Exhibit 1.1
XXXXXXX COMPUTER RESOURCES, INC.
1,100,000 Shares
of
Common Stock
UNDERWRITING AGREEMENT
___________, 1997
X. X. XXXXXXXX & CO.
XXXXXX XXXXXXX INCORPORATED
As Representatives of the Several Underwriters
c/o X. X. Xxxxxxxx & Co.
X. X. Xxxxxxxx Financial Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxxx Computer Resources, Inc., a Delaware corporation (the "Company"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as the representatives (the
"Representatives") 1,020,000 shares of the common stock, par value $.01 per
share ("Common Stock"), of the Company (the "Company Shares"), and Xxxxx X.
Xxxxxxx, XX (the "Selling Stockholder") proposes to sell to the Underwriters
80,000 shares of Common Stock (the "Selling Stockholder Shares"). The
Company Shares and the Selling Stockholder Shares are hereinafter referred to as
the "Firm Shares". The Firm Shares are to be sold to the Underwriters, acting
severally and not jointly, in such amounts as are set forth on Schedule I
attached hereto. The Company has granted the Underwriters an option to purchase
up to 165,000 additional shares of Common Stock as provided for in Section 3
of this Agreement for the purpose of covering over-allotments in connection with
the distribution and sale of the Firm Shares (the "Option Shares"). The Firm
Shares and the Option Shares are herein called the "Shares."
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter and agrees as follows:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), a registration statement on Form S-3 (Registration No. 333-_____),
including the related preliminary prospectus relating to the Shares, and has
filed one or more amendments related thereto. Copies of such registration
statement and any amendments, including any post-effective amendments, and all
forms of the related prospectuses contained therein and any supplements thereto,
have been delivered to you. Such registration statement, including the
prospectus, Part II, all financial schedules and exhibits thereto, all documents
incorporated by reference therein filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and all information deemed to be a part of
such registration statement pursuant to Rule 430A under the Securities Act, as
amended, at the time when it shall become effective (including any registration
statement for the same offering that becomes effective upon filing pursuant to
Rule 462(b) of the Securities Act), is herein referred to as the "Registration
Statement"; and the prospectus included as part of the Registration Statement on
file with the Commission that discloses all the information that was omitted
from the prospectus on the effective date pursuant to Rule 430A of the Rules and
Regulations (as defined below) and in the form filed pursuant to Rule 424(b)
(including all documents incorporated by reference therein filed under the
Exchange Act and any Term Sheet (as defined herein) if the Company relied on
Rule 434) under the Securities Act is herein referred to as the "Final
Prospectus." The prospectus included as part of the Registration Statement on
the date when the Registration Statement became effective (including all
documents incorporated by reference therein filed under the Exchange Act, and
the information deemed to be a part of thereof pursuant to Rule 430A and Rule
434, if applicable) is referred to herein as the "Effective Prospectus." Any
prospectus included in the Registration Statement and in any amendment thereto
prior to the effective date of the Registration Statement is referred to herein
as a "Preliminary Prospectus." For purposes of this Agreement, "Rules and
Regulations" means the rules and regulations promulgated by the Commission under
either the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as applicable. "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Securities Act. Any reference
in this Agreement to an "amendment or supplement" to any Preliminary Prospectus,
the Final Prospectus or the Effective Prospectus or an "amendment" to any
registration statement (including the Registration Statement) shall be deemed to
include any document incorporated by reference therein and filed with the
Commission under the Exchange Act after the date of such Preliminary Prospectus,
Final Prospectus, Effective Prospectus or Registration Statement, as the case
may be. For purposes of the preceding sentence, any reference to the "effective
date" of an amendment to a registration statement shall, if such amendment is
effected by means of the filing with the Commission under the Exchange Act of a
document incorporated by reference in such registration statement, be deemed to
refer to the date on which such document was so filed with the Commission. As
used herein, any reference to any statement or information as being "made",
"included", "contained", "disclosed", or "set forth" in any Preliminary
Prospectus, Final Prospectus, Effective Prospectus or any amendment or
supplement thereto, or the Registration Statement or any amendment thereto (or
other similar references) shall refer both to information and statements
actually appearing in such document as well as information and statements
incorporated by reference therein.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and each Preliminary Prospectus, at the time
of filing thereof, complied with the requirements of the Securities Act and the
Rules and Regulations, and did not include 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; except that the foregoing does not
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter specifically for
use therein (it being understood that the only information so provided is the
information included in the last paragraph on the cover page, the two paragraphs
relating to stabilization practices on the inside front cover and under the
caption "Underwriting" in the Final Prospectus). When the Registration
Statement becomes effective and at all times subsequent thereto up to and
including the First Closing Date (as hereinafter defined), (i) the Registration
Statement, the Effective Prospectus and Final Prospectus and any amendments or
supplements thereto will contain all statements which are required to be stated
therein in accordance with the Securities Act, the Exchange Act and the Rules
and Regulations and will comply with the requirements of the Securities Act, the
Exchange Act and the Rules and Regulations, and (ii) neither the Registration
Statement, the Effective Prospectus nor the Final Prospectus nor any amendment
or supplement thereto will include 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 light of the circumstances in which they are
made, not misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein (it
being understood that the only information so provided is the information
included in the last paragraph on the cover page, the two paragraphs relating to
stabilization practices on the inside front cover and under the caption
"Underwriting" in the Final Prospectus).
(c) The Company and each subsidiary of the Company (as used herein, the
term "subsidiary" includes any corporation, joint venture or partnership in
which the Company or any subsidiary of the Company has a ten percent ownership
interest) is duly organized and validly existing and in good standing under the
laws of the respective jurisdictions of their organization or incorporation, as
the case may be, with full corporate power and authority to own their properties
and conduct their businesses as now conducted and are duly qualified or
authorized to do business and
are in good standing in all jurisdictions wherein the nature of their business
or the character of property owned or leased may require them to be qualified or
authorized to do business, where the failure to so qualify would have a material
adverse effect on the Company and its subsidiaries, taken as a whole. The
Company and its subsidiaries hold all licenses, consents and approvals, and have
satisfied all eligibility and other similar requirements imposed by federal and
state regulatory bodies, administrative agencies or other governmental bodies,
agencies or officials, in each case as material to the conduct of the respective
businesses in which they are engaged. Each of the Company's subsidiaries is set
forth on Exhibit 21 to the Registration Statement.
(d) The outstanding stock of each of the Company's corporate subsidiaries
is duly authorized, validly issued, fully paid and nonassessable. All of the
outstanding stock of each of the Company's corporate subsidiaries is owned by
the Company, clear of any lien, encumbrance, pledge, equity or claim of any kind
other than the pledge of the shares of each such subsidiary to Star Bank. No
options or warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any shares of capital
stock or of ownership interests in any of the Company's subsidiaries are
outstanding. Other than as disclosed in the Effective Prospectus and the Final
Prospectus, neither the Company nor any of its subsidiaries is a partner or
joint venturer in any partnership or joint venture.
(e) The capitalization of the Company is as set forth under the caption
"Capitalization" in the Effective Prospectus and the Final Prospectus, and
the Company's Common Stock conforms to the description thereof contained
under the caption "Description of Capital Stock" in the final prospectus
dated June 26, 1996, relating to the offering and sale of 1,350,000 shares of
Common Stock. All the issued shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable.
None of the issued shares of capital stock of the Company have been issued in
violation of any preemptive or similar rights. The Shares have been duly and
validly authorized and, upon issuance and delivery and payment therefor in
the manner herein described, will be validly issued, fully paid and
nonassessable. There are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the transfer of, any shares of
Common Stock pursuant to the Company's Certificate of Incorporation, bylaws
or other governing documents or any agreement or other instrument to which
the Company is a party or by which it may be bound except as described in the
Effective Prospectus and the Final Prospectus and except for restrictions on
transfer imposed under applicable securities laws. Neither the filing of the
Registration Statement nor the offer or sale of the Shares as contemplated by
this Agreement gives rise to any rights for or relating to the registration
of any shares of Common Stock or any other securities of the Company. The
Underwriters will receive good and marketable title to the Shares to be
issued and delivered by the Company hereunder, free and clear of all liens,
encumbrances, claims, security interests, restrictions, shareholders'
agreements and voting trusts whatsoever.
(f) All offers and sales of the Company's securities prior to the date
hereof were at all relevant times either registered under the Securities Act or
exempt from the registration requirements of the Securities Act and were duly
registered or the subject of an available exemption from the registration
requirements of the applicable state securities or Blue Sky laws.
