DRAFT: 1/11/99
_______________ SHARES
XXXXXXX SELECT INTEGRATION SOLUTIONS, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
DATED [ ], 1999
UNDERWRITING AGREEMENT
[Date]
NATIONSBANC XXXXXXXXXX SECURITIES LLC
X. X. XXXXXXXX & CO., LLC
WHEAT FIRST UNION, a division of WHEAT FIRST SECURITIES, INC.
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Xxxxxxx Select Integration Solutions, Inc., a
Delaware corporation (the "Company"), proposes to issue and sell to the several
underwriters named in SCHEDULE A (the "Underwriters") an aggregate of
[ ] shares (the "Firm Common Shares") of its Class A Common Stock, par
value $0.01 per share (the "Class A Common Stock"). In addition, the Company
has granted to the Underwriters an option to purchase up to an additional
[ ] shares (the "Optional Common Shares") of Class A Common Stock, as
provided in Section 2. The Firm Common Shares and, if and to the extent such
option is exercised, the Optional Common Shares are collectively called the
"Common Shares." The Company, prior to the transactions contemplated hereby, is
a wholly-owned subsidiary of Xxxxxxx Computer Resources, Inc., a Delaware
corporation ("PCR"). NationsBanc Xxxxxxxxxx Securities LLC, X. X. Xxxxxxxx &
Co., LLC and Wheat First Union, a division of Wheat First Securities, Inc., have
agreed to act as representatives of the several Underwriters (in such capacity,
the "Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-[ ]), which contains a form of prospectus to be used in
connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Securities Act"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Securities Act, is
called the "Registration Statement". Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the
"Rule 462(b) Registration Statement", and from and after the date and time of
filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. Such
prospectus, in the form first used by the Underwriters to confirm sales of the
Common Shares, is called the "Prospectus"; provided, however, if the Company
has,
with the consent of NationsBanc Xxxxxxxxxx Securities LLC, elected to rely upon
Rule 434 under the Securities Act, the term "Prospectus" shall mean the
Company's prospectus subject to completion (each, a "preliminary prospectus")
dated [ ] (such preliminary prospectus is called the "Rule 434
preliminary prospectus"), together with the applicable term sheet (the "Term
Sheet") prepared and filed by the Company with the Commission under Rules 434
and 424(b) under the Securities Act and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. All references in
this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
The Company and PCR hereby confirm their respective agreements
with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PCR
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PCR
Each of the Company and PCR hereby represents, warrants and covenants to
each Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The
Registration Statement and any Rule 462(b) Registration Statement have
been declared effective by the Commission under the Securities Act. The
Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be permitted
by Regulation S-T under the Securities Act), was identical to the copy
thereof delivered to the Underwriters for use in connection with the
offer and sale of the Common Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective
amendment thereto, at the time it became effective and at all subsequent
times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date and at all
subsequent times, did not and will not contain any 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 representations and
warranties set forth in the two
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immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus,
or any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by any of the Representatives expressly for use
therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the
Registration Statement which have not been described or filed as
required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The
Company has delivered to the Representatives four complete manually
signed copies of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of
the Registration Statement (without exhibits) and preliminary
prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIALS BY THE COMPANY. The
Company has not distributed and will not distribute, prior to the later
of the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering materials
in connection with the offering and sale of the Common Shares other than
a preliminary prospectus, the Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, each of the Company and PCR, enforceable in accordance
with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(e) AUTHORIZATION OF THE COMMON SHARES. The Common Shares to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR
RIGHTS. Except for the registration rights of PCR disclosed in the
Prospectus, there are no persons with registration or other similar
rights to have any equity or debt securities registered for sale under
the Registration Statement or included in the offering contemplated by
this Agreement or otherwise. The registration rights of PCR disclosed
in the Prospectus are not triggered by the registration of the Common
Shares registered for sale under the Registration Statement.
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(g) NO MATERIAL ADVERSE CHANGE. Except as otherwise
disclosed in the Prospectus, subsequent to the respective dates as of
which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary
course of business, of the Company (any such change is called a
"Material Adverse Change"); (ii) the Company has not incurred any
material liability or obligation, indirect, direct or contingent, not in
the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of capital stock or repurchase
or redemption by the Company of any class of capital stock.
(h) INDEPENDENT ACCOUNTANTS. Xxxxx Xxxxxxxx LLP, who have
expressed their opinion with respect to the financial statements (which
term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent
public or certified public accountants as required by the Securities
Act.
(i) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the financial
position of the Company as of and at the dates indicated and the results
of its operations and cash flows for the periods specified. The
supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as may be expressly stated
in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration
Statement. The financial data set forth in the Prospectus under the
captions "Prospectus Summary -- Summary Historical Selected Financial
Data", "Capitalization," "Selected Historical Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Selected Quarterly Results of Operations" fairly
present the information set forth therein on a basis consistent with
that of the audited financial statements contained in the Registration
Statement.
