EXHIBIT 1
3,100,000 Shares
TECHNISOURCE, INC.
Common Stock
UNDERWRITING AGREEMENT
June __, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Technisource, Inc., a Florida corporation (the "COMPANY"), proposes to
issue and sell to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS") an aggregate of 3,100,000 shares of the Common Stock, par value
$.01 per share, of the Company (the "FIRM SHARES"), all of which are to be
issued and sold by the Company. Certain shareholders of the Company named in
Schedule II hereto (the "SELLING SHAREHOLDERS") severally propose to sell to the
several Underwriters, not more than an additional 465,000 shares of the Common
Stock, par value $.01 per share, of the Company (the "ADDITIONAL SHARES"), each
Selling Shareholder selling up to the number of shares set forth opposite such
Selling Shareholder's name in Schedule II hereto, if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter referred to collectively as 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 Shareholders are hereinafter sometimes referred to
collectively as the "SELLERS."
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1 (File No.
333-50803), including a prospectus, relating to the Shares. The registration
statement, as amended at the time it became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "REGISTRATION STATEMENT"; and the prospectus in the form included
in the Registration Statement is hereinafter referred to as the "PROSPECTUS." If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"),
then, unless otherwise specified, any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462(b) Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS. 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
3,100,000 Firm Shares and (ii) each Underwriter agrees, severally and not
jointly, to purchase from the Company 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) set forth opposite the name of
such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this Agreement,
and subject to its terms and conditions, (i) each Selling Shareholder agrees,
severally and not jointly, to sell the number of Additional Shares set forth
opposite such Selling Shareholder's name in Schedule II hereto, and (ii) the
Underwriters shall have the right to purchase, severally and not jointly, up to
465,000 Additional Shares from the Selling Shareholders 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 irrevocably, subject to the conditions herein set forth,
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof, which date shall be a business day (i) no earlier than two
business days after such notice has been given (and, in any event, no earlier
than the Closing Date (as hereinafter defined)) and (ii) no later than ten
business days after such notice has been given. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Selling Shareholders the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Selling Shareholders 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.
Each Seller hereby agrees not to (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus (the "LOCK-UP PERIOD")
without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
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("DLJ"). Notwithstanding the foregoing, during the Lock-Up Period (i) the
Company may grant stock options pursuant to the Company's existing stock option
plan; provided that such options are, by their terms, not exercisable during the
Lock-Up Period; (ii) the Company may issue shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof; and (iii) each Selling Shareholder may at any time transfer any
or all of such Selling Shareholder's shares of Common Stock to one or more of
the following: the spouse or any sibling or lineal descendant of such Selling
Shareholder, any corporation or other entity in which 50% or more of the
beneficial ownership of equity interests and 50% or more of the voting
securities is owned by such Selling Shareholder or the spouse or any sibling or
lineal descendant of such Selling Shareholder, or any trust for the benefit of
such Selling Shareholder or the spouse or any sibling or lineal descendant of
such Selling Shareholder (each of the foregoing, a "SELLING SHAREHOLDER
TRANSFEREE"), and a Selling Shareholder Transferee may transfer any or all of
its shares of Common Stock to another Selling Shareholder Transferee, in each
case so long as such Selling Shareholder Transferee shall have agreed in a
signed writing reasonably acceptable to DLJ to be bound by restrictions
substantially similar to those contained in this paragraph for the balance of
the Lock-Up Period. The Company also agrees not to file any registration
statement, other than a registration statement on Form S-8 relating to the
registration of the issuance and sale of securities pursuant to the Technisource
Long-Term Incentive Plan, with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
during the Lock-Up Period without the prior written consent of DLJ. In addition,
each Selling Shareholder agrees that, during the Lock-Up Period without the
prior written consent of DLJ, it will not make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver an agreement executed by (i) each Selling Shareholder, and (ii) each of
the directors and officers of the Company who is not a Selling Shareholder to
the effect that such person will not, during the period commencing on the date
such person signs such agreement and ending at the expiration of the Lock-Up
Period, without the prior written consent of DLJ, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
SECTION 3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as DLJ shall request no later than two business days
prior to the Closing Date or the applicable Option Closing Date (as defined
below), as the case may be. The Shares shall be delivered by or on behalf of the
Company or the Selling Shareholders, as the case may be, with any transfer taxes
thereon duly paid by the respective Seller, to DLJ through the facilities of The
Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters, against
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payment to the Company or the Selling Shareholders, as the case may be, of the
