3,150,000 Shares
XXXXXX XXXXXX, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 1997
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXX SECURITIES
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Bailly, Inc., a Delaware corporation (the "Company"),
and the Selling Stockholders named in Schedule II hereto (collectively, the
"Selling Stockholders"), severally propose to sell an aggregate of 3,150,000
shares of common stock, par value $0.01, of the Company (the "Firm Shares"), to
the several underwriters named in Schedule I hereto (the "Underwriters"). The
Firm Shares consist of 2,500,000 shares to be issued and sold by the Company and
650,000 outstanding shares to be sold by the Selling Stockholders. The Selling
Stockholders also propose to issue and sell to the several Underwriters not more
than 472,500 additional shares of common stock, par value $0.01, of the Company
(the "Additional Shares"), if requested by the Underwriters as provided in
Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively called the "Shares". The shares of common stock of the Company to
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "Common Stock". The Company and the Selling
Stockholders are hereinafter collectively called the "Sellers".
1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission
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(the "Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Act"), a registration statement on Form S-1 (File No.
333-22207) including a prospectus relating to the Shares, which may be amended.
The registration statement, as amended at the time when it becomes effective,
including a registration statement (if any) filed pursuant to Rule 462(b) under
the Act increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to
as the Registration Statement; and the prospectus in the form first used to
confirm sales of the Shares is hereinafter referred to collectively as the
"Prospectus."
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Company agrees to issue and sell 2,500,000 Firm
Shares, (ii) each Selling Stockholder agrees, severally and not jointly, to sell
the number of Firm Shares set forth opposite such Selling Stockholder's name in
Schedule II hereto and (iii) each Underwriter agrees, severally and not jointly,
to purchase from each Seller at a price per share of $______ (the "Purchase
Price"), the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Firm Shares to be sold by such Seller as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, (i) each of the
Selling Stockholders agrees severally and not jointly to issue and sell up to
the number of Additional Shares set forth opposite such Selling Stockholder's
name in Schedule II hereto and (ii) the Underwriters shall have the right to
purchase, severally and not jointly, up to an aggregate of 472,500 Additional
Shares from the Selling Stockholders at the Purchase Price. Additional Shares
may be purchased solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. The Underwriters may exercise
their right to purchase Additional Shares in whole or in part from time to time
by giving written notice thereof to the Selling Stockholders within 30 days
after the date of this Agreement. You shall give any such notice on behalf of
the Underwriters and such notice shall specify the aggregate number of
Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof. The date specified in any such notice shall be
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a business day (i) no earlier than the Closing Date (as hereinafter defined),
(ii) no later than ten business days after such notice has been given and (iii)
no earlier than two business days after such notice has been given. The maximum
number of Additional Shares to be purchased from each such Selling Stockholder
is set forth on Schedule II hereto. If less than the maximum number of
Additional Shares are to be purchased hereunder, such Selling Stockholders,
severally and not jointly, agree to sell to the Underwriters the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased by the Underwriters as the maximum number of
Additional Shares to be sold by each of such Selling Stockholders bears to the
total maximum number of Additional Shares. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Selling Stockholders the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
such Selling Stockholder as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I bears to the total number of Firm Shares.
The Sellers hereby agree, severally and not jointly, and the
Company shall, concurrently with the execution of this Agreement, deliver an
agreement executed by each of the directors and officers of the Company who is
not a Selling Stockholder pursuant to which each such person agrees, not to (a)
directly or indirectly offer, pledge, sell, contract to sell, grant any option
to purchase, sell any option or contract to purchase, grant any warrant for the
sale of or otherwise dispose of any common stock of the Company (including
without limitation, shares of common stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Commission and shares of common stock which may be issued
upon exercise of a stock option or warrant) or any securities convertible into
or exercisable or exchangeable for such common stock or (b) in any other manner
(including by way of swap) transfer all or a portion of the economic
consequences associated with the ownership of any such common stock, except to
the Underwriters pursuant to this Agreement, for a period of 180 days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plan and (ii) the Company may issue shares of its common
stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof.