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY. The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform
its obligations under this Agreement. The Company is duly qualified as
a foreign corporation to transact business and is in good standing in
the Commonwealth of Kentucky and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of
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property or the conduct of business, except for such jurisdictions
(other than the Commonwealth of Kentucky) where the failure to so
qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. The Company has no
subsidiaries.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under the caption "Capitalization" (other
than for subsequent issuances, if any, pursuant to stock option plans or
other employee benefit plans described in the Prospectus or upon
exercise of outstanding options described in the Prospectus). The
Class A Common Stock (including the Common Shares) and the Class B
Common Stock, $0.01 par value per share (the "Class B Common Stock")
conform in all material respects to the descriptions thereof contained
in the Prospectus. Prior to the transactions contemplated hereby and by
the Prospectus, there are no shares of Class A Common Stock issued or
outstanding. All of the issued and outstanding shares of Class B Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. The shares of Class A Common Stock to be issued upon
conversion of the Class B Common Stock, such conversion to be in
compliance with the terms and provisions of the Company's certificate of
incorporation, will be validly issued, fully paid and nonassessable.
None of the outstanding shares of Class B Common Stock were issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity
or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company other than those accurately described
in the Prospectus. The description of the Company's stock option, stock
bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(l) NO DIVIDENDS. No dividends have been declared, have
accrued or are due with respect to any shares of capital stock,
including the Class B Common Stock, of the Company.
(m) STOCK EXCHANGE LISTING. The Common Shares have been
approved for inclusion on the Nasdaq National Market, subject only to
official notice of issuance and effectiveness of the Registration
Statement.
(n) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. The Company is not in violation
of its charter or by-laws or in default (or, with the giving of notice
or lapse of time, would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or
other instrument to which the Company is a party or by which it may be
bound
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(including, without limitation, the Company's credit facility effective
January 6, 1999 with Deutsche Financial Services Corporation, as lead
lender, and Star Bank, as participant), or to which any of the property
or assets of the Company is subject (each, an "Existing Instrument"),
except for such Defaults as would not, individually or in the aggregate,
result in a Material Adverse Change. The Company's execution, delivery
and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus (i) have been duly authorized
by all necessary corporate action and will not result in any violation
of the provisions of the charter or by-laws of the Company or PCR,
(ii) will not conflict with or constitute a breach of, or Default or a
Debt Repayment Triggering Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, or require the consent of
any other party to, any Existing Instrument, except for such conflicts,
breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change
and (iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company.
No consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental or regulatory authority
or agency, is required for the Company's execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and
from the National Association of Securities Dealers, Inc. (the "NASD").
As used herein, a "Debt Repayment Triggering Event" means any event or
condition which gives, or with the giving of notice or lapse of time
would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company.
(o) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal
or governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against or affecting the
Company, (ii) which has as the subject thereof any officer or director
of, or property owned or leased by, the Company or (iii) relating to
environmental or discrimination matters, where in any such case
(A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably
be expected to result in a Material Adverse Change or adversely affect
the consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company exists or, to
the best of the Company's knowledge, is threatened or imminent.
(p) INTELLECTUAL PROPERTY RIGHTS. The Company owns or
possesses the lawful right to use and exploit sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property
Rights") reasonably necessary to conduct its business as now
6
conducted; and the expected expiration of any of such Intellectual
Property Rights would not result in a Material Adverse Change. Neither
the Company nor PCR has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which infringement
or conflict, if the subject of an unfavorable decision, would result in
a Material Adverse Change.
(q) ALL NECESSARY PERMITS, AND AUTHORIZATIONS. The Company
possesses such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies
or bodies or information technology vendors, hardware manufacturers
and/or software developers, including all authorizations described in or
contemplated by the Prospectus, necessary to conduct its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
(r) TITLE TO PROPERTIES. The Company has good and marketable
title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(A)(i) above, or has the
right to use such properties pursuant to the Space Sharing Agreement
dated January 6, 1999 with PCR, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company. The real
property, improvements, equipment and personal property held under lease
by the Company are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the
use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company.
(s) TAX LAW COMPLIANCE. PCR has filed all necessary federal,
state and foreign income and franchise tax returns applicable to the
historical business of the Company and has paid all taxes required to be
paid by PCR or the Company and, if due and payable, any related or
similar assessment, fine or penalty levied against either of them except
as may be being contested in good faith and by appropriate proceedings.
The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in Section 1(A)(i) above in
respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability applicable to the Company has
not been finally determined.
(t) COMPANY NOT AN "INVESTMENT COMPANY". The Company has
been advised of the rules and requirements under the Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Company is
not, and after receipt of payment for the Common Shares will not be, an
"investment company" within the
7
meaning of Investment Company Act and will conduct its business in a
manner so that it will not become subject to the Investment Company Act.
(u) INSURANCE. The Company is insured by recognized,
financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for its business including, but
not limited to, policies covering real and personal property owned or
leased by the Company against theft, damage, destruction, acts of
vandalism and earthquakes. The Company has no reason to believe that it
will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change. The Company has not been denied any insurance
coverage which it has sought or for which it has applied. The Company
has obtained and is the beneficiary of the key person life insurance
policy as set forth in the Prospectus.
(v) NO PRICE STABILIZATION OR MANIPULATION. The Company has
not taken and will not take, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(w) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or PCR
required to be described in the Prospectus which have not been described
as required.
(x) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the
Company nor PCR nor, to the best of the Company's knowledge, any
employee or agent of the Company or PCR, has made any contribution or
other payment to any official of, or candidate for, any federal, state
or foreign office in violation of any law or of the character required
to be disclosed in the Prospectus.