Purchase Price therefore by wire transfer of Federal or other funds immediately
available in New York City. The certificates representing the Shares shall be
made available for inspection not later than 9:30 A.M., New York City time, on
the business day prior to the Closing Date or the applicable Option Closing Date
(as defined below), as the case may be, at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"). The time and date of delivery and payment
for the Firm Shares shall be 9:00 A.M., New York City time, on ________, 1998 or
such other time on the same or such other date as DLJ and the Company shall
agree in writing. The time and date of delivery and payment for the Firm Shares
are hereinafter referred to as the "CLOSING DATE." The time and date of delivery
and payment for any Additional Shares to be purchased by the Underwriters shall
be 9:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 or such other time on the
same or such other date as DLJ and the Company shall agree in writing. The time
and date of delivery and payment for any Additional Shares are hereinafter
referred to as the "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any Option Closing Date on
behalf of the parties hereto pursuant to Section 9 of this Agreement shall be
delivered at the offices of Xxxxxxxx & Xxxxxx, Ltd., 00 Xxxxx Xxxxxx Xx., 00xx
xxxxx, Xxxxxxx, Xxxxxxxx 00000, and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
a) To advise you promptly and, if requested by you, to confirm such
advice in writing, of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, 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, when any amendment to the
Registration Statement becomes effective, if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
when the Rule 462(b) Registration Statement has become effective and of the
happening of any event during the period referred to in Section 5(d) below which
makes any statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements of
material fact therein not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
b) To furnish to you 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.
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c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall have reasonably objected after being so advised; and, during such period,
to prepare and file with the Commission, promptly upon your reasonable request,
any amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements of material fact therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements of material fact in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; PROVIDED, HOWEVER, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
g) To mail and make generally available to its shareholders as soon as
practicable an earnings statement covering the twelve-month period ending
September 30, 1999 that shall
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satisfy the provisions of Section 11(a) of the Act, and to advise you in writing
when such statement has been so made available.
h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed and such other publicly available information
concerning the Company and its subsidiaries as you may reasonably request.
i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: the fees, disbursements and expenses of the Company's
counsel, the Company's accountants and any Selling Shareholder's counsel (in
addition to the Company's counsel) in connection with the registration and
delivery of the Shares under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares, (iv) all
expenses in connection with the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several states and
all costs of printing or producing any Preliminary and Supplemental Blue Sky
Memoranda in connection therewith (including the filing fees and fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto), (v) the filing
fees and disbursements of counsel for the Underwriters in connection with the
review and clearance of the offering of the Shares by the National Association
of Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to the listing of the Shares on
the Nasdaq National Market, (vii) the cost of printing certificates representing
the Shares, (viii) the costs and charges of any transfer agent, registrar and/or
depositary, and (ix) all other costs and expenses incident to the performance of
the obligations of the Company and the Selling Shareholders hereunder for which
provision is not otherwise made in this Section.
j) To use its best efforts to list for quotation the Shares on the
Nasdaq National Market and to maintain the listing of the Shares on the Nasdaq
National Market, the American Stock Exchange or the New York Stock Exchange for
a period of three years after the date of this Agreement.
k) 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
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Option Closing Date, as the case may be, and to satisfy all conditions precedent
to the delivery of the Shares.
l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement is in effect, and to the
knowledge of the Company, no proceedings for such purpose are pending before or
threatened by the Commission.
b) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Act. If the Company is
required to file a Rule 462(b) Registration Statement after the effectiveness of
this Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective (A) will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (B) will comply
in all material respects with the Act and the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
c) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
d) Each of the Company and 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 to carry
on its business as described in the Prospectus and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement.
f) All of the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Shareholders) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
g) All of the outstanding shares of capital stock of 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, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature.
h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, 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 property is bound.