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3. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the third or fourth business day unless otherwise permitted by the Commission
pursuant to Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), following the date of the initial public offering (the "Closing
Date"), at the offices of Xxxxxx Xxxxxx & Xxxxxxx in New York, New York or at
such other place as you shall designate. The Closing Date and the location of
delivery of and the form of payment for the Firm Shares may be varied by
agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the offices of
Xxxxxx Xxxxxx & Xxxxxxx in New York, New York or at such other place as you
shall designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of and
the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
Certificates for the Shares shall be registered in such names
and issued in such denominations as you shall request in writing not later than
two full business days prior to the Closing Date or an Option Closing Date, as
the case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer payable in New York Clearing House or similar next day funds to the
order of the Company or the Custodian (as defined herein), as the case may be.
5. Agreements of the Company. The Company agrees with
you:
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(a) To use its best efforts to cause the Registration
Statement to become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment to it becomes
effective, (ii) of the receipt of comments from the Commission relating
to the Registration Statement, (iii) of any request by the Commission
for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purposes, and (v) of the
happening of any event during the period referred to in paragraph (e)
below which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires the
making of any additions to or changes in the Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, three signed copies of
the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits, and to furnish to you and
each Underwriter designated by you such number of conformed copies of
the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or to make any amendment or supplement to the
Prospectus, of which you shall not previously have been advised or to
which you shall have reasonably objected in writing; and to prepare and
file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
which in the opinion of counsel for the Underwriters is necessary or
required in connection with the distribution of the Shares by you, and
to use its best efforts to cause the same to become promptly effective.
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(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish to each Underwriter and dealer as
many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the reasonable opinion of counsel
for the Underwriters it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented,
will not in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify,
such number of copies thereof as such Underwriter or dealers may
reasonably request.
(g) Prior to any public offering of the Shares, to cooperate
with you and your counsel in connection with the registration or
qualification of the Shares for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws
of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its stockholders
as soon as reasonably practicable an earnings statement covering a
period of at least twelve months after the effective date (as defined
in Rule 158 of the Act) of the Registration Statement (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing
when such statement has been so made available.
(i) During the period of five years after the date of
this Agreement, (i) to mail as soon as reasonably practicable
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after the end of each fiscal year to the record holders of its Common
Stock a financial report of the Company and its subsidiaries on a
consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to
include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated
statement of shareholders' equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for the
preceding year, certified by independent certified public accountants,
and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly
period of each fiscal year) to such holders, an unaudited consolidated
balance sheet, an unaudited consolidated statement of operations and an
unaudited consolidated statement of cash flows (and similar financial
reports of all unconsolidated subsidiaries, if any) as of the end of
and for such period, and for the period from the beginning of such year
to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the holders of Common
Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i)
the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
each preliminary prospectus and all amendments and supplements to any
of them prior to or during the period specified in paragraph (e), (ii)
the printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in paragraph (e), (iii)
the printing and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection
with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing
and delivery), (iv) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel
for the Underwriters relating to such registration or qualification and
memoranda relating thereto), (v) filings and
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clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Shares on the
Nasdaq National Market (the "NNM"), (vii) furnishing such copies of the
Registration Statement, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the
offering or sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold and (viii) the performance by the Company of
its other obligations under this Agreement.
(l) To use its best efforts to maintain the inclusion of the
Common Stock on the NNM (or on a national securities exchange) for a
period of five years after the effective date of the Registration
Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or any Option Closing Date, as
the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph (b)
do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
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(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, and each
Registration Statement filed pursuant to Rule 462(b) under the Act, if
any, complied when so filed in all material respects with the Act; and
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Company and each of its significant subsidiaries as
defined in Rule 1-02(w) of Regulation S-X (the "Subsidiaries") has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties,
and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would
not have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
(e) All of the outstanding shares of capital stock of, or
other ownership interests in, each of the Company's Subsidiaries have
been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights which have not been
waived; and the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar rights.