(y) COMPANY'S ACCOUNTING SYSTEM. The Company, either
directly or through its agreements with PCR, maintains a system of
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(z) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not,
individually or in the aggregate, result in a Material Adverse Change
(i) neither the Company nor PCR is in violation of any federal, state,
local or foreign law or regulation
8
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environment Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation
of the business of the Company under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company
or PCR received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the
Company or PCR is in violation of any Environmental Law; (ii) there is
no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company or PCR has
received written notice, and no written notice by any person or entity
alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out of,
based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company, now or in the past
(collectively, "Environmental Claims"), pending or, to the best of the
Company's or PCR's knowledge, threatened against the Company or PCR or
any person or entity whose liability for any Environmental Claim the
Company or PCR has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's or PCR's
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in a
violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or PCR or against any person or
entity whose liability for any Environmental Claim the Company or PCR
has retained or assumed either contractually or by operation of law.
(aa) ERISA COMPLIANCE. The Company and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations
thereunder (collectively, "ERISA")) established or maintained by the
Company, or its "ERISA Affiliates" (as defined below) are in compliance
in all material respects with ERISA. "ERISA Affiliate" means, with
respect to the Company, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code
of 1986, as amended, and the regulations and published interpretations
thereunder (the "Code") of which the Company is a member. No
"reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, or any of its ERISA
Affiliates. No "employee benefit plan"
9
established or maintained by the Company or any of its ERISA
Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company nor any of its ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
"employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of
the Code. Each "employee benefit plan" established or maintained by
the Company or any of its ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
(bb) YEAR 2000 PROBLEM. The Company has reviewed its
products, business and operations which could be adversely affected by
the Year 2000 problem (as defined below). The Company has developed a
program to address on a timely basis the risk that computer applications
developed, marketed, sold and delivered or used by the Company may be
unable to recognize and properly perform date-sensitive functions
involving dates during and after 1999 (the "Year 2000 Problem"). The
Year 2000 Problem has not resulted in, and is not reasonably expected to
result in, a Material Adverse Change.
(cc) NO BROKERS OR FINDERS. Other than as contemplated by
this Agreement, there is no broker, finder or other party that is
entitled to receive from the Company any underwriting, brokerage or
finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(dd) NASD AFFILIATION. To the best of the Company's or PCR's
knowledge, there are no affiliations or associations between any member
of the NASD and any of the Company's officers, directors or security
holders.
(ee) AGREEMENTS WITH PCR. Each agreement or contract by and
between the Company and PCR has been filed as an Exhibit to the
Registration Statement, and each of such agreements or contracts has
been duly authorized, executed and delivered by, and is a valid and
binding agreement of each of the Company and PCR enforceable in
accordance with its terms. Each agreement has been accurately described
in the Prospectus. There are no material agreements, written or oral,
required to be described in the Prospectus which have not been described
as required.
(ff) CONTRIBUTION AGREEMENT. Pursuant to the Contribution
Agreement by and between the Company and PCR dated January 6, 1999, the
form of which is filed as an Exhibit to the Registration Statement, the
Company has received from PCR and its subsidiaries all assets required to
operate the information technology services business of the Company as
described in or contemplated by the Prospectus. All services employees
of PCR have become employees of the Company and all material services
contracts with customers and authorizations from vendors have been
properly assigned to the Company. All
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requisite consents from all material customers and vendors have been
obtained by the Company and PCR.
Any certificate signed by an officer of the Company or PCR and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company or PCR, as the case
may be, to each Underwriter as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) THE FIRM COMMON SHARES. The Company agrees to issue and
sell to the several Underwriters the Firm Common Shares upon the terms
but subject to the conditions herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon
the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the
Company the respective number of Firm Common Shares set forth opposite
their names on SCHEDULE A. The purchase price per Firm Common Share to
be paid by the several Underwriters to the Company shall be
$[ ] per share.
(b) THE FIRST CLOSING DATE. Delivery of certificates for the
Firm Common Shares to be purchased by the Underwriters and payment
therefor shall be made at the offices of NationsBanc Xxxxxxxxxx
Securities LLC, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or
such other place as may be agreed to by the Company and the
Representatives) at 6:00 a.m. San Francisco time, on [ ], or
such other time and date not later than 10:30 a.m. San Francisco time,
on [ ] as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the "First Closing
Date"). The Company hereby acknowledges that circumstances under which
the Representatives may provide notice to postpone the First Closing
Date as originally scheduled include, but are in no way limited to, any
reasonable determination by the Company or the Representatives to
recirculate to the public copies of an amended or supplemented
Prospectus or a delay as contemplated by the provisions of Section 10.
(c) THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. In
addition, on the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions
herein set forth, the Company hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate
of [ ] Optional Common Shares from the Company at the purchase
price per share to be paid by the Underwriters for the Firm Common
Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder
may be exercised at any time (but not more than once) upon notice by the
Representatives to the Company which notice may be given at any time
within 30 days from the date of this Agreement or the date of the
Prospectus, whichever is later. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to
11
which the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Common Shares
are to be registered and (iii) the time, date and place at which such
certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the
term "First Closing Date" shall refer to the time and date of delivery
of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First
Closing Date, is called the "Second Closing Date" and shall be
determined by the Representatives and shall not be earlier than three
nor later than five full business days after delivery of such notice of
exercise. If any Optional Common Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be
purchased as the number of Firm Common Shares set forth on SCHEDULE A
opposite the name of such Underwriter bears to the total number of Firm
Common Shares. The Representatives may cancel the option at any time
prior to its expiration by giving written notice of such cancellation to
the Company.