(g) The Company has full legal right, power and authority to enter into
this Agreement and to sell and deliver the Shares to the Underwriters as
provided herein, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency and other laws affecting
creditors' rights generally or general principles of equity. No consent,
approval, authorization or order of any court or governmental agency or body or
third party is required for the performance of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
such as have been obtained and such as may be required by the National
Association of Securities Dealers, Inc. ("NASD") or under the Securities Act, or
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. The issue and sale of the
Shares by the Company, the Company's performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in a breach
or violation of, or conflict with, any of the terms and provisions of, or
constitute a default by the Company or any of its subsidiaries under, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or to
which the Company or any of its subsidiaries or any of their respective
properties is subject, the Certificate of Incorporation or bylaws of the Company
or any of its subsidiaries or any statute or any judgment, decree, order, rule
or regulation of any court or governmental agency or body applicable to the
Company, or any subsidiary or any of their respective properties. Neither the
Company nor any subsidiary is in violation of its Articles or Certificate of
Incorporation or bylaws or any law, administrative rule or regulation or
arbitrators' or administrative or court decree, judgment or order or in
violation or default (there being no existing state of facts which with notice
or lapse of time or both would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, deed of trust, mortgage, loan agreement, note,
lease, agreement or other instrument or permit to which it is a party or by
which it or any of its properties is or may be bound, which such violation or
default could have a material and adverse effect on the Company and its
subsidiaries, taken as a whole.
(h) The financial statements and the related notes and schedules of (A)
the Company and its consolidated subsidiaries and (B) The Computer Supply
Store, Inc. (the "Acquired Company") included or incorporated by reference in
the Registration Statement, the Effective Prospectus and the Final Prospectus
present fairly the financial position, results of operations and changes in
financial position and cash flow of the Company and its consolidated
subsidiaries and the Acquired Company, at the dates and for the periods to
which they relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated. The unaudited pro forma financial information of the Company
included in the Registration Statement, the Effective Prospectus and the Final
Prospectus have been prepared in accordance with the Commission's rules and
regulations and guidelines with respect to pro forma financial statements and
the assumptions used in the preparation thereof are, in the Company's opinion,
reasonable and made in good faith. The financial and statistical data set
forth in the Effective Prospectus and the Final Prospectus under the captions
"Prospectus Summary," "Use of Proceeds," "Capitalization," "Selected
Consolidated Financial and Operating Data," "Selected Pro Forma Consolidated
Financial and Operating Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business," "Principal and
Selling Stockholders" and "Certain Transactions" present fairly the
information set forth therein on the basis stated in the Effective Prospectus
and the Final Prospectus. Xxxxx Xxxxxxxx LLP has certified the financial
statements of the Company for the year ended January 5, 1996 and January 5,
1995 and the nine month period ended October 5, 1996. Deloitte & Touche LLP
has certified the financial statements of the Company for the year ended
January 5, 1994. Deloitte & Touche LLP has certified the financial
statements of the Acquired Company for the year ended December 31, 1995 and
Northrup, Haines, Xxxxxx, Schmid, Macklin, P.C. has certified the financial
statements of the Acquired Company for the year ended December 31, 1994. Each
of Xxxxx Xxxxxxxx LLP, Deloitte & Touche LLP and Northrup, Haines, Xxxxxx,
Schmid, Macklin, P.C. is a firm of independent public accountants as required
by the Securities Act and the Rules and Regulations.
(i) Subsequent to January 5, 1996, neither the Company nor any subsidiary
has sustained any material loss or interference with its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, which is not disclosed in the Effective Prospectus and the Final
Prospectus; and subsequent to the respective dates as of which information is
given in the Registration Statement, the Effective Prospectus and the Final
Prospectus, (i) neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business and (ii) there has
not been any (a) change in the capital stock, partnership interests, joint
venture interests, or obligations under capital leases of the Company and its
subsidiaries or (b) material change in the long-term debt or short- term
borrowings of the Company and its subsidiaries or any issuance of options,
warrants or rights to purchase the capital stock of the Company, or any material
adverse change, or any development involving a prospective material adverse
change, in the general affairs, management, business, prospects, financial
position, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Effective Prospectus and the Final Prospectus.
(j) Except as described in the Effective Prospectus and the Final
Prospectus or as previously disclosed in writing to you, there is not pending,
or to the knowledge of the Company threatened, any action, suit, proceeding,
inquiry or investigation, to which the Company, any of its subsidiaries or to
their knowledge any of their officers or directors is a party, or to which the
property of the Company or any subsidiary is subject, before or brought by any
court or governmental agency or body, wherein an unfavorable decision, ruling or
finding could prevent or materially hinder
the consummation of this Agreement or result in a material adverse change in the
business condition (financial or other), prospects, financial position, net
worth or results of operations of the Company and its subsidiaries, taken as a
whole.
(k) There are no contracts or other documents required by the Securities
Act or by the Rules and Regulations to be described in the Registration
Statement, the Effective Prospectus or the Final Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required.
(l) Except as described in the Effective Prospectus and the Final
Prospectus, the Company and each of its subsidiaries have good and marketable
title to all real and material personal property owned by them, free and clear
of all material liens, charges, encumbrances or defects, except those reflected
in the financial statements hereinabove described. The real and personal
property and buildings referred to in the Effective Prospectus and the Final
Prospectus which are leased from others by the Company are held under valid,
subsisting and enforceable leases. The Company or its subsidiaries owns or
leases all such properties as are necessary to its operations as now conducted.
(m) The Company's system of internal accounting controls is sufficient to
meet the objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in amounts
that would be material in relation to the Company's financial statements.
Neither the Company, any of its subsidiaries, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any such subsidiary has, directly or indirectly used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(n) The Company and its subsidiaries have filed all foreign, federal,
state and material local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes shown as due therefrom; and
there is no tax deficiency, assessment, fine or penalty that has been, nor does
the Company or any subsidiary have knowledge of any tax deficiency, assessment,
fine or penalty which is likely to be, asserted against the Company or its
subsidiaries, which if determined adversely could materially and adversely
affect the earnings, assets, affairs, business prospects or condition (financial
or other) of the Company and its subsidiaries, taken as a whole.
(o) The Company and its subsidiaries operate their business in each
jurisdiction in which the Company or any of its subsidiaries is doing business
in conformity with all applicable statutes, ordinances, decrees, orders, rules
and regulations of all applicable governmental bodies, including federal, state
and local governing bodies in the United States and all foreign governments in
areas outside of the United States, except where such failure would have no
material adverse effect on the business, operations, property or business
prospects of the Company and its subsidiaries, taken as a whole. The Company
and its subsidiaries have all licenses, approvals or consents to operate their
respective business in all locations in which such businesses are currently
being operated other than such licenses, approvals or consents the failure to so
have obtained would not have a material adverse effect on the Company or its
subsidiaries, and the Company and its subsidiaries have no knowledge of any
existing or imminent matter other than as specifically disclosed in the
Effective Prospectus and the Final Prospectus which may have a material adverse
effect on the business, operations, property or business prospects of the
Company and its subsidiaries, considered as a whole.
(p) Neither the Company nor any of its subsidiaries have failed to file
with the applicable regulatory authorities any statement, report, information or
form required by any applicable law, regulation or order and all such filings or
submissions were in compliance with applicable laws when filed and no
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to such filings or submissions, except where such failure
would have no material adverse effect on the business, operations, property or
business prospects of the Company and its subsidiaries, considered as a whole.
Neither the Company nor any of its subsidiaries have failed to maintain in full
force and effect any license or permit necessary or proper for the conduct of
its business, or received any notification that any revocation or limitation
thereof is threatened or pending, and there is not pending any change under any
law,
regulation, license or permit which could materially adversely affect the
business, operations, property or business prospects of the Company and its
subsidiaries, taken as a whole. Neither the Company nor any of its subsidiaries
have received any notice of violation of or been threatened with a charge of
violating and, to the Company's knowledge, and except as previously disclosed in
writing to you, are not under investigation with respect to a possible violation
of any provision of any law, regulation or order.
(q) No labor dispute exists with the Company's employees or with employees
of its subsidiaries or is threatened which could materially adversely affect the
Company and its subsidiaries, taken as a whole. The Company is not aware of any
existing or threatened labor disturbance by its employees or by any employees of
its subsidiaries which could be expected to materially adversely effect the
condition (financial or otherwise), results of operations, properties, affairs,
management, business affairs or business prospects of the Company and its
subsidiaries, taken as a whole.