(g) The authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters in
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all material respects to the description thereof contained in
the Prospectus.
(h) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of the
business of the Company and its Subsidiaries, taken as a whole, to
which the Company or any of its Subsidiaries is a party or by which it
or any of its Subsidiaries or their respective property is bound except
for such defaults which have been waived or which would not,
individually or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body which
has not been obtained (except as such may be required under the
securities or Blue Sky laws of the various states) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
its Subsidiaries or any agreement, indenture or other instrument to
which it or any of its Subsidiaries is a party or by which it or any of
its Subsidiaries or their respective property is bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company, any of its Subsidiaries or their
respective property.
(j) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which any of their
respective property is the subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No
contract or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement is not so described or filed as required.
(k) Neither the Company nor any of its Subsidiaries has
violated any foreign, federal, state or local law or
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regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case might result
in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its Subsidiaries,
taken as a whole.
(l) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business; the
Company and each of its Subsidiaries has fulfilled and performed all of
its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except
as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to the Company or any of its
Subsidiaries.
(m) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or
results of operation of the Company and its Subsidiaries, taken as a
whole, the Company and each of its Subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being
owned by it. All leases to which the Company or any of its Subsidiaries
is a party are valid and binding and no default has occurred or is
continuing thereunder which might result in any material adverse change
in the business, prospects, financial condition or results of operation
of the Company and its Subsidiaries, taken as a whole, and the Company
and its Subsidiaries enjoy peaceful and undisturbed possession under
all such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the
Company or such Subsidiary.
(n) The Company and each of its Subsidiaries maintains
reasonably adequate insurance.
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(o) Ernst & Young LLP are independent public accountants
with respect to the Company as required by the Act.
(p) The Company owns or possesses adequate rights with respect
to the use of all trade secrets, know-how, propriety techniques,
including processes and substances, trademarks, service marks, trade
names and copyrights (collectively, "Intellectual Property") described
or referred to in the Prospectus as owned or used by it, or which are
necessary for the conduct of its business as described in the
Prospectus, other than Intellectual Property the lack of which would
not reasonably be expected to result in any material adverse change in
the business, prospects, financial condition or results of operation of
the Company and no such rights as are material to the business and
prospects of the Company expire or are subject to termination at the
election of another party without cause or the Company's consent at a
time or under circumstances which would result in any material adverse
change in the business, prospects, financial condition or results of
operation of the Company. The Company has not received any notice of
infringement of or conflict with asserted rights of others with respect
to any patents, patent rights, inventions, trade secrets, know-how,
proprietary techniques, including processes and substances, trademarks,
service marks, trade names or copyrights which would result in any
material adverse change in the business, prospects, financial condition
or results of operation of the Company.
(q) Neither the Company nor any of its Subsidiaries is
involved in any labor dispute which, either individually or in the
aggregate, would reasonably be expected to result in any material
adverse change in the business, prospects, financial condition or
results of operation of the Company or any of its Subsidiaries, nor, to
the knowledge of the Company, is any such dispute threatened.
(r) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated or unconsolidated, as the case may be, financial position,
results of operations and changes in financial position of the Company
and its Subsidiaries on the basis stated in the Registration Statement
at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed therein; and the other financial
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and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
is, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and
records of the Company. The pro forma financial statements and data set
forth in the Prospectus presents fairly in all material respects the
information shown therein, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
information, has 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
therein are appropriate under the circumstances.
(s) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(t) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company, except the Selling Stockholders with respect to the
Registration Statement.
(u) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(v) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act, to register the Common Stock, has
filed an application to list the Shares on the NNM, and has received
notification that the listing has been approved, subject to notice of
issuance.