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j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
federal securities laws or the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
of its subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective property or (iv) result in the suspension, termination or revocation
of any Authorization (as defined below) of the Company or any of its
subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
k) There are no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject that are required
to be described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
m) Each of the Company and its subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and to the best of the Company's knowledge,
no event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows, or after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
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result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such failure
to be valid and in full force and effect or to be in compliance, the occurrence
of any such event or the presence of any such restriction would not, singly or
in the aggregate, have a Material Adverse Effect.
n) To the best of the Company's knowledge, the Company is not
responsible for any costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
Material Adverse Effect.
o) This Agreement has been duly authorized, executed and delivered by
the Company.
p) KPMG Peat Marwick LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
q) The combined financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly the combined financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the information required to be stated therein; and the
other financial and statistical information and data relating to the Company or
its industry set forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared.
r) The Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
s) Except as disclosed in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement.
t) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto
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subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there has not been any material adverse change or any development
involving a prospective material adverse change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries has incurred any material liability or
obligation, direct or contingent.
u) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Prospectus.
v) The Company and its subsidiaries own or possess, or can reasonably
expect to be able to acquire on reasonable terms, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names ("INTELLECTUAL
PROPERTY") currently employed by them in connection with the business now
operated by them except where the failure to own or possess or otherwise be able
to acquire such intellectual property would not, singly or in the aggregate,
have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others, by such third parties or their agents, with respect
to any of such intellectual property which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
w) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries (i) has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other material expenditures will have to be made in order to
continue such insurance or (ii) has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers at a cost that would not
have a Material Adverse Effect.
x) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act has indicated to
the Company that it is considering (i) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating assigned to the Company or any
11
securities of the Company or (ii) any change in the outlook for any rating of
the Company or any securities of the Company.
y) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
z) The PRO FORMA financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any supplement or
amendment thereto) are, in all material respects, accurately presented and have
been prepared on a basis consistent with the historical financial statements of
the Company and its subsidiaries.
aa) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of its subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or, to the best of the Company's knowledge, threatened against the
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company and its subsidiaries,
except for such actions specified in clause (i), (ii) or (iii) above, which,
singly or in the aggregate, would not have a Material Adverse Effect. To the
best of the Company's knowledge, no collective bargaining organizing activities
are taking place with respect to the Company or any of its subsidiaries.
bb) The Company and each of 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 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.
cc) All material tax returns required to be filed by the Company and
each of 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 any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
dd) Each certificate signed by any officer of the Company and delivered
to the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder, severally and not jointly, represents and warrants to
each Underwriter that:
12
a) Such Selling Shareholder is the lawful owner of the Additional
Shares to be sold by such Selling Shareholder pursuant to this Agreement and
has, and on the Option Closing Date will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever.
b) The Additional Shares to be sold by such Selling Shareholder on the
Option Closing Date will have been duly authorized and are validly issued, fully
paid and non-assessable.
c) Such Selling Shareholder has, and on the Closing Date and the Option
Closing Date will have, full legal right, power and authority, and all
authorizations and approvals required by law, to enter into this Agreement and
to sell, assign, transfer and deliver the Additional Shares to be sold by such
Selling Shareholder in the manner provided herein.
d) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder.
e) Upon delivery of and payment for the Additional Shares to be sold by
such Selling Shareholder pursuant to this Agreement, good and clear title to
such Additional Shares will pass to the Underwriters, free of all restrictions
on transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
f) The execution, delivery and performance of this Agreement, the
compliance by such Selling Shareholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
federal securities laws or the securities or Blue Sky laws of the various
states), conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the organizational documents of such Selling
Shareholder, if such Selling Shareholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or any
property of such Selling Shareholder is bound or violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over such Selling
Shareholder or any property of such Selling Shareholder.
g) The information in the Registration Statement under the caption
"Principal and Selling Shareholders" that specifically relates to such Selling
Shareholder does not, and will not on the Closing Date or the Option Closing
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
h) At any time during the period described in Section 5(d), if there is
any change in the information referred to in Section 7(g), such Selling
Shareholder will immediately notify you of such change.
