOR SPOT NURSERIES, INC.
By:
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT ALEX. BROWN INCORPORATED
By:
Name:
Title:
21
Exhibit A
Opinion of Brownstein, Hyatt, Xxxxxx & Xxxxxxxxxx, P.C.
(a) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement; to the
knowledge of such counsel, based solely upon a review of the corporate
records of the Company, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to Item 16(a) of the Registration Statement
(the "Subsidiaries"); each of the Subsidiaries has been duly organized and is
validly existing as a corporation or limited partnership in good standing
under the laws of the jurisdiction of its incorporation, with corporate or
partnership power and authority to own or lease its properties and conduct
its business as described in the Registration Statement (provided that such
counsel need not express any opinion as to the organization of Oda Nursery,
Inc.); the Company and each of the Subsidiaries are duly qualified to
transact business in the jurisdictions set forth on Schedule I hereto; the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued and are fully paid and nonassessable and,
based solely upon the review of the corporate or partnership records of each
such Subsidiary, are owned by the Company or a Subsidiary; to the knowledge
of such counsel, based solely upon the review of the corporate or
partnership records of each such Subsidiary, the outstanding shares of
capital stock of each of the Subsidiaries are owned free and clear of all
liens, encumbrances and equities and claims (other than those in favor of
Credit Agricole Indosuez, as agent for the Company's senior lenders and
those arising under applicable securities laws), and no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into any shares of capital stock or of
ownership interests in the Subsidiaries are outstanding.
(b) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of the Company's Common Stock have been duly authorized;
the outstanding shares of the Company's Common Stock (i) issued in connection
with that certain Recapitalization dated as of December 31, 1996 (the
"Recapitalization") and (ii) issued since the date of the Recapitalization
have been duly authorized and validly issued and are fully paid and
nonassessable. Based solely upon the review of the Company's and the
Subsidiaries' minute books, to such counsel's knowledge, except as otherwise
stated in the Prospectus, all of the outstanding shares of capital stock of
the Subsidiaries are owned, directly or indirectly, by the Company, free and
clear of all perfected security interests and, to the knowledge of such
counsel, free and clear of all other restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting.
(c) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, based solely on the review of
the corporate minute book of the
A-1
Company, there are no outstanding securities of the Company convertible or
exchangeable into or evidencing the right to purchase or subscribe for any
shares of capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating the
Company to issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as described in the
Prospectus, to the knowledge of such counsel, no holder of any securities of
the Company or any other person has the right, contractual or otherwise,
which has not been satisfied or effectively waived, to cause the Company to
sell or otherwise issue to them, or to permit them to underwrite the sale of,
any shares of Common Stock or the right to have any shares of Common Stock or
other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities
of the Company.
(d) The Registration Statement has become effective under
the Act and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the
Act; and any required filing of the Prospectus pursuant to Rule 424(b) under
the Act has been made in accordance with Rules 424(b) and 430A under the Act.
(e) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material respects
with the requirements of the Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements and related schedules therein, including the notes
thereto and supporting schedules and other financial and statistical data
included therein or omitted therefrom).
(f) The statements under the captions
"Management--Compensation Committee Interlocks and Insider Participation,"
"Management--Limitation on Directors' Liability and Indemnification,"
"Description of Capital Stock," "Description of Units," "Description of
Series A Preferred Stock," "Description of Warrants" and "Certain
Definitions" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, fairly summarize
in all material respects the information called for with respect to such
documents and matters.
(g) The information required to be set forth in the
Registration Statement in answer to Items 14 and 15 of Form S-1 to such
counsel's knowledge is accurately and adequately set forth therein in all
material respects.
(h) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(i) The execution and delivery of the Underwriting
Agreement and the consummation of the transactions herein contemplated do not
and will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the charter or
A-2
bylaws of the Company, or any agreement filed as an exhibit to the
Registration Statement which the Company or any of the Subsidiaries may be
bound or of any federal or New York statute, rule or regulation or Delaware
General Corporation Law known to such counsel to be applicable to the Company
(other than federal or state securities laws, which are specifically
addressed elsewhere herein) which conflict, breach or default could
reasonably be expected to have a material adverse effect on the Company.
(j) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
(k) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative
or other governmental body by the Company is necessary in connection with the
execution and delivery of the Underwriting Agreement and the consummation of
the transactions herein contemplated (other than as may be required by the
NASD or as required by state securities and Blue Sky laws as to which such
counsel need express no opinion) except such as have been obtained or made,
specifying the same.
(l) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by the Underwriting
Agreement, and application of the net proceeds therefrom as described in the
Prospectus, required to register as an "investment company" or an affiliated
person of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the 1940 Act and the rules and
regulations thereunder.
(m) The Certificate of Designation has been duly adopted by
the Company's Board of Directors in compliance with the Company's Certificate
of Incorporation and By-Laws.
(n) The Series A Preferred Stock has been duly authorized
by the Company for issuance and sale to the Underwriter pursuant to the
Underwriting Agreement and are validly issued, fully paid and non-assessable
and, to the knowledge of such counsel, not subject to any preemptive or
similar rights.
(o) The Warrant Agreement has been duly and validly
authorized, executed and delivered by the Company and (assuming due
authorization, execution and delivery by the Warrant Agent) is the legally
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(p) The Warrants have been duly and validly authorized,
issued and delivered in accordance with the terms of the Warrant Agreement,
and, to the knowledge of such counsel, the issuance of such Warrants is not
subject to any preemptive or similar rights.
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(q) The Warrant Shares initially issuable upon exercise of
the Warrants have been duly and validly authorized and reserved for issuance
upon exercise of the Warrants and, when issued and delivered upon exercise of
the Warrants against payment of the Exercise Price as provided in the Warrant
Agreement, the Warrant Shares will have been duly and validly issued and will
be fully paid and non-assessable, and, to such counsel's knowledge, the
issuance of such Warrant Shares will not be subject to any preemptive or
similar rights.
(r) CSN, Inc., a Delaware corporation, has been merged with
and into the Company, with the Company surviving such merger, under the
General Corporation Law of the State of Delaware.
In addition to the matters set forth above, such counsel shall also
furnish a separate written opinion to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but
after giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Act) and as of the Closing Date, 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,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading (except that such counsel need
express no opinion as to financial statements and related schedules therein,
including the notes thereto and supporting schedules and other financial and
statistical data included therein or omitted therefrom). With respect to
such statement, such counsel may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
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