(w) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any Subsidiary thereof except as otherwise disclosed in the
Prospectus.
(x) Each of the Company and its Subsidiaries 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
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generally accepted accounting principles and to maintain asset
accountability; (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 the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(y) All material tax returns required to be filed by each of
the Company and its Subsidiaries in any jurisdiction have been filed,
other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or its Subsidiaries
have been paid, other than those being contested in good faith and for
which adequate reserves have been provided.
7. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder severally and not jointly represents and
warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and
has, and on the Closing Date (and Option Closing Date, if applicable)
will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to
this Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this
Agreement and the Custody Agreement between the Selling Stockholders
and State Street Bank and Trust Company, as Custodian (the "Custody
Agreement"), and to sell, assign, transfer and deliver such Shares in
the manner provided herein and therein, and this Agreement and the
Custody Agreement have been duly authorized, executed and delivered by
such Selling Stockholder and each of this Agreement and the Custody
Agreement is a valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by applicable law.
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(d) The power of attorney signed by such Selling Stockholder
appointing Xxxxx-Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxx, or either one of
them, as his attorney-in-fact to the extent set forth therein with
regard to the transactions contemplated hereby and by the Registration
Statement and the Custody Agreement has been duly authorized, executed
and delivered by or on behalf of such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder enforceable in
accordance with its terms, and, pursuant to such power of attorney,
such Selling Stockholder has authorized Xxxxx-Xxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx, or either one of them, to execute and deliver on his
behalf this Agreement and any other document necessary or desirable in
connection with the transactions contemplated hereby and to deliver the
Shares to be sold by such Selling Stockholder pursuant to this
Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act,
such Selling Stockholder has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement
by such Selling Stockholder, compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may be
required under the Act, state securities laws or Blue Sky laws) and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, organizational documents of such
Selling Stockholder, if not an individual, or any agreement, indenture
or other instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or property of such Selling Stockholder
is bound, or violate or conflict with any laws, administrative
regulation or ruling or court decree applicable to such Selling
Stockholder or property of such Selling Stockholder.
(g) Each of the Registration Statement and Prospectus
does not contain an untrue statement of a material fact or
DRAFT: June 6, 1997
-15-
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and the
preliminary prospectus does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(h) At any time during the period described in paragraph 5(e)
hereof, if there is any change in the information referred to in
paragraph 7(g) above, such Selling Stockholder will immediately notify
you of such change.
8. Indemnification. (a) The Company and each Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein. Notwithstanding the
foregoing, the aggregate liability of any Selling Stockholder pursuant to the
provisions of this paragraph shall be limited to an amount equal to the
aggregate purchase price received by such Selling Stockholder from the sale of
such Selling Stockholder's Shares hereunder; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages and liabilities and judgments purchased Shares, or
any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended and supplemented) would have cured
DRAFT: June 6, 1997
-16-
the defect giving rise to such loss, claim, damage, liability or
judgment.
(b) In case any action shall be brought against any
Underwriter or any person controlling such Underwriter, based upon any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company and the Selling Stockholders, such Underwriter shall
promptly notify the Company and the Selling Stockholders in writing and the
Company and the Selling Stockholders shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses. Any Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the employment of such counsel has been specifically authorized in writing
by the Company, (ii) the Company and the Selling Stockholders shall have failed
to assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both such Underwriter or such
controlling person and the Company or any Selling Stockholder, as the case may
be, and such Underwriter or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company or the
Selling Stockholders, as the case may be, (in which case the Company and the
Selling Stockholders shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company and the Selling Stockholders shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in writing
by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and shall be Xxxxxx
Xxxxxx & Xxxxxxx or another firm reasonably acceptable to the Company and that
all such fees and expenses shall be reimbursed as they are incurred). A Seller
shall not be liable for any settlement of any such action effected without the
written consent of such Seller but if settled with the written consent of such
Seller, such Seller agrees to indemnify and hold harmless any Underwriter and
any such controlling person from and against any loss or liability by reason of
such settlement. Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are
DRAFT: June 6, 1997
-17-
at the expense of the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified party for such
fees and expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company or any Selling Stockholder or any
person controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against any Underwriter, the Underwriter shall have the rights and
duties given to the Sellers (except that if any Seller shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person controlling the Company
and the Selling Stockholders and any person controlling such Selling
Stockholders shall have the rights and duties given to the Underwriter, by
Section 8(b) hereof.