(d) PUBLIC OFFERING OF THE COMMON SHARES. The
Representatives hereby advise the Company that the Underwriters intend
to offer for sale to the public, as described in the Prospectus, their
respective portions of the Common Shares as soon after this Agreement
has been executed and the Registration Statement has been declared
effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) PAYMENT FOR THE COMMON SHARES. Payment for the Common
Shares shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds
to the order of the Company.
It is understood that the Representatives have been authorized,
for each of their respective accounts and the accounts of the several
Underwriters, to accept delivery of and receipt for, and make payment of
the purchase price for, the Firm Common Shares and any Optional Common
Shares the Underwriters have agreed to purchase. NationsBanc Xxxxxxxxxx
Securities LLC, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any
Common Shares to be purchased by any Underwriter whose funds shall not
have been received by the Representatives by the First Closing Date or
the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter
from any of its obligations under this Agreement.
(f) DELIVERY OF THE COMMON SHARES. The Company shall
deliver, or cause to be delivered, to the Representatives for the
accounts of the several Underwriters certificates for the Firm Common
Shares at the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the
purchase
12
price therefor. The Company shall also deliver, or cause to be
delivered, to the Representatives for the accounts of the several
Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the
Second Closing Date, as the case may be, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Common Shares shall
be in definitive form and registered in such names and denominations as
the Representatives shall have requested at least two full business days
prior to the First Closing Date (or the Second Closing Date, as the case
may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the
case may be) at a location in New York City as the Representatives may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later
than 12:00 p.m. on the second business day following the date the Common
Shares are released by the Underwriters for sale to the public, the
Company shall deliver or cause to be delivered copies of the Prospectus
in such quantities and at such places as the Representatives shall
request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY AND PCR.
A. COVENANTS OF THE COMPANY. The Company further covenants
and agrees with each Underwriter as follows:
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. During such period beginning on the date hereof and ending
on the later of the First Closing Date or such date, as in the opinion
of counsel for the Underwriters, the Prospectus is no longer required by
law to be delivered in connection with sales by an Underwriter or dealer
(the "Prospectus Delivery Period"), prior to amending or supplementing
the Registration Statement (including any registration statement filed
under Rule 462(b) under the Securities Act) or the Prospectus, the
Company shall furnish to the Representatives for review a copy of each
such proposed amendment or supplement, and the Company shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object.
(b) SECURITIES ACT COMPLIANCE. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii) of
the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date
that any post-effective amendment to the Registration Statement
becomes effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
13
or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Class A Common Stock from any securities
exchange upon which it is listed for trading or included or designated
for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. Additionally,
the Company agrees that it shall comply with the provisions of
Rules 424(b), 430A and 434, as applicable, under the Securities Act and
will use its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) were received in a timely manner by the
Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the
opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply with
law, the Company agrees to promptly prepare (subject to Section 3(A)(a)
hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE
PROSPECTUS. The Company agrees to furnish the Representatives, without
charge, during the Prospectus Delivery Period, as many copies of the
Prospectus and any amendments and supplements thereto as the
Representatives may request.
(e) BLUE SKY COMPLIANCE. The Company shall cooperate with
the Representatives and counsel for the Underwriters to qualify or
register the Common Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian
provincial securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise
the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares
for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any order
14
suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) USE OF PROCEEDS. The Company shall apply the net
proceeds from the sale of the Common Shares sold by it in the manner
described under the caption "Use of Proceeds" in the Prospectus.
(g) TRANSFER AGENT. The Company shall engage and maintain,
at its expense, a registrar and transfer agent for the Class A Common
Stock.
(h) EARNINGS STATEMENT. As soon as practicable but not later
than [ ], the Company will make generally available to its
security holders and to the Representatives an earnings statement (which
need not be audited), covering at least the twelve-month period
beginning after the effective date of the Registration Statement, that
satisfies the provisions of Section 11(a) of the Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Additionally, the Company shall file the
requisite reports with the Commission under the Exchange Act which
include all information as may be required under Rule 463 under the
Securities Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
During the period of 180 days following the date of the Prospectus,
the Company will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities LLC (which consent may be withheld at the sole
discretion of NationsBanc Xxxxxxxxxx Securities LLC), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration
statement under the Securities Act in respect of, any shares of Class
A or Class B Common Stock, options or warrants to acquire shares of
Class A or Class B Common Stock or securities exchangeable or
exercisable for or convertible into shares of Class A or Class B
Common Stock (other than as contemplated by this Agreement with
respect to the Common Shares); PROVIDED, HOWEVER, that the Company may
issue shares of its Class A Common Stock or grant options to purchase
its Class A Common Stock, or issue shares of Class A Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Prospectus, but only
if (i) such options do not vest until after the expiration of the 180
day period following the date of the Prospectus or (ii) the holders of
such shares, options, or shares issued upon exercise of such options,
agree in writing not to sell, offer, dispose of or otherwise transfer
any such shares or options during such 180 day period without the
prior written consent of NationsBanc Xxxxxxxxxx Securities LLC (which
consent may be withheld at the sole discretion of the NationsBanc
Xxxxxxxxxx Securities LLC).
15
(k) FUTURE REPORTS TO THE REPRESENTATIVES. During the period
of five years hereafter the Company will furnish to the Representatives
(NationsBanc Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 Attention: Xxxx Xxxxxxxxxxx; X. X. Xxxxxxxx
& Co., 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx
Xxxxxxxxx; and Wheat First Union, Riverfront Plaza, West Tower, 000 Xxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxxx) (i) as
soon as practicable after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the Company
as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by
the Company with the Commission, the NASD or any securities exchange;
and (iii) as soon as available, copies of any report or communication of
the Company mailed generally to holders of its capital stock.