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i) Such Selling Shareholder 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 Shareholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares.
j) Certificate(s) in negotiable form for up to the maximum number of
shares of Common Stock that may be sold by such Selling Shareholder to the
Underwriters have been placed in custody with American Stock Transfer and Trust
Company for the purpose of effecting delivery thereof under this Agreement.
k) Such Selling Shareholder is not a "member" of the NASD, a
controlling shareholder of a "member", a "person associated with a member" or an
"affiliate" of a "member" or a member of the "immediate family" of any of the
foregoing or an "underwriter or related person" with respect to the proposed
offering of the Common Stock.
l) Such Selling Shareholder will furnish any and all information which
the Company, the Underwriters or their respective counsel deems reasonably
necessary or desirable in connection with the preparation and filing of all
amendments, post-effective amendments and supplements to the Registration
Statement, any Prospectus or any other filing with any regulatory body or agency
(including the NASD), as well as any and all information which the Commission,
the NASD or any state securities regulatory authority may request.
m) Each certificate signed by such Selling Shareholder and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by such Selling Shareholder to the Underwriters as
to the matters covered thereby.
SECTION 8. INDEMNIFICATION.
a) The Sellers, jointly and severally, agree to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for
14
use therein; PROVIDED, HOWEVER, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or supplemented,
provided by the Company to the several Underwriters in the requisite quantity
and on a timely basis to permit proper delivery on or prior to the Closing Date)
to the person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in 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, if such
material misstatement or omission or alleged material misstatement or omission
was cured in such Prospectus and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person.
Notwithstanding the foregoing, the aggregate liability of any Selling
Shareholder pursuant to this Section 8(a) shall be limited to an amount equal to
(i) the total net proceeds (before deducting expenses) received by such Selling
Shareholder from the Underwriters for the sale of the Shares sold by such
Selling Shareholder hereunder plus (ii) an amount equal to the proceeds received
by such Selling Shareholder from the Company for payment of undistributed S
corporation earnings (the "DISTRIBUTION") less (iii) an amount equal to the
state and federal tax obligations of the respective Selling Stockholder actually
paid as a direct result of the Distribution; PROVIDED further that the amount
set forth in clause (iii) above shall not be deducted from the aggregate
liability of a Selling Stockholder if such losses, claims, damages, liabilities
or judgments are caused by any untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Selling Shareholder
furnished in writing to the Company by each Selling Shareholder through you
expressly for use in the Registration Statement.
b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Shareholder and each person, if any, who controls such Selling Shareholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter
but only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and
15
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Underwriters, their officers and directors and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, (ii) the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement and all persons,
if any, who control the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all Selling Shareholders and all persons, if
any, who control any Selling Shareholder within the meaning of either such
Section, and all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters, their
officers and directors and such control persons of any Underwriters, such firm
shall be designated in writing by DLJ. In the case of any such separate firm for
the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Shareholders and such control persons of any
Selling Shareholders, such firm shall be designated in writing by the Attorneys.
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with the indemnifying
party's written consent or (ii) effected without the indemnifying party's
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
16
d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by each
of 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 8(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of each of the Sellers on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by each of the Sellers on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (after deducting underwriting discounts and
commissions, but before deducting expenses) received by each of 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 each of
the Sellers on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Shareholders on the one hand or the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
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 incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
17
e) The remedies provided for in this Section 8 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
f) Each Selling Shareholder hereby designates Technisource, Inc., 0000
Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, as its
authorized agent, upon which process may be served in any action which may be
instituted in any state or federal court in the State of New York by any
Underwriter, any director or officer of any Underwriter or any person
controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each Selling Shareholder
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 Selling Shareholder, at the address for notices specified in
Section 12 hereof.
SECTION 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) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx, in their
capacities as the President and Chief Executive Officer and the Vice President
of Finance and Chief Financial Officer of the Company, confirming the matters
set forth in Sections 6(t), 9(a) and 9(b) and that the Company has complied with
all of the agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied by the Company on or prior to the
Closing Date.
d) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole; (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries; and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(d)(i),
18
9(d)(ii) or 9(d)(iii), in your reasonable judgment, is material and adverse and,
in your reasonable judgment, makes it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
e) All the representations and warranties of each Selling Shareholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date from each
Selling Shareholder to such effect and to the effect that such Selling
Shareholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Shareholder on or prior to the Closing Date.