DRAFT: June 6, 1997
-18-
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the Sellers
and the Underwriters shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
DRAFT: June 6, 1997
-19-
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
(e) Each Seller hereby designates Xxxxxx Bailly, Inc., 0000
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 (a Delaware corporation)
as its authorized agent, upon which process may be served in any action, suit or
proceeding which may be instituted in any state or federal court in the State of
New York by any Underwriter or person controlling an Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 8,
and each Seller will accept the jurisdiction of such court in such action, and
waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
sent or given to such Seller, at the address for notices specified in Section 13
hereof.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date.
(b) The Registration Statement shall have become effective not
later than 5:00 P.M.(and in the case of a Registration Statement filed
under Rule 462(b) of the Act, not later than 10:00 p.m.), New York City
time, on the date of this Agreement or at such later date and time as
you may approve in writing, and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have
been any material adverse change, or any
DRAFT: June 6, 1997
-20-
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, affairs or
business, whether or not arising in the ordinary course of business, of
the Company, (ii) since the date of the latest balance sheet included
in the Registration Statement and the Prospectus there shall not have
been any change, or any development involving a prospective material
adverse change, in the capital stock or in the long-term debt of the
Company from that set forth in the Registration Statement and
Prospectus, (iii) the Company and its Subsidiaries shall have no
liability or obligation, direct or contingent, which is material to the
Company and its Subsidiaries, taken as a whole, other than those
reflected in or contemplated by the Registration Statement and the
Prospectus and (iv) on the Closing Date you shall have received a
certificate dated the Closing Date, signed by Xxxxx-Xxxxxx X. Xxxxxx
and Xxxxxx X. Xxxxx, in their capacities as the President, Chief
Executive Officer and Chairman of the Board and Vice President, Chief
Financial Officer and Treasurer of the Company, confirming the matters
set forth in paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and as of
the Closing Date and you shall have received a certificate to such
effect, dated the Closing Date, on behalf of each Selling Stockholder.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Pepper, Xxxxxxxx & Xxxxxxx, LLP, counsel for the
Company, to the effect that:
(i) the Company and each of its Subsidiaries has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority
required to carry on its business as it is currently being
conducted and to own, lease and operate its properties;
(ii) the Company and each of its Subsidiaries is
duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing
of property requires such qualification, except where the
failure to be so
DRAFT: June 6, 1997
-21-
qualified would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's
Subsidiaries have been duly and validly authorized and issued
and are fully paid and non-assessable, and are owned by the
Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature;
(iv) all the outstanding shares of Common Stock
(including the Shares to be sold by the Selling Stockholders)
have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any statutory
preemptive rights or, to the knowledge of such counsel not
subject to any contractual preemptive or similar rights which
have not been waived;
(v) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and
delivered to the Underwriters against payment therefor as
provided by this Agreement, will have been validly issued and
will be fully paid and non-assessable, and the issuance of
such Shares is not subject to any preemptive or similar
rights;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable in accordance
with its terms (except as rights to indemnity and contribution
hereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and
by general equitable principles);
(vii) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters in
all material respects to the description thereof contained in
the Prospectus;
(viii) such counsel has been advised by the Division
of Corporate Finance of the Commission that the Registration
Statement has become effective under the Act and, to the
knowledge of such counsel, no stop order suspending its
effectiveness has been issued and no
DRAFT: June 6, 1997
-22-
proceedings for that purpose are pending before or
contemplated by the Commission;
(ix) the statements under the captions "Risk Factors
- Certain Anti-Takeover Effects," "Shares Eligible for Future
Sale," "Description of Capital Stock," "Management - Long-Term
Incentive Plan," "Management - 401K Savings Plan" and
"Underwriting" in the Prospectus and Items 14 and 15 of Part
II of the Registration Statement insofar as such statements