(r) Except as disclosed in the Effective Prospectus and the Final
Prospectus, the Company and its subsidiaries own or possess, or can acquire on
reasonable terms, the licenses, copyrights, trademarks, service marks, trade
names, patents and proprietary and other confidential information presently
employed by them in connection with the businesses now operated by them, and,
neither the Company nor any of its subsidiaries have received any notice of
infringement of or conflict with asserted rights of others with respect to any
of the foregoing which, alone or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, taken as a
whole.
(s) 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 such subsidiary 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
as may be necessary to continue its business at a comparable cost.
(t) Other than as set forth in the Company's bank loan agreement, no
subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distributions on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company.
(u) The Company is not, will not become as a result of the transactions
contemplated hereby, and does not intend to conduct its business in a manner
that would cause it to become, an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(v) Neither the Company nor any of its subsidiaries, nor any of the
directors, officers, employees or agents of the Company and its subsidiaries
have taken and will not take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might be expected to
constitute, stabilization or manipulation of the price of the Common Stock.
(w) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act, and is qualified as a Nasdaq National Market security of The
Nasdaq Stock Market, Inc. The Company has taken no action designed to
terminate, or likely to have the effect of terminating, the registration of the
Common Stock under the Exchange Act or qualification of the Common Stock on the
Nasdaq National Market, nor has the Company received any notification that the
Commission or the NASD is contemplating terminating such registration or
qualification.
(x) Neither the Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to occupational safety and health
and the Company and its subsidiaries have received all permits, licenses or
other approvals required of them under applicable federal and state laws and
regulations to conduct their respective
businesses, and the Company and each such subsidiary is in compliance with all
terms and conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the aggregate,
result in a material and adverse effect on the earnings, assets, affairs,
business prospects or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.
(y) Each certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(z) Except where such failure to comply or violation would not, singly or
in the aggregate have a material adverse effect on the earnings, assets,
affairs, business prospects or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole, (i) the Company has complied with the
Immigration Reform and Control Act of 1986 and all regulations promulgated
thereunder ("IRCA") with respect to the completion and maintenance of Forms I-9,
Employment Eligibility Verification Forms, for all of its current employees and
reverification of the employment status of any and all employees whose
employment authorization documents indicated a limited period of employment
authorization; (ii) with respect to all former employees who left the Company's
employment within three years prior to the date hereof, the Company has complied
with IRCA with respect to the maintenance of Forms I-9 for at least three years
or for one year beyond the date of termination, whichever is later; (iii) the
Company has not violated any applicable laws relating to immigration and has
employed only individuals authorized to work in the United States and has never
been the subject of any inspection or investigation relating to its compliance
with or violation of IRCA; and (iv) the Company has not been warned, fined or
otherwise penalized by reason or any failure to comply with IRCA, and no such
proceeding is pending or threatened.
(aa) Each of the reports and registration statements filed by the Company
with the Commission under the Securities Act or the Exchange Act, when they
became effective or were filed with the Commission, as the case may be,
including, without limitation, the documents incorporated by reference in the
Final Prospectus, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act and the Rules and Regulations, and none of
such documents 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.
(bb) The Company has not distributed and, prior to the later of (i) the
First Closing Date and (ii) the completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Final Prospectus or any amendment or
supplement thereto, or other materials, if any, permitted by the Securities Act.
(cc) At the time the Registration Statement became effective (A) it 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 not
misleading and (B) the Effective Prospectus and Final Prospectus did not and
will 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 light of the
circumstances under which they were made, not misleading.
(dd) The conditions for use of a Registration Statement on Form S-3 set
forth in the General Instructions to Form S-3 have been satisfied with respect
to the Company and the transactions contemplated by this Agreement and the
Registration Statement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The
Selling Stockholder represents and warrants to each Underwriter and agrees as
follows:
(a) The Selling Stockholder has good and marketable title to the Selling
Stockholder Shares to be sold by the Selling Stockholder, free and clear of any
liens, encumbrances, equities and claims (other than as imposed by
the Securities Act or this Agreement), and full right, power and authority to
effect the sale and delivery of the Selling Stockholder Shares; and upon the
delivery of and payment for the Selling Stockholder Shares pursuant to this
Agreement, good and marketable title to the Selling Stockholder Shares, free and
clear of any liens, encumbrances, equities, claims, security interests,
restrictions, shareholder agreements or voting trusts, will be transferred to
the Underwriters.
(b) The Selling Stockholder has duly executed and delivered the Custody
Agreement in the form previously delivered to the Representatives, appointing
Cors & Xxxxxxx as the duly authorized custodian (the "Custodian") of the Selling
Stockholder Shares. Shares of Common Stock, in suitable form for transfer,
representing the Selling Stockholder Shares to be sold by the Selling
Stockholder hereunder have been deposited with the Custodian pursuant to the
Custody Agreement for the purpose of delivery pursuant to this Agreement. The
Selling Stockholder agrees that the Selling Stockholder Shares on deposit with
the Custodian are subject to the interest of the Underwriters hereunder, that
the arrangements made for such custody are to that extent irrevocable, and that
the obligations of the Selling Stockholder hereunder shall not be terminated
except as provided in this Agreement and the Custody Agreement. If the Selling
Stockholder should die or become incapacitated, or if any other event should
occur, before the delivery of the Shares of the Selling Stockholder hereunder,
the Selling Stockholder Shares deposited with the Custodian shall be delivered
by the Custodian in accordance with the terms and conditions of this Agreement
as if such death, incapacity, or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(c) The Selling Stockholder has duly executed and delivered this
Agreement. This Agreement constitutes a legal, valid and binding obligation of
the Selling Stockholder, enforceable against the Selling Stockholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency and other laws affecting creditors' rights generally or
general principles of equity. All authorizations and consents necessary for the
execution and delivery of this Agreement and the Custody Agreement on behalf of
the Selling Stockholder and for the sale and delivery of the Selling Stockholder
Shares to be sold by the Selling Stockholder hereunder has been given. The
Selling Stockholder has the legal capacity and full right, power and authority
to execute this Agreement and the Custody Agreement.
(d) The performance of this Agreement and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby by the Selling
Stockholder will not result in a breach or violation of, or conflict with, any
of the terms or provisions of, or constitute a default by the Selling
Stockholder under, any indenture, mortgage, deed of trust, trust (constructive
or other), loan agreement, lease, franchise, license or other agreement or
instrument to which the Selling Stockholder or any of the Selling Stockholder's
properties is bound, any statute, or any judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to the Selling
Stockholder or any of the Selling Stockholder's properties.
(e) The 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 the Common
Stock. The Selling Stockholder has not distributed nor will distribute any
prospectus or other offering material in connection with the offer and sale of
the Shares other than any Preliminary Prospectus or the Final Prospectus or
other material permitted by the Securities Act.
(f) For a period of 180 days from the effective date of the Registration
Statement, the Selling Stockholder agrees that the Selling Stockholder will not,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of any shares of Common Stock, or any warrant or other
security convertible or exchangeable into or giving the holder thereof the right
to acquire Common Stock, without the prior written consent of the
Representatives.
(g) The representations and warranties of the Company in Section 1 of this
Agreement are true and correct. The Selling Stockholder has reviewed and is
familiar with the Registration Statement as originally filed with the
Commission, and as amended, and the Preliminary Prospectus. There are no facts,
conditions or information not
disclosed in such Preliminary Prospectus that have materially adversely affected
or could materially adversely affect the business, financial position, net worth
or results of operations, or could materially adversely affect the properties or
assets of the Company and its subsidiaries, taken as a whole. 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. The
Selling Stockholder represents that it was not prompted to sell the Selling
Stockholder Shares by any information concerning the Company or any subsidiary
that is not set forth in the Preliminary Prospectus, the Effective Prospectus,
or the Final Prospectus.
(h) At the time the Registration Statement became effective (A) such parts
of the Registration Statement and any amendments and supplements thereto as
specifically refer to the Selling Stockholder 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 not misleading and
(B) such parts of the Effective Prospectus and Final Prospectus as specifically
refer to the Selling Stockholder did not and will 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 light of the circumstances under which they
were made, not misleading.
(i) Any certificate signed by or on behalf of the Selling Stockholder as
such and delivered to the Representatives or to counsel for the Representatives
shall be deemed a representation and warranty by the Selling Stockholder to each
Underwriter as to the matters covered thereby.