(l) RELATED PARTY TRANSACTIONS. The Company will not enter
into any transaction with its officers, directors, principal stockholder
or any of their Affiliates (including PCR) on terms less favorable to
the Company than terms obtainable from unrelated third parties. Any
related party transaction shall be approved by a majority of the
disinterested members of the Company's Board of Directors.
B. COVENANTS OF PCR. PCR further covenants and agrees with
each Underwriter:
(a) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
PCR will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities LLC (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale),
pledge, transfer, establish an open "put equivalent position" within
the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise
dispose of any shares of Class A or Class B Common Stock (including
any distribution or dividend of shares of Class B Common Stock to any
stockholder of PCR), options or warrants to acquire shares of Class A
or Class B Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Class A or Class B Common Stock
currently or hereafter owned either of record or beneficially (as
defined in Rule 13d-3 under Securities Exchange Act of 1934, as
amended) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the
date hereof and continuing through the close of trading on the date
180 days after the date of the Prospectus.
NationsBanc Xxxxxxxxxx Securities LLC, on behalf of the several
Underwriters, may, in its sole discretion, waive in writing the performance by
the Company of any one or more of the foregoing covenants or extend the time for
their performance.
16
SECTION 4. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred
in connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the Common
Shares (including all printing and engraving costs), (ii) all fees and expenses
of the registrar and transfer agent of the Class A Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
such fees and expenses not to exceed $[ ], (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, such fees and expenses not to exceed $[ ], (viii) the fees and
expenses associated with listing the Common Shares on the Nasdaq National
Market, and (ix) all other fees, costs and expenses referred to in Item 13 of
Part II of the Registration Statement. Except as provided in this Section 4,
Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay
for the Common Shares as provided herein on the First Closing Date and, with
respect to the Optional Common Shares, the First or Second Closing Date, shall
be subject to the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 hereof as of the date hereof and as of the
First Closing Date as though then made and, with respect to the Optional Common
Shares, as of the Second Closing Date, if applicable, as though then made, to
the timely performance by the Company and of PCR, their respective covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, each of
the Representatives shall have received from Xxxxx Xxxxxxxx LLP,
independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountant's "comfort
17
letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus
(and the Representatives shall have received an additional three (3)
conformed copies of such accountants' letter for each of the several
Underwriters).
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER;
NO OBJECTION FROM NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with
the Commission (including the information required by Rule 430A
under the Securities Act) in the manner and within the time
period required by Rule 424(b) under the Securities Act; or the
Company shall have filed a post-effective amendment to the
Registration Statement containing the information required by
such Rule 430A, and such post-effective amendment shall have
become effective; or, if the Company elected to rely upon
Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed a
Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement,
or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have
been instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(c) NO MATERIAL ADVERSE CHANGE. For the period from and
after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing
Date, in the judgment of the Representatives there shall not have
occurred any Material Adverse Change.
(d) OPINION OF COUNSEL FOR THE COMPANY AND PCR. On each of
the First Closing Date and the Second Closing Date each of the
Representatives shall have received the favorable opinion of Cors and
Xxxxxxx, counsel for the Company and PCR, dated as of such Closing Date,
the form of which is attached as EXHIBIT A (and the Representatives
shall have received an additional ten (10) conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the
First Closing Date and the Second Closing Date each of the
Representatives shall have received the favorable opinion of Xxxxxxxx
Ingersoll Professional Corporation, counsel for the
18
Underwriters, dated as of such Closing Date, with respect to the matters
set forth in paragraphs (i), (v) (with respect to subparagraph (i)
only), (vi), (vii), (viii), (ix), (x) and (xi) (with respect to the
captions "Description of Capital Stock" and "Underwriting" under
subparagraph (i) only), and the next-to-last paragraph of EXHIBIT A (and
the Representatives shall have received an additional ten (10) conformed
copies of such counsel's legal opinion for each of the several
Underwriters).
(f) OFFICERS' CERTIFICATE. On each of the First Closing
Date and the Second Closing Date the Representatives shall have
received a written certificate executed by the President and Chief
Executive Officer of the Company and the Chief Financial Officer of
the Company, dated as of such Closing Date, to the effect set forth in
subsection (b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not occurred
any Material Adverse Change;
(ii) the representations, warranties and covenants of
the Company set forth in Section 1(A) of this Agreement are true
and correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) 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 such Closing Date.
(g) BRING-DOWN COMFORT LETTER. On each of the First Closing
Date and the Second Closing Date each of the Representatives shall have
received from Xxxxx Xxxxxxxx LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representatives, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant to
subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date or Second
Closing Date, as the case may be (and the Representatives shall have
received an additional three (3) conformed copies of such accountants'
letter for each of the several Underwriters).
(h) PRINCIPAL STOCKHOLDERS' CERTIFICATE. On each of the
First Closing Date and the Second Closing Date each of the
Representatives shall received a written certificate executed by a duly
authorized officer of PCR, dated as of such Closing Date, to the effect
that:
(i) the representations, warranties and covenants of
PCR set forth in Section 1(A) of this Agreement are true and
correct with the same force and effect as though expressly made
by PCR on and as of such Closing Date; and
19
(ii) PCR has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(i) LOCK-UP AGREEMENTS. On the date hereof, the Company
shall have furnished to the Representatives an agreement in the form of
EXHIBIT B hereto from each director, officer and each beneficial owner
of Class A or Class B Common Stock (as defined and determined according
to Rule 13d-3 under the Exchange Act) and such agreement shall be in
full force and effect on each of the First Closing Date and the Second
Closing Date.