constitute a summary of legal matters documents or proceedings
referred to therein, fairly present in all material respects
the information called for with respect to such legal matters,
documents and proceedings;
(x) neither the Company nor any of its Subsidiaries
is in violation of its respective charter or by-laws and, to
the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its Subsidiaries is in default
in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence
of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the
Company and its Subsidiaries, taken as a whole, to which the
Company or any of its Subsidiaries is a party or by which it
or any of its Subsidiaries or their respective property is
bound except for such violation or default which has been
waived or which would not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(xi) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body which has not
been obtained (except as such may be required under the Act or
other securities or Blue Sky laws) and will not conflict with
or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or
any of its Subsidiaries or any material agreement, indenture
or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties are bound, or to
the knowledge of such counsel violate or conflict with any
laws, administrative regulations or
DRAFT: June 6, 1997
-23-
rulings or court decrees applicable to the Company or any
of its Subsidiaries or their respective properties;
(xii) after due inquiry, such counsel does not know
of any legal or governmental proceeding pending or threatened
to which the Company or any of its Subsidiaries is a party or
to which any of their respective property is subject which is
required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or
other document which is required to be described in the
Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(xiii) to the best of such counsel's knowledge, after
due inquiry, the Company and each of its Subsidiaries has such
permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"), including,
without limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described
in the Prospectus; to the best of such counsel's knowledge,
after due inquiry, the Company and each of its Subsidiaries
has fulfilled and performed all of its material obligations
with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be
set forth in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its
Subsidiaries;
(xiv) assuming the application of the net proceeds to
the sale of the Shares as described in the Prospectus under
the caption "Use of Proceeds", the Company is not an
"investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(xv) to the best of such counsel's knowledge, after
due inquiry, no holder of any security of the Company has any
right to require registration of shares of Common Stock or any
other security of the Company;
DRAFT: June 6, 1997
-24-
(xvi) to the best of such counsel's knowledge, after
due inquiry, all leases to which the Company or any of its
Subsidiaries is a party are valid and binding and no default
has occurred or is continuing thereunder, which is reasonably
likely to result in any material adverse change in the
business, prospects, financial condition or results of
operation of the Company and its Subsidiaries taken as a
whole;
(xvii) (1) the Registration Statement (including any
Registration Statement filed under 462(b) of the Act, if any)
and the Prospectus and any supplement or amendment thereto
(except for financial statements, notes or schedules thereto
and other financial or statistical data and supplemental
schedules included therein or omitted therefrom as to which no
opinion need be expressed) comply as to form in all material
respects with the Act, and (2) such counsel shall advise the
Underwriters that they have participated in the preparation of
the Registration Statement and the Prospectus and in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company, and the Underwriters' representatives and
counsel at which the contents of the Registration Statement,
the Prospectus and related matters were discussed and,
although such counsel has not passed upon or assumed any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus, and although, except as provided in their opinion,
such counsel has not undertaken to verify independently the
accuracy or completeness of the statements in the Registration
Statement and the Prospectus and, therefore, would not
necessarily have become aware of any material misstatement of
fact or omission to state a material fact on the basis of and
subject to the foregoing such counsel does not believe that
either the Registration Statement, as of its effective date,
or the Prospectus, as of its date of issue and as of the date
of such opinion (other than the financial statements, notes or
schedules thereto and other financial or statistical data and
supplemental schedules included therein or omitted therefrom,
as to which such counsel need express no belief), contained or
contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein
or necessary to make the statements
DRAFT: June 6, 1997
-25-
therein, in light of the circumstances under which they
were made, not misleading.