(j) In order to document each Underwriter's compliance with its reporting
and withholding obligations or responsibilities with respect to the transactions
herein contemplated, the Selling Stockholder agrees to deliver to you prior to
or at the First Closing Date (as defined below) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company and the Selling Stockholder agree severally and not jointly
to sell to each of the Underwriters, and each of the Underwriters, severally and
not jointly, agrees to purchase at a purchase price of $_________ per share, the
number of Firm Shares set forth opposite such Underwriter's name in Schedule I
hereto.
(b) The Company also grants to the Underwriters an option to purchase,
solely for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares, all or any portion of the Option
Shares at the purchase price per share set forth above. The option granted
hereby may be exercised as to all or any part of the Option Shares at any time
within 30 days after the date the Registration Statement becomes effective (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading).
The Underwriters shall not be under any obligation to purchase any Option Shares
prior to the exercise of such option. The option granted hereby may be
exercised by the Underwriters by the Representatives giving written notice or by
telephone (confirmed in writing) to the Company setting forth the number of
Option Shares to be purchased and the date and time for delivery of and payment
for such Option Shares and stating that the Option Shares referred to in such
notice are to be used for the purpose of covering over-allotments in connection
with the distribution and sale of the Firm Shares. If such notice is given
prior to the First Closing Date (as defined herein), the date set forth therein
for such delivery and payment shall not be earlier than two full business days
thereafter or the First Closing Date, whichever occurs later. If such notice is
given on or after the First Closing Date, the date set forth therein for such
delivery and payment shall not be earlier than three full business days
thereafter. In either event, the date so set forth shall not be more than 10
full business days after the date of such notice. The date and time set forth
in such notice is herein called the "Second Closing Date." Upon exercise of the
option, the Company shall become obligated to sell to the Underwriters, and,
subject to the terms and conditions herein set forth, the Underwriters shall
become obligated to
purchase, for the account of each Underwriter, from the Company the number of
Option Shares specified in such notice. Option Shares shall be purchased for
the accounts of the Underwriters in proportion to the number of Firm Shares set
forth opposite such Underwriter's name in Schedule I hereto, except that the
respective purchase obligations of each Underwriter shall be adjusted so that no
Underwriter shall be obligated to purchase fractional Option Shares.
(c) Certificates in definitive form for the Firm Shares which each
Underwriter has agreed to purchase hereunder shall be delivered by or on behalf
of the Company and the Selling Stockholder to the Underwriters for the account
of such Underwriter against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check payable in New York
Clearing House (next day) funds, to the order of the Company or the Selling
Stockholder, as the case may be, at the offices of X. X. Xxxxxxxx & Co.
("Bradford"), 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other
place as may be agreed upon by Bradford, the Company and the Selling
Stockholder, at 10:00 A.M., Nashville, Tennessee time, on the third (or if the
Firm Shares are priced, as contemplated by rule 15c6-1(c), promulgated pursuant
to the Exchange Act, after 4:30 P.M., Washington, D.C. time, the fourth) full
business day after this Agreement becomes effective, or at such other time
thereafter as the Representatives, the Company and the Selling Stockholder may
mutually determine, such time of delivery against payment being herein referred
to as the "First Closing Date." The First Closing Date and the Second Closing
Date are herein individually referred to as the "Closing Date" and collectively
referred to as the "Closing Dates." Certificates in definitive form for the
Option Shares which each Underwriter shall have agreed to purchase hereunder
shall be similarly delivered by or on behalf of the Company on the Second
Closing Date. The certificates in definitive form for the Shares to be
delivered will be in good delivery form and in such denominations and registered
in such names as Xxxxxxxx xxx request not less than 48 hours prior to the First
Closing Date or the Second Closing Date, as the case may be. Such certificates
will be made available for checking and packaging at a location as may be
designated by you, at least 24 hours prior to the First Closing Date or the
Second Closing Date, as the case may be. It is understood that you may (but
shall not be obligated to) make payment on behalf of any Underwriter or
Underwriters for the Shares to be purchased by such Underwriter or Underwriters.
No such payment shall relieve such Underwriter or Underwriters from any of its
or their obligations hereunder.
4. OFFERING BY THE UNDERWRITERS. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company shall comply with the provisions of and make all requisite
filings with the Commission pursuant to Rules 424, 430A and 434, if relied upon
by the Company, of the Rules and Regulations and to notify you promptly (in
writing, if requested) of all such filings. The Company shall notify you
promptly of any request by the Commission for any amendment of or supplement to
the Registration Statement, the Effective Prospectus or the Final Prospectus or
for additional information; the Company shall prepare and file with the
Commission, promptly upon your request, any amendments of or supplements to the
Registration Statement, the Effective Prospectus or the Final Prospectus which,
in your reasonable opinion, may be necessary or advisable in connection with the
distribution of the Shares; and the Company shall not file any amendment of or
supplement (including any Term Sheet) to the Registration Statement, the
Effective Prospectus or the Final Prospectus to which you reasonably object
after reasonable notice thereof. The Company shall advise you promptly after it
receives notice by the Commission or any jurisdiction or other regulatory body
of any stop order or other order suspending the effectiveness of the
Registration Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or suspending the
qualification of the Shares for offering or sale in any jurisdiction, or of the
institution of any proceedings for any such purpose; and the Company shall use
its reasonable best efforts to prevent the issuance of any stop order or other
such order and, should a stop order or other such order be issued, to obtain as
soon as possible the lifting thereof.
(b) The Company will take or cause to be taken all necessary action and
furnish to whomever you direct such information as may be reasonably required in
qualifying the Shares for offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Underwriters may designate and will continue such
qualifications in effect for as long as may be reasonably necessary to complete
the distribution and for a period of not less than one year after the Effective
Date; provided, that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction in which the Company is not currently so subject.
(c) Within the time during which a Final Prospectus relating to the Shares
is required to be delivered under the Securities Act, the Company shall comply
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the continuance of sales of or dealings
in the Shares as contemplated by the provisions hereof and the Final Prospectus.
If during such period any event occurs as a result of which the Final Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading, or if during
such period it is necessary to amend the Registration Statement or supplement
the Final Prospectus or to file under the Exchange Act any document incorporated
by reference in the Final Prospectus in order to comply with the Securities Act
or the Exchange Act, the Company shall promptly notify you and shall amend the
Registration Statement or supplement the Final Prospectus or any such
incorporated document (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will furnish without charge to the Representatives copies
of the Registration Statement (two of which shall be signed and shall be
accompanied by all exhibits thereto) and will furnish, without charge to the
Representatives, each Underwriter and to any dealer in securities, each
Preliminary Prospectus, the Effective Prospectus and the Final Prospectus, and
all amendments and supplements thereto, including (i) all documents or
information incorporated by reference therein and (ii) any prospectus or
supplement prepared after the effective date of the Registration Statement, in
each case as soon as available and in such quantities as the Underwriters may
reasonably request.
(e) The Company will (i) deliver to you at such office or offices as you
may designate as many copies of the Preliminary Prospectus and Final Prospectus
as you may reasonably request, and (ii) for a period of not more than one month
after the Registration Statement becomes effective or such longer period that a
Final Prospectus relating to the Shares is required to be delivered under the
Securities Act, send to the Underwriters as many additional copies of the Final
Prospectus and any supplement thereto as you may reasonably request.
(f) The Company shall make generally available to its security holders, in
the manner contemplated by Rule 158(b) under the Securities Act as promptly as
practicable and in any event no later than 45 days after the end of its fiscal
quarter in which the first anniversary of the effective date of the Registration
Statement occurs, an earnings statement satisfying the provisions of Section 11
(a) of the Securities Act covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement.
(g) The Company will apply the net proceeds from the sale of the Shares as
set forth under the caption "Use of Proceeds" in the Final Prospectus.
(h) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the Representatives, without
charge, copies of all reports and other communications (financial or other)
furnished by the Company to its shareholders and, as soon as available, copies
of any reports or financial statements furnished or filed by the Company to or
with the Commission or any national securities exchange or over-the-counter
market on which any class of securities of the Company may be listed or traded
and such additional information concerning the business and financial condition
of the Company and its subsidiaries as you from time to time may reasonably
request.
(i) The Company will, from time to time, after the effective date of the
Registration Statement file with the Commission such reports as are required by
the Securities Act, the Exchange Act and the Rules and Regulations, and shall
also file with state securities commissions in states where the Shares have been
sold by you (as you shall have advised us in writing) such reports as are
required to be filed by the securities acts and the regulations of those states.