(j) ADDITIONAL DOCUMENTS. On or before each of the First
Closing Date and the Second Closing Date, each of the Representatives
and counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably require for the purposes
of enabling them to pass upon the issuance and sale of the Common Shares
as contemplated herein, or in order to evidence the accuracy of any of
the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant
to Section 5, Section 7 or Section 11, or if the sale to the Underwriters of the
Common Shares on the First Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company or PCR to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges, subject to the limits, if
any, set forth in Section 4 hereof.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of
(i) the execution of this Agreement by the parties hereto and (ii) notification
by the Commission to the Company and the Representatives of the effectiveness of
the Registration Statement under the Securities Act.
20
Prior to such effectiveness, this Agreement may be terminated by
any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4
and 6 hereof, (b) of any Underwriter to the Company, or (c) of any party hereto
to any other party except that the provisions of Section 8 and Section 9 shall
at all times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. Each of the Company
and PCR, jointly and severally, agree to indemnify and hold harmless
each Underwriter, its officers and employees, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Underwriter or such controlling
person may become subject, under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof
as contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
or (iii) in whole or in part upon any inaccuracy in the representations
and warranties of the Company or PCR contained herein; or (iv) in whole
or in part upon any failure of the Company or PCR to perform their
respective obligations hereunder or under law; or (v) any act or failure
to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Class A Common Stock
or the offering contemplated hereby, and which is included as part of
any loss, claim, damage, liability or action arising out of or based upon
any matter covered by clause (i) or (ii) above, provided that the Company
shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its bad faith or willful misconduct; and to reimburse
each Underwriter and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by
NationsBanc Xxxxxxxxxx Securities LLC) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection
with investigating, defending,
21
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the Representatives
expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto);
and provided, further, that with respect to any preliminary prospectus,
the foregoing indemnity agreement shall not inure to the benefit of any
Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to
the Underwriter pursuant to Section 2 and a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf
of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or expense. The indemnity agreement set forth
in this Section 8(a) shall be in addition to any liabilities that the
Company and PCR may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND
OFFICERS. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, 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
or the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out
of or is based upon any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), or arises
out of or is based upon the omission or alleged omission to state
therein 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 the Registration
Statement, any preliminary prospectus, the Prospectus (or any amendment
or supplement thereto), in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly
for use therein; and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense
or action. Each of the Company and PCR, hereby acknowledges that
22
the only information that the Unerwriters have furnished to the Company
expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto)
are the statements set forth in the table in the first paragraph and as
the second, seventh and eighth paragraphs under the caption
"Underwriting" in the Prospectus; and the Underwriters confirm that such
statements are correct. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 8, notify the indemnifying party in writing
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 for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent
it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval
by the indemnified party of counsel, 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 unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to
the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with local counsel), approved by the
indemnifying party (NationsBanc Xxxxxxxxxx Securities LLC in the case
of Section 8(b) and Section 9), representing the indemnified parties
who are parties to such action) or (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
23
(d) SETTLEMENTS. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder
by such indemnified party, unless such settlement, compromise or consent
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and PCR on the one hand, and the Underwriters,
on the other hand, from the offering of the Common Shares pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and PCR, on the one hand, and the Underwriters, on the
other hand, in connection with the statements or omissions or inaccuracies in
the representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and PCR, on the
one hand, and the Underwriters, on the other hand, in connection with the
offering of the Common Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Common Shares pursuant to this Agreement (before deducting expenses)
received by the Company, and the total underwriting discount received by the
Underwriters, in each case as set forth on the front cover page of the
Prospectus (or, if Rule 434 under the Securities Act is used, the corresponding
location on the Term Sheet) bear to the aggregate initial public offering price
of the Common Shares as set forth on such cover. The relative fault of the
Company and PCR, on the one hand, and the Underwriters, on the other hand, shall
be
24
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or
PCR, on the one hand, or the Underwriters, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, PCR and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. 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. The Underwriters' obligations to
contribute pursuant to this Section 9 are several, and not joint, in proportion
to their respective underwriting commitments as set forth opposite their names
in SCHEDULE A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the
case may be, any one or more of the several Underwriters shall fail or refuse to
purchase Common Shares that it or they have agreed to purchase hereunder on such
date, and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate number of the Common Shares to be purchased
25
on such date, the other Underwriters shall be obligated, severally, in the
proportions that the number of Firm Common Shares set forth opposite their
respective names on SCHEDULE A bears to the aggregate number of Firm Common
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as may be specified by the Representatives with the
consent of the non-defaulting Underwriters, to purchase the Common Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, on the First Closing Date or the Second Closing Date,
as the case may be, any one or more of the Underwriters shall fail or refuse to
purchase Common Shares and the aggregate number of Common Shares with respect to
which such default occurs exceeds 10% of the aggregate number of Common Shares
to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Common Shares are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of
Section 4, Section 8 and Section 9 shall at all times be effective and shall
survive such termination. In any such case either the Representatives or the
Company shall have the right to postpone the First Closing Date or the Second
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed
to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date this Agreement may be terminated
by the Representatives by notice given to the Company if at any time (i) trading
or quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the Nasdaq Stock Market, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York, Delaware or California authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States' or
international political, financial or economic conditions, as in the reasonable
judgment of the Representatives is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the reasonable judgment of the Representatives may interfere materially with
the conduct of the business and operations of the Company regardless of whether
26
or not such loss shall have been insured. Any termination pursuant to this
Section 11 shall be without liability on the part of (a) the Company and PCR to
any Underwriter, except that the Company and PCR shall be obligated to reimburse
the expenses of the Representatives and the Underwriters pursuant to Section 4
hereof, (b) any Underwriter to the Company, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations,
warranties and other statements of the Company, of its officers, PCR and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, or PCR, as the case may be, and will
survive delivery of and payment for the Common Shares sold hereunder and any
termination of this Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxxxxxxx
with a copy to:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and:
Xxxxxxxx Ingersoll Professional Corporation
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxx, Esq.