Such counsel shall also advise the Underwriters that no
attorney currently practicing with such counsel's firm has
been engaged to give substantive legal attention to, or
represent the Company in connection with, the violation of any
law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the
subsidiaries or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of
the subsidiaries which, if adversely determined, would have a
material adverse effect on the operations, business,
properties or assets of the Company and the subsidiaries,
taken as a whole, other than as set forth in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date of Zuckerman, Spaeder, Xxxxxxxxx, Xxxxxx & Xxxxxx, L.L.P.
and/or Smart & Thevenet, P.C., counsel for the Selling Stockholders, to
the effect that:
(i) this Agreement has been duly authorized,
executed and delivered by the Selling Stockholder and is a
valid and binding agreement of the Selling Stockholder
enforceable in accordance with its terms (except as rights to
indemnity and contribution hereunder may be limited by
applicable law or public policy and except as the enforcement
thereof may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by
general equitable principles);
(ii) the execution, delivery and performance of this
Agreement by the Selling Stockholder, compliance by the
Selling Stockholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not
require any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other
governmental body (except such as may be required under the
Act or other securities or Blue Sky laws) and will not
conflict with or constitute a breach of any material
agreement, indenture or other instrument to which the Selling
Stockholder is a party or other instrument to which the
Selling Stockholder is a party or
DRAFT: June 6, 1997
-26-
by which the Selling Stockholder or its properties are bound,
or to the knowledge of such counsel violate or conflict with
any laws, administrative regulations or rulings or court
decrees applicable to the Selling Stockholder or its
properties (other than federal or state securities or blue sky
laws, as to which such counsel need not opine);
(iii) the Custody Agreement has been duly authorized,
executed and delivered by each Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally and by general equitable principles;
(iv) each Selling Stockholder has full legal right,
power and authority, and any approval required by law (other
than any approval imposed by the applicable state securities
and Blue Sky laws) to sell, assign, transfer and deliver the
Shares to be sold by him in the manner provided in this
Agreement and the Custody Agreement;
(v) each Selling Stockholder has good and clear
title to the certificates for the Shares to be sold by him and
upon delivery thereof, pursuant hereto and payment therefor,
good and clear title will pass to the Underwriters, severally,
free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever; and
(vi) the power of attorney signed by each Selling
Stockholder appointing Xxxxx-Xxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxx, or either of them, as his attorney-in-fact to the
extent set forth therein with regard to the transactions
contemplated hereby and by the Registration Statement has been
duly authorized, executed and delivered by or on behalf of
each Selling Stockholder and are valid and binding instruments
of such Selling Stockholder enforceable in accordance with its
terms, and pursuant to such power of attorney, each of the
Selling Stockholders has authorized Xxxxx-Xxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx, or either of them, to execute and deliver on
their behalf this Agreement and any other document necessary
or desirable in connection with
DRAFT: June 6, 1997
-27-
transactions contemplated hereby and to deliver the Shares to
be sold by them pursuant to this Agreement.
(g) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the
Underwriters, as to the matters referred to in clauses (v), (vi),
(vii), (viii), (ix) (but only with respect to the statements under the
captions "Description of Capital Stock" and "Underwriting") and
(xviii)(1). In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, counsel for the Company, representatives of the
independent public accountants of the Company and your representatives
at which the contents of the Registration Statement and Prospectus and
related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to materiality to the extent we deemed necessary
upon the opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel which
lead them to believe that the Registration Statement and the prospectus
included therein at the time the Registration Statement became
effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as
amended or supplemented, if applicable (in each case except for
financial statements, notes or schedules thereto and other financial or
statistical data and supplemental schedules included therein or omitted
therefrom, as aforesaid), as of its date contained an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(h) You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from Ernst & Young
LLP, independent public accountants, with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form
and substance of the letter delivered to you by Ernst & Young LLP on
the date of this Agreement.