(j) Except pursuant to this Agreement or with your written consent, the
Company will not, and the Company has provided agreements executed by each of
the Company's executive officers and directors providing that none of them will,
for a period of 180 days from the effective date of the Registration Statement,
offer for sale, sell, grant any options, rights or warrants with respect to any
shares of Common Stock, securities convertible into Common Stock or any other
capital stock of the Company, or otherwise dispose of, directly or indirectly,
any shares of Common Stock or such other securities or capital stock, except for
(i) the grant of options pursuant to the Company's stock option plans or other
stock bonus plans in the ordinary course consistent with past practice; or (ii)
the issuance of shares of Common Stock or other securities convertible into
Common Stock or any other capital stock of the Company solely to the owners of
capital stock of any company acquired by the Company.
(k) If at any time during the 30-day period after the date the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which, in your
reasonable opinion, the market price for the Shares has been or is likely to be
materially adversely affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Final Prospectus), after
written notice from you advising the Company to the effect set forth above, the
Company agrees forthwith to prepare, consult with you concerning the substance
of, and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication or
event; provided, however, that the Company shall have no obligation under this
Section 5(k) to disseminate a public statement or press release or make any
other communication if, in the Company's judgment, such communication may have
an adverse effect on any pending acquisition negotiation in which the Company
may then be engaged.
(l) Neither the Company nor any of its officers, directors or affiliates
will take, directly or indirectly, any action designed to cause or result in, or
which might constitute or be expected to constitute, stabilization or
manipulation of the price of the Common Stock.
(m) The Company will cause the Shares to be listed on the Nasdaq Stock
Market at each Closing Date and will use its reasonable best efforts to cause
the Shares to be so listed for at least one year from the date hereof.
6. EXPENSES. The Company and the Selling Stockholder agree with the
Underwriters that (a) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company will pay all fees and expenses incident to the performance of the
obligations of the Company and the Selling Stockholder, including, but not
limited to, (i) the Commission's registration fee, (ii) the expenses of printing
(or reproducing) and distributing the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, the Effective Prospectus, the Final Prospectus, any
amendments or supplements thereto, and this Agreement and other underwriting
documents, including Underwriter's Questionnaires, Underwriter's Powers of
Attorney, Blue Sky Memoranda, Agreements Among Underwriters and Selected Dealer
Agreements, (iii) fees and expenses of accountants and counsel for the Company
and the Selling Stockholder, (iv) reasonable expenses of registration or
qualification of the Shares under state Blue Sky and securities laws, including
the fees and disbursements of counsel to the Underwriters in connection
therewith, provided, such counsel fees shall not exceed $7,500, (v) filing fees
paid or incurred by the Underwriters and related fees and expenses of counsel to
the Underwriters in connection with filings with the NASD, provided, such
counsel fees shall not exceed $5,000, (vi) expenses of listing the Shares on the
Nasdaq National Market, (vii) any expenses for travel, lodging and meals
incurred by the Company in connection with marketing, dealer and other meetings
attended by the Company and the Underwriters in marketing the Shares, (viii) the
costs and charges of the Company's transfer agent and registrar and the cost of
preparing the certificates for the Shares and (ix) all other costs and expenses
incident to the performance of its obligations hereunder not otherwise provided
for in this Section; and (b) all reasonable out-of-pocket expenses,
including counsel fees, disbursements and expenses, incurred by the Underwriters
in connection with investigating, preparing to market and marketing the Shares
and proposing to purchase and purchasing the Shares under this Agreement, will
be borne and paid by the Company only if the sale of the Shares provided for
herein is not consummated by reason of the termination of this Agreement by the
Representatives pursuant to Sections 10 or 13(iv) or pursuant to Section 13(ii)
because of any failure or refusal on the part of the Company or the Selling
Stockholder to comply in all material respects with any term or fulfill in all
material respects any of the conditions of this Agreement. The Company and the
Selling Stockholder have agreed between themselves with regard to the sharing of
fees and expenses. It is understood, however, that, except as provided in this
Section 6 and Sections 8, 9 and 10, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel and any advertising
expenses in connection with any offers they may make.
7. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder shall be subject, in their discretion,
to the accuracy of the representations and warranties of the Company and the
Selling Stockholder herein as of the date hereof and as of the Closing Date as
if made on and as of the Closing Date, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company and the Selling Stockholder of all of their covenants and agreements
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective not later than 4:00 P.M., Washington, D.C. time, on
the day following the date of this Agreement, or such later time and date as
shall have been consented to by the Representatives and all filings required by
Rule 424, Rule 430A and Rule 434, if applicable, of the Rules and Regulations
shall have been made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Company or the Underwriters, shall be contemplated by the Commission; any
request of the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have been
complied with to your reasonable satisfaction; and the NASD, upon review of the
terms of the public offering of the Shares, shall not have objected to such
offering or the terms or the Underwriters' participation in the same.
(b) No Underwriter shall have advised the Company that the Registration
Statement, Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or any supplement thereto, contains an untrue statement of fact
which, in your good faith judgment, is material, or omits to state a fact which,
in your good faith judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading.
(c) The Representatives shall have received (i) an opinion, dated the
First Closing Date, from Cors & Xxxxxxx, counsel for the Company and the Selling
Stockholder, substantially in the form and substance attached hereto as EXHIBIT
A, and reasonably acceptable to the Underwriters and (ii) an opinion dated the
First Closing Date, from Xxxxxxxxx & Dreidame, counsel to the Company and the
Selling Stockholder, substantially in the form and substance attached hereto as
EXHIBIT B and reasonably acceptable to the Underwriters.
(d) The Underwriters shall have received an opinion or opinions, dated the
Closing Date, of Xxxxxx & Bird, counsel for the Underwriters, with respect to
the Registration Statement and the Final Prospectus, and such other related
matters as the Underwriters may reasonably require.
(e) The Representatives shall have received from each of Xxxxx Xxxxxxxx
LLP and Deloitte & Touche LLP, a letter dated the date hereof and, at the
Closing Date, a second letter from Xxxxx Xxxxxxxx LLP dated the Closing Date in
form and in substance reasonably satisfactory to the Representatives, stating
that they are independent public accountants with respect to the Company and its
subsidiaries, within the meaning of the Securities Act and the applicable Rules
and Regulations, and to the effect that:
(i) In their opinion, the consolidated financial statements and
schedules audited by them and included in the Final Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the published
Rules and Regulations and are presented in accordance with generally accepted
accounting principles consistently applied;
(ii) The unaudited summary and selected financial information
included in the Preliminary Prospectus and the Final Prospectus under the
captions "Prospectus Summary," "Summary Financial and Operating Data,"
"Selected Consolidated Financial and Operating Data," and "Selected Pro Forma
Consolidated Financial Data" agrees with the corresponding amounts in the
audited financial statements included in the Final Prospectus or previously
reported on by them;
(iii) On the basis of a reading of the latest available interim
consolidated financial statements (unaudited) of the Company and its
subsidiaries, a reading of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Final Prospectus, inquiries of officials of the Company
responsible for financial and accounting matters and other specified
procedures, all of which have been agreed to by the Representatives, nothing
came to their attention that caused them to believe that:
(A) the unaudited amounts for sales, net revenues
and total and per share amounts of net income [insert other items as
appropriate] included in the Registration Statement and Final
Prospectus do not agree with the amounts set forth in the unaudited
consolidated financial statements for those same periods or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the corresponding amounts
in the audited consolidated financial statements include in the
Registration Statement and the Final Prospectus.
(B) any other unaudited financial statement data
included in the Final Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
data was derived and any such unaudited data were not determined on
a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statement included in
the Final Prospectus;
(C) at a specified date not more than three days
prior to the date of delivery of such respective letter, there was
any change in the consolidated capital stock, decline in
stockholders' equity or increase in long-term debt of the Company
and its subsidiaries, or other items specified by the Underwriters
in each case as compared with amounts shown in the latest balance
sheets included in the Final Prospectus, except in each case for
changes, decreases or increases which the Final Prospectus discloses
have occurred or may occur or which are described in such letters;
and
(D) for the period from the closing date of the
latest consolidated statements of income included in the Effective
Prospectus and the Final Prospectus to a specified date not more
than three days prior to the date of delivery of such respective
letter, there were any decreases in total revenues or net income of
the Company, or other items specified by the Underwriters, or any
increases in any items specified by the Underwriters, in each case
as compared with the corresponding period of the preceding year,
except in each case for decreases which the Final Prospectus
discloses have occurred or may occur or which are described in such
letter.