f) You shall have received on the Closing Date an opinion (reasonably
satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Holland & Knight LLP counsel for the Company and the Selling Shareholders, to
the effect that:
i) each of the Company and 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 to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
ii) each of the Company and its subsidiaries is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect;
iii) all the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Shareholders)
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar rights;
v) all of the outstanding shares of capital stock of 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,
directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest
of any nature;
19
vi) this Agreement has been duly authorized, executed and
delivered by the Company and by or on behalf of each Selling
Shareholder;
vii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus;
viii) based solely on telephonic, verbal confirmation provided
to such counsel by the staff of the Commission, the Registration
Statement has become effective under the Act, no stop order suspending
its effectiveness has been issued and, to the best of such counsel's
knowledge, no proceedings for that purpose are, and to the best of such
counsel's knowledge after due inquiry, pending before or contemplated
by the Commission;
ix) the statements under the captions "Risk
Factors-Anti-Takeover Provisions, "Risk Factors-Shares Eligible for
Future Sale," "Management-Employee Benefit Plans," "Description of
Capital Stock," and "Shares Eligible for Future Sale," in the
Prospectus and Items 14 and 15 of Part II of the Registration
Statement, in each case insofar as such statements constitute a summary
of the 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, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound;
xi) the execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the federal securities
laws or the securities or Blue Sky laws of the various states), (B)
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
its subsidiaries or, to the knowledge of such counsel, any indenture,
loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound, (C) violate or conflict with any applicable law or any rule,
regulation, or, to the best of such counsel's knowledge, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property or (D) result in the suspension, termination or
20
revocation of any Authorization of the Company or any of its
subsidiaries or any other impairment of the rights of the holder of any
such Authorization;
xii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to which
any of their respective property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
xiii) to the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries has violated any Environmental Law,
any provisions of the Employee Retirement Income Security Act of 1974,
as amended, or any provisions of the Foreign Corrupt Practices Act or
the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a Material
Adverse Effect;
xiv) to the best of such counsel's knowledge, each of the
Company and its subsidiaries has such Authorizations of, and has made
all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate
its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse
Effect; to the best of such counsel's knowledge, each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and, to the best of such counsel's knowledge, no event has
occurred (including, without limitation, the receipt of any notice from
any authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such Authorization; and, to the best of such counsel's
knowledge, such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a Material
Adverse Effect;
xv) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
21
xvi) to the best of such counsel's knowledge after due
inquiry, except as disclosed in the Registration Statement, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with
the Shares registered pursuant to the Registration Statement;
xvii) (A) the Registration Statement and the Prospectus and
any supplement or amendment thereto (except for the financial
statements and schedules and other financial and statistical data
included therein as to which no opinion need be expressed) comply as to
form in all material respects with the Act, (B) such counsel has no
reason to believe that at the time the Registration Statement became
effective or on the date of this Agreement, the Registration Statement
and the prospectus included therein (except for the financial
statements and schedules and other financial and statistical data as to
which such counsel need not express any belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except
for the financial statements and schedules and other financial and
statistical data, as aforesaid) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
xviii) each Selling Shareholder has valid title to the Shares
to be sold by such Selling Shareholder pursuant to this Agreement or
has the right to acquire such Shares upon the exercise of currently
exercisable stock options free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever;
xix) each Selling Shareholder has full legal right, power and
authority, and all authorizations and approvals required by law, to
enter into this Agreement and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder in the manner provided
herein;
xx) upon delivery of and payment for the Shares to be sold by
each Selling Shareholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever;
xxi) to the best of such counsel's knowledge, the execution,
delivery and performance of this Agreement by such Selling Shareholder,
the compliance by such Selling Shareholder with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the federal securities
laws or the securities
22
or Blue Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the organizational documents of such Selling Shareholder, if
such Selling Shareholder is not an individual, or any indenture, loan
agreement, mortgage, lease or other agreement or instrument known to
such counsel to which such Selling Shareholder is a party or by which
any property of such Selling Shareholder is bound, or (C) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over such Selling Shareholder or any property of such
Selling Shareholder; and
xxii) The transfer of all the outstanding shares of capital
stock of Technisource of Florida, Inc. (the "SUBSIDIARY") have been
contributed to the Company in a tax-free reorganization, and the
Subsidiary is the only subsidiary, direct or indirect, of the Company.