(i) The Company and the Selling Stockholders shall not
have failed at or prior to the Closing Date to perform or
DRAFT: June 6, 1997
-28-
comply with any of the agreements herein contained and required to be
performed or complied with by the Company at or prior to the Closing
Date.
(j) You shall have received on the Closing Date, a certificate
of each Selling Stockholder who is not a U.S. Person to the effect that
such Selling Stockholder is not a U.S. Person (as defined under
applicable U.S. federal tax legislation), which certificate may be in
the form of a properly completed and executed United States Treasury
Department Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Additional
Shares and other matters related to the issuance of such Additional Shares.
10. Effective Date of Agreement and Termination. This
Agreement shall become effective upon the later of (i) execution of
this Agreement and (ii) when notification of the effectiveness of
the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the
Closing Date by you by written notice to the Sellers if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and Subsidiaries, taken as a whole, or
the earnings, affairs, or business of the Company and its Subsidiaries, taken as
a whole, whether or not arising in the ordinary course of business, which would,
in your judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic conditions or in the financial markets of the United States or
elsewhere that, in your judgment, is material and adverse and would, in your
judgment, make it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the American
Stock Exchange or the NNM or limitation on prices for securities on any such
exchange or the NNM, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute,
DRAFT: June 6, 1997
-29-
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company or any of its Subsidiaries,
(v) the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it or
they have agreed to purchase hereunder on such date and the aggregate number of
Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the
DRAFT: June 6, 1997
-30-
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
11. Agreements of the Selling Stockholders. Each
Selling Stockholder severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes
with respect to the Shares to be sold by such Selling
Stockholder; and
(b) To take all reasonable actions (i) in cooperation with the
Company and the Underwriters to cause the Registration Statement to
become effective at the earliest possible time, (ii) to do and perform
all things to be done and performed under this Agreement prior to the
Closing Date and (iii) to satisfy all conditions precedent to the
delivery of the Shares pursuant to this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company, to Xxxxxx
Xxxxxx, Inc., 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention:
Xxxxx-Xxxxxx X. Xxxxxx, (b) if to the Selling Stockholders, to Xxxxx-Xxxxxx X.
Xxxxxx and Xxxxxx X. Xxxxx c/o the Company and (c) if to any Underwriter or to
the Representatives or to you, to you c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, or in any case to such other address as the person to be
notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Selling Stockholders,
the Company, its officers and directors and of the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter or by or on behalf of the Sellers, the
officers or directors of the Company or any controlling person of the Sellers,
(ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Sellers to
DRAFT: June 6, 1997
-31-
comply with the terms or to fulfill any of the conditions of this Agreement, the
Sellers agree to reimburse the several Underwriters for all out-of-pocket
expenses (including the fees and disbursements of counsel) reasonably incurred
by them.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
DRAFT: June 6, 1997
-32-
Please confirm that the foregoing correctly sets forth the
agreement between the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
XXXXXX BAILLY, INC.
By:______________________
Name:
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II HERETO
By:____________________________
Attorney-in-fact
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXX SECURITIES
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:_________________________
Name:
Title:
DRAFT: June 6, 1997
-33-
SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxxxxx Securities
---------
Total 3,150,000
=========
DRAFT: June 6, 1997
SCHEDULE II
Selling Stockholders
Maximum Number of
Number of Firm Additional Shares
Name Shares Being Sold Subject to Sale
---- ----------------- -----------------
Xxxxx-Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Dar
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxx X. Fri
Xxxxxx X. Xxxxxxx
Xxxxx X. de Terra
Xxxxx X. Xxxxx
Xxxx-Xxxxx Xxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxxx
DRAFT: June 6, 1997
Xxxx X. Xxx Xxxxx
Xxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
------- -------
Total 650,000 472,500
======= =======
DRAFT: June 6, 1997
-2-