(iv) On the basis of (A) a reading of the
unaudited pro forma condensed consolidated statements of income for the
year ended January 5, 1996, and the nine-month period ended October 5,
1996, included in the Registration Statement, (B) inquiries of certain
officials of the Company and the Acquired Company, and (C) the proof of
the arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the unaudited pro forma condensed
consolidated financial statements, nothing came to their attention
that caused them to believe that the unaudited pro forma condensed
consolidated financial statements included in the Registration Statement
do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and that the
pro forma adjustment have not been properly applied to the
historical amounts in the compilation of those statements.
(v) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information specified by you which are derived from the general
accounting records of the Company and its subsidiaries and the Acquired
Company, as the case may be, which appear in the Effective Prospectus and
the Final Prospectus and have compared and agreed such amounts, percentages
financial information with the accounting records of the Company and its
subsidiaries and the Acquired Company, as the case may be or to analyses
and schedules prepared by the Company and its subsidiaries and the Acquired
Company, as the case may be from its detailed accounting records.
In the event that the letters to be delivered referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that the Underwriters shall have determined,
after discussions with officers of the Company responsible for financial and
accounting matters and with Xxxxx Xxxxxxxx LLP and Deloitte & Touche LLP, that
such changes, decreases or increases as are set forth in such letters do not
reflect a material adverse change in the stockholders' equity or long-term debt
of the Company as compared with the amounts shown in the latest consolidated
balance sheets of the Company included in the Final Prospectus, or a material
adverse change in total revenues or net income, of the Company, in each case as
compared with the corresponding period of the prior year.
(f) There shall have been furnished to you a certificate, dated as of the
Closing Date and addressed to you, signed by the Chief Executive Officer and by
the Chief Financial Officer of the Company to the effect that:
(i) the representations and warranties of the Company in Section 1
of this Agreement are true and correct, as if made at and as of the Closing
Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
initiated or are pending, or to their knowledge, threatened under the
Securities Act;
(iii) all filings required by Rule 424 and Rule 430A of the Rules
and Regulations have been made;
(iv) they have carefully examined the Registration Statement, the
Effective Prospectus and the Final Prospectus, and any amendments or
supplements thereto, and such documents do not include 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 not misleading; and
(v) since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement, the Effective Prospectus or the
Final Prospectus which has not been so set forth.
(g) The representations and warranties of the Selling Stockholder
shall be true and correct as if made at and as of the Closing Date and the
Selling Stockholder shall deliver to you a certificate to that effect, dated
the Closing Date, signed by Selling Stockholder.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, and except as
stated therein, the Company and its subsidiaries have not sustained any
material loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or governmental
action, order or decree, or become a party to or the subject of any
litigation which is material to the Company and its subsidiaries, taken as a
whole, nor shall there have been any material adverse change, or any
development involving a prospective material adverse change, in the business,
properties, key personnel, capitalization, net worth, results of operations
or condition (financial or other) of the Company and its subsidiaries, taken
as a whole, which loss, interference, litigation or change, in your
reasonable judgment shall render it inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to proceed with the delivery of the Shares.
(i) The Shares shall have been listed on the Nasdaq National Market.
(j) You shall have been furnished such additional documents and
certificates as you may reasonably request.
The Company and the Selling Stockholder shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for the
Option Shares shall be subject, in their discretion, to each of the foregoing
conditions to purchase the Firm Shares, except that all references to the
"Closing Date" shall be deemed to refer to the Second Closing Date, if it shall
be a date other than the Closing Date.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based in
whole or in part upon (i) any inaccuracy in the representations and warranties
of the Company and the Selling Stockholder contained herein, (ii) any failure of
the Company or the Selling Stockholder to perform their obligations hereunder or
under law, (iii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto, any audio or visual materials supplied by the Company and
used in connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings; or in any Blue Sky
application or other written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Shares under
the securities laws thereof (a "Blue Sky Application"), or (iv) the omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus or any amendment or
supplement thereto or any Blue Sky Application a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, or liability arises out of or is based upon (i) any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Preliminary Prospectus, the Effective Prospectus
or Final Prospectus or such amendment or such supplement (other than in any
documents, information or statements incorporated by reference therein) in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter specifically for use therein (it being understood
that the only information so provided is the information included in the last
paragraph on the cover page, the two paragraphs relating to stabilization
practices on the inside front cover and under the caption "Underwriting" in any
Preliminary Prospectus and the Final Prospectus and the Effective Prospectus) or
(ii) the failure of the Underwriters to deliver the Final Prospectus after the
effective date, as required under Section 4(3) of the Securities Act and Rule
174 thereunder (provided, that such failure to deliver was not the result of the
failure of the Company to timely supply sufficient quantities of the Final
Prospectus to the Underwriters upon the Underwriter's reasonable request).
(b) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based in whole or in part upon (i) any inaccuracy in the
representations and warranties of the Selling Stockholder contained herein,
(ii) any failure of the Selling Stockholder to perform his obligations
hereunder or under law, (iii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application or (iv) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or any
amendment or supplement thereto or any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred. The Selling Stockholder will not be liable in any such case to
the extent that any such loss, claim, damage, or liability arises out of or
is based upon (i) any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or such
amendment or such supplement (other than in any documents, information or
statements incorporated by reference therein) in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the only
information so provided is the information included in the last paragraph on
the cover
page, the two paragraphs relating to stabilization practices on the inside front
cover and under the caption "Underwriting" in any Preliminary Prospectus and the
Final Prospectus and the Effective Prospectus), or (ii) the failure of the
Underwriters to deliver the Final Prospectus after the effective date, as
required under Section 4(3) of the Securities Act and Rule 174 thereunder
(provided, that if such failure to deliver was the result of the failure of the
Company to timely supply sufficient quantities of the Final Prospectus to the
Underwriters upon the Underwriter's reasonable request, then the Company shall
indemnify the Underwriters and other persons set forth in this Section 8(b) with
respect to any associated losses, claims, damages or liabilities pursuant to
Section 8(a) above).
(c) Neither the Company nor the Selling Stockholder will, without prior
written consent of each Underwriter, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(d) Each Underwriter will indemnify and hold harmless the Company, each
of its directors, each person who has consented to be named in the Final
Prospectus as a proposed director, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of the Securities Act and the Selling Stockholder against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person or the Selling Stockholder may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto (other than in any documents, information or statements
incorporated by reference therein), or arise out of or are based upon the
omission or the alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus or any
amendment or supplement thereto a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the only
information so provided is the information included in the last paragraph on
the cover page, the two paragraphs relating to stabilization practices on the
inside front cover and under the caption "Underwriting" in any Preliminary
Prospectus and in the Effective Prospectus and the Final Prospectus);
(e) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, including governmental proceedings,
such indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8 notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8, except to the extent the indemnifying party
is irrevocably prejudiced thereby. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with any other counsel
satisfactory to such indemnified party; and after notice from the indemnifying
party to such indemnified party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation incurred at the direction of the indemnifying
party. The indemnified party shall have the right to employ separate counsel if
advised by separate counsel that one or more material legal defenses are
available to it that are different or in addition to those available to the
indemnified party, and in that event the reasonable fees and expenses of
separate counsel shall be paid by the indemnifying party. However, in no event,
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to local counsel, if any) separate from their own counsel
for all indemnified parties in connection with any action or separate, but
similar or related, actions arising out of the same general allegations or
circumstances.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
part of this Section 8 is for any reason held to be unavailable to the
Underwriters, the Company or the Selling Stockholders or is insufficient to
hold harmless an indemnified party, then the Company and the Selling
Stockholders shall contribute to the damages paid by the Underwriters, and
the Underwriters shall contribute to the damages paid by the Company and the
Selling Stockholders provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to
which the respective parties are entitled, there shall be considered the
relative benefits received by each party from the offering of the Shares
(taking into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances. The Company and the
Selling Stockholders and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by PRO RATA or
per capita allocation (even if the Underwriters were treated as one entity
for such purpose). No Underwriter or person controlling such Underwriter
shall be obligated to make contribution hereunder which in the aggregate
exceeds the underwriting discount applicable to the Shares purchased by such
Underwriter under this Agreement, less the aggregate amount of any damages
which such Underwriter and its controlling persons have otherwise been
required to pay in respect of the same or any similar claim. The
Underwriters' obligations to contribute hereunder are several in proportion
to their respective underwriting obligations and not joint. For purposes of
this Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
person who has consented to be named in the Final Prospectus as a proposed
director, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, and the Selling Stockholders shall have the
same rights to contribution as the Company.
(g) The obligations of the Company and the Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Securities Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Securities Act and to
the Selling Stockholder.
9. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or less
of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each non-
defaulting Underwriter in Schedule I hereto bears to the total number of Shares
set forth opposite the names of all the non-defaulting Underwriters), the Shares
which such defaulting Underwriter or Underwriters agreed but failed to purchase.