27
If to the Company:
Xxxxxxx Select Integration Solutions, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxx
If to PCR:
Pomeroy Computer Resources, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxx, XX
with a copy to:
Cors & Xxxxxxx
000 Xxxx Xxxx Xxxx Xxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon
the parties hereto, including any substitute Underwriters pursuant to Section 10
hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and personal representatives, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
28
SECTION 16.
(a) GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE.
(b) CONSENT TO JURISDICTION. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America located
in the City and County of San Francisco or the courts of the State of
California in each case located in the City and County of San Francisco
(collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted
in regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth
above shall be effective service of process for any suit, action or
other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court
that any such suit, action or other proceeding brought in any such court
has been brought in an inconvenient forum.
(c) WAIVER OF IMMUNITY. With respect to any Related
Proceeding, each party irrevocably waives, to the fullest extent
permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which it
might otherwise be entitled in the Specified Courts, and with respect to
any Related Judgment, each party waives any such immunity in the
Specified Courts or any other court of competent jurisdiction, and will
not raise or claim or cause to be pleaded any such immunity at or in
respect of any such Related Proceeding or Related Judgment, including,
without limitation, any immunity pursuant to the United States Foreign
Sovereign Immunities Act of 1976, as amended.
SECTION 17. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition
29
is meant to benefit. The Section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
[The remainder of the page intentionally left blank.]
30
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
XXXXXXX SELECT INTEGRATION SOLUTIONS, INC.
By:
----------------------------------------
Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
XXXXXXX COMPUTER RESOURCES, INC.
By:
----------------------------------------
Xxxxx X. Xxxxxxx, XX
Title: President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California as of the date
first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
X. X. XXXXXXXX & CO., LLC
WHEAT FIRST UNION, A DIVISION OF WHEAT FIRST SECURITIES, INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
---------------------------------
Xxxxxxx X. Xxxxx,
Authorized Signatory
31
SCHEDULE A
NUMBER OF FIRM
COMMON SHARES TO BE
UNDERWRITERS PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC. . . . . . . . . [ ]
X X Xxxxxxxx & Co., LLC. . . . . . . . . . . . . . . . [ ]
Wheat First Union, a division of Wheat First
Securities, Inc. . . . . . . . . . . . . . . . . . . [ ]
[ ]. . . . . . . . . . . . . . . . . . . . . . . [ ]
[ ]. . . . . . . . . . . . . . . . . . . . . . . [ ]
Total . . . . . . . . . . . . . . . . . . . . . . [ ]
EXHIBIT A
OPINION OF COUNSEL TO THE COMPANY
Opinion of counsel for the Company to be delivered pursuant to
Section 5(d) of the Underwriting Agreement.
References to the Prospectus in this EXHIBIT A include any
supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the Commonwealth of Kentucky and in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions (other than the Commonwealth of Kentucky) where
the failure to so qualify or to be in good standing would not, individually or
in the aggregate, result in a Material Adverse Change.
(iv) The authorized, issued and outstanding capital stock of the
Company (including the Class A and Class B Common Stock) conform to the
descriptions thereof set forth in the Prospectus. All of the outstanding shares
of Class B Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable and, to the best of such counsel's knowledge, have been
issued in compliance with the registration and qualification requirements of
federal and state securities laws. The forms of certificate used to evidence
the Class A Common Stock and the Class B Common Stock are in due and proper form
and complies with all applicable requirements of the charter and by-laws of the
Company and the General Corporation Law of the State of Delaware. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(v) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase securities of the Company arising (i) by operation of the charter or
by-laws of the Company or the General Corporation Law of the State of Delaware
or (ii) to the best knowledge of such counsel, otherwise.
A-1
(vi) The Underwriting Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, each of the Company
and PCR, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(vii) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable. The shares of
Class A Common Stock to be issued upon conversion of the Class B Common Stock,
will be validly issued, fully paid and nonassessable.
(viii) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the best knowledge of such counsel, no stop order
suspending the effectiveness of either of the Registration Statement or the
Rule 462(b) Registration Statement, if any, has been issued under the Securities
Act and no proceedings for such purpose have been instituted or are pending or
are contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or supplement to the
Registration Statement and the Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or in exhibits to or excluded from the Registration Statement,
as to which no opinion need be rendered) comply as to form in all material
respects with the applicable requirements of the Securities Act.
(x) The Common Shares have been approved for quotation on the
Nasdaq National Market.