The opinion of Holland & Knight LLP described in Section 9(f) above shall be
rendered to you at the request of the Company and the Selling Shareholders and
shall so state therein. In rendering such opinion such counsel may assume that
the laws of the State of New York are the same as the laws of the State of
Florida.
g) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxxxxx & Xxxxxx, Ltd., counsel for the Underwriters, as to
the matters referred to in Sections 9(f)(iv), 9(f)(vi) (but only with respect to
the Company), 9(f)(ix) (but only with respect to the statements under the
caption "Description of Capital Stock" and "Underwriting") and 9(f)(xvii).
In giving such opinions with respect to the matters covered by Section
9(f)(xvii), Holland & Knight LLP and Xxxxxxxx & Xxxxxx, Ltd. may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
h) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
i) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
j) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.
23
k) The Company and the Selling Shareholders shall not have failed on or
prior to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Selling Shareholders, as the case may be, on or prior to the Closing Date.
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.
SECTION 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing Date by
you by written notice to the Sellers if any of the following has occurred: any
outbreak or escalation of hostilities or other national or international
calamity or crisis, in each case involving the United States; any change in
economic conditions or in the financial markets of the United States or
elsewhere that, in your judgment, is material and adverse and, in your judgment,
makes it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus; the suspension or material limitation of trading
in securities or other instruments on the New York Stock Exchange, the American
Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation
on prices for securities or other instruments on any such exchange or the Nasdaq
National Market; the suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your reasonable
opinion has or will have a Material Adverse Effect; the declaration of a banking
moratorium by either federal or New York State authorities or 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 reasonable opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be, any one
or more of the Underwriters shall fail or refuse to purchase the Firm Shares or
Additional Shares, as the case may be, which it has or they have agreed to
purchase hereunder on such date and the aggregate number of Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the total number of Firm Shares or Additional Shares, as the case may be, to
be purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters have agreed to purchase, or in
such other proportion as you may specify, to purchase the Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the number
24
of Firm Shares or Additional Shares, as the case may be, which any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such number of Firm
Shares or Additional Shares, as the case may be, without the written consent of
such Underwriter. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased by all Underwriters and
arrangements satisfactory to you, the Company and the Selling Shareholders for
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders. In any such
case which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. If, on an Option Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase such Additional Shares or (ii) purchase
not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase on such date in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 11. AGREEMENTS OF THE SELLING SHAREHOLDERS. Each Selling
Shareholder agrees with you and the Company:
a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Shareholder to the Underwriters.
b) To do and perform all things to be done and performed by such
Selling Shareholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
such Selling Shareholder pursuant to this Agreement.
SECTION 12. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Technisource, Inc., 0000 Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xx. Xxxxxxxxxx,
Xxxxxxx 00000; (ii) if to the Selling Shareholders, to ________________________
______________________; and (iii) if to any Underwriter or to you, to you c/x
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, 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 Company, the Selling Shareholders and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of any investigation, or statement as
25
to the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Shareholder or any person controlling such Selling
Shareholder, acceptance of the Shares and payment for them hereunder and
termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any Seller as
provided herein (other than as a result of any termination of this Agreement
pursuant to Section 10), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the reasonable fees and disbursements of counsel) incurred by them
in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made solely for the
benefit of and shall be binding upon the Company, the Selling Shareholders, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the 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, each of which shall be an
original or facsimile, which together shall constitute one and the same
instrument.
26
Please confirm that the foregoing correctly sets forth the agreement among the
Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
TECHNISOURCE, INC.
By: ________________________________
Title: ________________________________
THE SELLING SHAREHOLDERS NAMED IN SCHEDULE II HERETO, ACTING SEVERALLY
----------------------------------------
Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxxx
----------------------------------------
Xxxx Xxxxx
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: _______________________________
Title: _______________________________
27
SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation................................................
Xxxxxxx Xxxxx & Company, L.L.C...............................
--------------
Total............................................... 3,100,000
SCHEDULE II
SELLING SHAREHOLDERS
NUMBER OF ADDITIONAL
NAME SHARES BEING SOLD
---- --------------------
Xxxxxx X. Xxxxxxx............................................ 209,423
Xxxxx X. Xxxxxxxxx........................................... 209,423
Xxxx Xxxxx................................................... 46,754
----------
Total............................................... 465,000