If any Underwriter so defaults and the total number of Shares with respect to
which such default or defaults occur is more than ten percent of the total
number of Shares to be sold hereunder, and arrangements satisfactory to the
other Underwriters, the Company and the Selling Stockholder for the purchase of
such Shares by other persons (who may include the non-defaulting
Underwriters)are not made within 36 hours after such default, this Agreement,
insofar as it relates to the sale of the Shares, will terminate without
liability on the part of the non-defaulting Underwriters, the Company or the
Selling Stockholder except for (i) the provisions of Section 8 hereof and (ii)
the expenses to be paid or reimbursed by the Company pursuant to Section 6. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 9. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. DEFAULT BY THE SELLING STOCKHOLDER. If the Selling Stockholder shall
fail to sell the number of Firm Shares that the Selling Stockholder is obligated
to sell, the Representatives may, at their option, by notice to the Company,
either (a) require the Company to sell and deliver the number of Firm Shares as
to which the
Selling Stockholder has defaulted, (b) elect to purchase the Firm Shares that
the Company has agreed to sell pursuant to this Agreement or(c) terminate this
Agreement without liability on the part of the Underwriters or the Company,
except for the provisions of Section 8 hereof and the expenses to be paid or
reimbursed by the Company pursuant to Section 6.
In the event of a default under this Section that does not result in the
termination of this Agreement, the Representatives shall have the right to
postpone the First Closing Date or Second Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. No action
taken pursuant to this Section shall relieve the Company or the Selling
Stockholder so defaulting from liability, if any, in respect of such default.
11. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Stockholder and the Underwriters set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Selling Stockholder, any Underwriter or any controlling
person,(ii) any termination of this Agreement and (iii) delivery of and payment
for the Shares.
12. EFFECTIVE DATE. This Agreement shall become effective at whichever of
the following times shall first occur: (i) at 11:30 A.M., Washington, D.C. time,
on the next full business day following the date on which the Registration
Statement becomes effective or (ii) at such time after the Registration
Statement has become effective as the Representatives shall release the Firm
Shares for sale to the public; PROVIDED, HOWEVER, that the provisions of
Sections 6, 8, 11 and 12 hereof shall at all times be effective. For purposes
of this Section 12, the Firm Shares shall be deemed to have been so released
upon the release by the Representatives for publication, at any time after the
Registration Statement has become effective, of any newspaper advertisement
relating to the Firm Shares or upon the release by the Representatives of
telegrams offering the Firm Shares for sale to securities dealers, whichever may
occur first.
13. TERMINATION. This Agreement may be terminated by the Representatives
by notice to the Company and the Selling Stockholder (i) at any time before it
becomes effective in accordance with Section 12 hereof; (ii) in the event that
at or prior to the First Closing Date the Company or the Selling Stockholder
shall have failed, refused or been unable to perform any agreement on the part
of the Company or the Selling Stockholder to be performed hereunder (or any
other condition to the obligations of the Underwriters hereunder is not
fulfilled); (iii) if at or prior to the Closing Date trading in securities on
the New York Stock Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended or limited or minimum or maximum prices shall
have been established on either of such Exchanges or such market, or a banking
moratorium shall have been declared by Federal or state authorities; (iv) if at
or prior to the Closing Date trading in securities of the Company shall have
been suspended; or (v) if there shall have been any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the reasonable judgment of the Representatives, the effect of
any such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Shares at the offering price to the public set forth on the cover page
of the Prospectus or to proceed with the delivery of the Shares. Termination of
this Agreement pursuant to this Section 13 shall be without liability of any
party to any other party other than as provided in Sections 6 and 8 hereof.
14. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to the Representatives in care of X. X. Xxxxxxxx & Co.,
X.X. Xxxxxxxx Financial Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxx Xxxxxxxxx or if sent to the Company shall be mailed, delivered
or telegraphed and confirmed in writing to the Company at 0000 Xxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, XX.
15. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company, the Selling Stockholder
and their respective successors and legal representatives. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in
respect of this Agreement. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Company,
the Selling Stockholder and the several Underwriters and for the benefit of
no other person except that(i) the representations and warranties and
indemnities of the Company, the Selling Stockholder and contained in this
Agreement shall also be for the benefit of any person or persons who control
any Underwriter within the meaning of Section 15 of the Securities Act and
(ii) the indemnities by the Underwriters shall also be for the benefit of the
directors of the Company, each person who has consented to be named in the
Final Prospectus as a proposed director, officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Securities Act. No purchaser
of Shares from any Underwriter will be deemed a successor because of such
purchase. The validity and interpretation of this Agreement shall be
governed by the laws of the State of Tennessee. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. You hereby represent and warrant to the Company that you have
authority to act hereunder on behalf of the several Underwriters, and any
action hereunder taken by you will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our agreement,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company, the Selling Stockholder and each of the several Underwriters.
Very truly yours,
XXXXXXX COMPUTER RESOURCES, INC.
By:
---------------------------------------------
Xxxxx X. Xxxxxxx, XX, Chief Executive Officer
SELLING STOCKHOLDER
By:
---------------------------------------------
Xxxxx X. Xxxxxxx, XX
Confirmed and accepted as of the date first above written.
X. X. XXXXXXXX & CO.
XXXXXX XXXXXXX INCORPORATED
For themselves and as Representatives of the Several Underwriters
By: X. X. Xxxxxxxx & Co.
By:
(Authorized Representative)
EXHIBIT A
FORM OF CORS & XXXXXXX LEGAL OPINION
It is our opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware, with full power and
authority to own its properties and conduct its business as now conducted.
Except where failure to do so would not have a material adverse effect on the
Company's financial condition, the Company (i) is duly qualified to do business
as a foreign corporation and is in good standing in all other jurisdictions
where the nature of its business or character of property owned or leased
require it to be qualified or authorized to do business and (ii) holds all
licenses, certificates, permits, franchises and authorizations from governmental
authorities necessary for the conduct of its business in all locations in which
such business is currently being conducted.
2. Each of the Company's subsidiaries is validly existing under the laws
of the state of its incorporation or organization, as the case may be, with full
power and authority to own its properties and conduct is business as now
conducted. Except where the failure to do so would have no material adverse
effect on the Company's financial condition, each such subsidiary (i) is duly
qualified or authorized to do business as a foreign corporation and is in good
standing in all other jurisdictions where the nature of its business or
character of property owned or leased require it to be qualified or authorized
to do business and (ii) holds all licenses, certificates, permits, franchises
and authorizations from governmental authorities necessary for the conduct of
its business in all locations in which such business is currently being
conducted. The outstanding stock of each of the Company's subsidiaries is duly
authorized, validly issued, and to our knowledge, fully paid and nonassessable.
All of the outstanding stock of each of the subsidiaries is owned beneficially
and of record by the Company, free and clear of all liens, encumbrances,
pledges, equities or claims of any kind, except as described in the Final
Prospectus. To our knowledge, no options or warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into any shares of capital stock or of ownership interests in
any of the Company's subsidiaries are outstanding.
3. As of the date specified therein, the Company has authorized and
issued capital stock as set forth under the caption "Capitalization" in the
Final Prospectus, and the Company's capital stock conforms to the description
thereof contained under the caption "Description of Capital Stock" in the final
prospectus dated ______, 1997 relating to the offering and sale of 1,020,000
shares of Common Stock. All of the issued shares of Common Stock (including the
Selling Stockholder Shares) have been duly authorized and are validly issued,
fully paid and nonassessable. The Company Shares and the Option Shares have
been duly and validly authorized, and upon issuance thereof and payment therefor
as provided in the Underwriting Agreement will be validly issued, fully paid and
nonassessable.
4. To our knowledge, none of the issued shares of capital stock of the
Company (other than the Selling Stockholder Shares) have been issued in
violation of or subject to any preemptive or similar rights and there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the transfer of the Shares or any other shares of Common Stock
pursuant to the Company's Certificate of Incorporation, Bylaws or any agreement
or instrument to which the Company or the Selling Stockholder is a party or by
which it may be bound. Neither the filing of the Registration Statement nor the
offer or sale of the Shares as contemplated thereby gives rise to any rights,
for or relating to the registration of any shares of Common Stock or any other
securities of the Company. The Underwriters have received good and marketable
title to the Company Shares, the Selling Stockholder Shares and the Option
Shares, if applicable, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders agreements and voting trusts
whatsoever, and the certificates for the Company Shares, Selling Stockholder
Shares and the Option Shares, if applicable are in due and proper form. None of
the Selling Stockholder Shares have been issued in violation of or subject to
any preemptive or similar rights and there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the transfer of
the Selling Stockholder Shares pursuant to the Company's Certificate
of Incorporation, Bylaws or any agreement or instrument to which the Company or
the Selling Stockholder is a party or by which it may be bound.