(xi) The statements (i) in the Prospectus under the captions
"Prospectus Summary -- Summary of Relationship with PCR," "Risk
Factors -- Potential Adverse Effect on Value and Liquidity of Class A Common
Stock from Disparate Voting Rights of Class A Common Stock and Class B Common
Stock," "Risk Factors -- Potential Conflicts of Interest," "Risk
Factors -- Control by PCR; Anti-Takeover Considerations", "Risk
Factors -- Shares Eligible for Future Sale", "Management's Discussion and
Analysis and Results of Operations--Liquidity and Capital Resources",
"Business -- Intellectual Property Rights", "Business -- Legal Proceedings",
"Certain Relationships and Related Transactions", "Shares Eligible for Future
Sale", "Management -- Employment Agreements", Management -- Compensation
Committee Interlocks and Insider Participation", Management -- Indemnification",
"Relationship with PCR",
A-2
"Description of Capital Stock" and "Underwriting" and (ii) in Item 14 and Item
15 of the Registration Statement, insofar as such statements constitute matters
of law, summaries of legal matters, the Company's charter or by-law provisions,
documents or legal proceedings, or legal conclusions, has been reviewed by such
counsel and fairly present and summarize, in all material respects, the matters
referred to therein.
(xii) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xiii) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.
(xiv) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xv) The execution and delivery of the Underwriting Agreement by the
Company and PCR and the performance by each of the Company and PCR of their
respective obligations thereunder (other than performance by the Company and PCR
of their obligations under the indemnification section of the Underwriting
Agreement, as to which no opinion need be rendered) (i) have been duly
authorized by all necessary corporate action on the part of the Company and PCR;
(ii) will not result in any violation of the provisions of the charter or
by-laws of the Company or PCR; (iii) will not constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or PCR pursuant to
(A) the Company's credit facility with Deutsche Financial Services Corporation,
as lender, and Star Bank, as participant, or (B) to the best knowledge of such
counsel, any other material Existing Instrument; or (iv) to the best knowledge
of such counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or PCR.
(xvi) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.
(xvii) To the best knowledge of such counsel, there are no persons
with registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement.
A-3
(xviii) To the best knowledge of such counsel, the Company is not in
violation of its charter or by-laws or any law, administrative regulation or
administrative or court decree applicable to the Company and is not in Default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each such
case for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
(xix) Each of the Contribution Agreement, Administrative Services and
Marketing Agreement, Space Sharing Agreement, [Tax Allocation Agreement], Stock
Registration Agreement and Indemnification Agreement, dated January 6, 1999 by
and between the Company and PCR, (i) has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, each of the parties
thereto, enforceable in accordance with its terms, (ii) will not result in any
violation of the charter or by-laws of the Company or PCR or the breach of, or
Default under, or result in the creation of any lien, charge or encumbrance upon
and property or assets of the Company or PCR pursuant to any Material Existing
Instrument or (iii) to the best knowledge of such counsel, will not result in
any violation of any law, administrative regulation or administrative court
decree applicable to the Company or PCR.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief as to
the financial statements or schedules or other financial or statistical data
derived therefrom, included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, or the federal law of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the First Closing Date or the Second Closing Date,
as the case may be, shall be satisfactory in form and substance to the
Underwriters,
A-4
shall expressly state that the Underwriters may rely on such opinion as if it
were addressed to them and shall be furnished to the Representative) of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters; PROVIDED, HOWEVER, that such
counsel shall further state that they believe that they and the Underwriters are
justified in relying upon such opinion of other counsel, and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible officers
of the Company and public officials.
A-5
EXHIBIT B
December _______, 1998
NationsBanc Xxxxxxxxxx Securities LLC
X.X. Xxxxxxxx & Co., LLC
Wheat First Union, a division of Wheat First Securities, Inc.
As Representatives of the Several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: XXXXXXX SELECT INTEGRATION SOLUTIONS, INC. (THE "COMPANY")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain
shares of Class A Common Stock or Class B Common Stock of the Company
(collectively, the "Common Stock") or securities convertible into or
exchangeable or exercisable for Class A Common Stock. The Company proposes to
carry out a public offering of Class A Common Stock (the "Offering") for which
you will act as the representatives of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you and the other underwriters are
relying on the representations and agreements of the undersigned contained in
this letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees
that the undersigned will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities LLC (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant any option
to sell (including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended, or otherwise dispose of
any shares of Common Stock, options or warrants to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into shares
of Common Stock currently or hereafter owned either of record or beneficially
(as defined in Rule 13d-3 under Securities Exchange Act of 1934, as amended) by
the undersigned, or publicly announce the undersigned's intention to do any of
the foregoing, for a period commencing on the date hereof and continuing through
the close of trading on the date 180 days after the date of the Prospectus
relating to the Offering. The undersigned also agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent and registrar
against the transfer of shares of Common Stock or
B-1
securities convertible into or exchangeable or exercisable for Common Stock held
by the undersigned except in compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of any
shares of Common Stock owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the
undersigned and the respective successors, heirs, personal representatives, and
assigns of the undersigned.
-----------------------------------------------
Printed Name of Holder
By:
-------------------------------------------
Signature
-----------------------------------------------
Printed Name of Person Signing
(AND INDICATE CAPACITY OF PERSON SIGNING IF
SIGNING AS CUSTODIAN, TRUSTEE, OR ON BEHALF
OF AN ENTITY)
B-2