5. No consent, approval, authorization or order of any court,
governmental agency or body or, to our knowledge, any third party, is required
for the performance of the Underwriting Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby, except
such as have been obtained under the Act and such as may be required by the NASD
and other state securities or blue sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters. The performance of the
Underwriting Agreement by the Company and the consummation by the Company of the
transactions contemplated thereby will not conflict with or result in a breach
or violation by the Company or any of its subsidiaries of any of the terms or
provisions of, or constitute a default by the Company or any of its subsidiaries
under, the Certificate of Incorporation or Bylaws of the Company or any of its
subsidiaries, or, to our knowledge, (i) any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or to which the Company or any of its
subsidiaries or their properties are subject, (ii) any statute, or (iii) any
judgment, decree, order, rule or regulation of any court or governmental agency
or body applicable to the Company or any of its subsidiaries or their
properties.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, and the Company has full legal right, power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver the Company
Shares and the Option Shares to be sold by it to the Underwriters as provided
therein, except as such may be limited by bankruptcy, insolvency, reorganization
or similar laws relating to creditors' rights or debtors' obligations generally
and except that (i) the remedies of specific performance and injunctive and
other forms of relief are subject to general equitable principles, whether
enforcement is sought at law or in equity, (ii) such enforcement may be subject
to the discretion of the court before which any proceedings therefor may be
brought and (iii) rights to indemnity and contribution may be limited by state
or federal laws relating to securities or the policies underlying such laws.
7. To our knowledge, except as described in the Final Prospectus, there
is not pending or threatened, any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries is a party, or to
which the property of the Company or any of its subsidiaries is subject, before
or brought by any court or governmental agency or body, which, if determined
adversely to the Company or any of its subsidiaries, could result in a material
adverse change in the business, financial position, net worth or results of
operations, or could materially adversely affect the properties or assets, of
the Company and its subsidiaries, taken as a whole.
8. To our knowledge, no default exists and no event has occurred which,
with notice or after the lapse of time to cure or both, would constitute a
default in the due performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or to which they or their properties are subject, which default or event
would have material adverse effect on the Company and its subsidiaries.
9. Neither the Company nor any subsidiary is in violation of its
Certificate of Incorporation or Bylaws or, to our knowledge, in violation of any
law, administrative rule or regulation or arbitrators' or administrative or
court decree, judgment or order or in violation or default (there being no
existing state of facts which with notice or lapse of time or both would
constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract, indenture,
deed of trust, mortgage, loan agreement, note, lease, agreement or other
instrument or permit to which it is a party or by which it or any of its
properties is or may bound, where such violation or default could have a
material adverse effect on the business, financial position, net worth or
results of operations, or could materially adversely affect the properties or
assets, of Company or its subsidiaries, taken as a whole.
10. The Registration Statement and all post-effective amendments thereto
have become effective under the Act, and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending, or, to our knowledge,
threatened or contemplated by the Commission. All filings required by Rule 424
and Rule 430A of the Rules and Regulations have been made. The Registration
Statement, the Effective Prospectus and Final Prospectus, and any amendments or
supplements thereto, as of their respective effective or issue dates, complied
as to form with the requirements of the Act, the Exchange Act and the Rules and
Regulations. The descriptions in the Registration Statement, the Effective
Prospectus and the Final Prospectus of statutes, regulations, legal and
governmental proceedings, and contracts and other documents are accurate and
present fairly the information required to be stated therein. To our knowledge,
there are no pending or threatened legal or governmental proceedings, statutes
or regulations required to be described in the Final Prospectus which are not
described as required to be described in the Registration Statement or the Final
Prospectus or to be filed as exhibits to the Registration Statement which are
not described and filed as required.
11. The Company is not, and will not be as a result of the consummation of
the transactions contemplated by the Underwriting Agreement, as "investment
company" within the meaning of the Investment Company Act of 1940.
12. The Underwriting Agreement and the Custody Agreement described therein
have been duly executed and delivered by or on behalf of the Selling Stockholder
and constitute valid and binding agreements of the Selling Stockholder
enforceable against the Selling Stockholder in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws now or hereafter in effect relating to creditors'
rights or debtors' obligations generally and except that (i) the remedies of
specific performance and injunctive and other forms of relief are subject to
general equitable principles, whether enforcement is sought at law or in equity,
(ii) such enforcement may be subject to the discretion of the court before which
any proceedings therefor may be brought and (iii) rights to indemnity and
contribution may be limited by state or federal laws relating to securities or
the policies underlying such laws. All authorizations and consents necessary
for the execution and delivery of the Underwriting Agreement and the Custody
Agreement on behalf of the Selling Stockholder and for the sale and delivery of
the Selling Stockholder Shares to be sold by the Selling Stockholder hereunder
have been given. To our knowledge, there are no facts which would cause the
Selling Stockholder to lack the legal capacity and full right, power and
authority to execute the Underwriting Agreement and the Custody Agreement and
the Power of Attorney.
13. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated by the Underwriting Agreement in connection with the Selling
Stockholder Shares to be sold by the Selling Stockholder thereunder, except such
as have been obtained under the Act and such as may be required by the NASD and
other state securities or blue sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters.
14. As of the closing, the Selling Stockholder has made good delivery,
duly endorsed, to the Underwriters or to a financial intermediary designated by
the Underwriters of the Selling Stockholder Shares, if applicable, and, assuming
that the Underwriters constitute bona fide purchasers as defined in Section 8-
302 of the Uniform Commercial Code, the Selling Stockholder has transferred good
and marketable title to the Selling Stockholder Shares, free and clear of any
and all liens, pledges, encumbrances, charges, agreements, equities, claims,
security interests, restrictions, shareholder agreements or voting trusts.
We have participated in the preparation of the Registration Statement, the
Effective Prospectus and the Final Prospectus and in conferences with officers
and other representatives of the Company, counsel for the Underwriters,
representatives of the independent public accountants for the Company, and your
representatives at which the contents of the Registration Statement, the
Effective Prospectus and the Final Prospectus were discussed, and no facts have
come to our attention which lead us to believe that the Registration Statement,
the Effective Prospectus or the Final Prospectus, or any amendment or supplement
thereto, contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that
we express no view as to financial statements or other financial data contained
in the Registration Statement, the Effective Prospectus or the Final Prospectus.
EXHIBIT B
FORM OF XXXXXXXXX & DREIDAME LEGAL OPINION
It is our opinion that:
1. All sales of the Company's securities prior to the date hereof were at
all relevant times duly registered or exempt from the registration requirements
of the Act and were duly registered or the subject of an exemption from the
registration requirements of applicable state securities or blue sky laws.
2. To our knowledge, no default exists and no event has occurred which,
with notice or after the lapse of time to cure or both, would constitute a
default in the due performance and observance of any term, covenant or condition
of any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its subsidiaries a party
or to which they or their properties are subject, which default or event would
have a material adverse effect on the Company and its subsidiaries.
3. Neither the Company nor any subsidiary is in violation of its
Certificate of Incorporation or Bylaws or, to our knowledge, in violation of any
law, administrative rule or regulation or arbitrators' or administrative or
court decree, judgment or order or in violation or default (there being no
existing state of facts which with notice or lapse of time or both would
constitute a default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract, indenture,
deed of trust, mortgage, loan agreement, note, lease, agreement or other
instrument or permit to which it is a party or by which it or any of its
properties is or may bound, where such violation or default could have a
material adverse effect on the business, financial position, net worth or
results of operations, or could materially adversely affect the properties or
assets, of Company or its subsidiaries, taken as a whole.
4. To our knowledge, the performance of the Underwriting Agreement and
the Custody Agreement and the consummation of the transactions contemplated
thereby by the Selling Stockholder will not result in a breach or violation of,
or conflict with, any of the terms or provisions of, or constitute a default by
the Selling Stockholder under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease franchise, license or other
agreement or instrument to which the Selling Stockholder or any of the Selling
Stockholder's properties is bound, any statute, or any judgment, decree, order,
rule or regulation of any court or governmental agency or body applicable to the
Selling Stockholder.
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
Underwriter to be Purchased
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X.X. XXXXXXXX & CO.
XXXXXX XXXXXXX INCORPORATED
TOTAL 1,100,000
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