1,000,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
____________, 0000
X.X. Xxxxxxxxx & Company, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Ravenswood Winery, Inc., a California corporation (the "Company"),
proposes to issue and sell up to an aggregate of 1,000,000 shares of its
authorized but unissued common stock, no par value per share (the "Common
Stock"), (said 1,000,000 shares of Common Stock being herein called, the
"Underwritten Stock") to X.X. Xxxxxxxxx & Company, LLC (the "Underwriter") and
to grant the Underwriter an option to purchase up to an aggregate of 150,000
additional shares of Common Stock (the "Option Stock" and collectively with the
Underwritten Stock, the "Shares"). The Common Stock is more fully described in
the Registration Statement and the Prospectus hereinafter mentioned.
The Company hereby confirm the agreements made with respect to the
purchase of the Shares by the Underwriter.
1. Registration Statement. The Company has filed with the Securities
and Exchange Commission (the "Commission") a registration statement on Form SB-2
(No. 333-71729), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (the "Act") of the
Shares. Copies of such registration statement and of each amendment thereto, if
any, including the related preliminary prospectus (meeting the requirements of
Rule 430A of the rules and regulations of the Commission) heretofore filed by
the Company with the Commission have been delivered to you.
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(1) Plus an option to purchase from the Company up to an aggregate of 150,000
additional shares to cover over-allotments.
1.
The term "Registration Statement" as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Shares (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any rule 462(b) registration
statement). The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment so such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as so supplemented or amended. The term "Preliminary Prospectus"
as used in this agreement shall mean each preliminary prospectus included in
such registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Act.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Underwriter as follows:
(a) Neither the Commission nor any state securities commission
has issued any order preventing or suspending the use of any Preliminary
Prospectus or has instituted or threatened to institute any proceedings with
respect to such an order. The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date on which the
Option Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Act and the rules and regulations of the
Commission thereunder. On the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, and on the Effective Date the Prospectus did
not and, on the Closing Date and any later date on which the Option Stock is to
be purchased, will not contain any untrue statement of a material fact and did
not omit to state any material fact required to be stated therein, or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
2.
provided however, that none of the representations and warranties in this
subparagraph (a) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information herein or otherwise furnished in writing to the Company by or
on behalf of the Underwriter expressly for use in the Registration Statement or
Prospectus.
(b) The Company (i) is a duly incorporated and validly
existing corporation in good standing under the laws of its jurisdiction of
incorporation, having full power and authority, corporate and other, to own or
lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus; and (ii) is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
in which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company). The Company does not own any capital stock or other equity securities
in any entity.
(c) The Company has the duly authorized and validly
outstanding capitalization set forth under the caption "Capitalization" in the
Prospectus and will have the adjusted capitalization set forth therein on the
Closing Date, based on the assumptions set forth therein. The securities of the
Company conform to the descriptions thereof contained in the Prospectus. The
form of certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation. The outstanding shares of Common
Stock (other than the Shares) have been duly authorized and validly issued by
the Company and are fully paid and nonassessable. Except as created hereby or
referred to in the Prospectus, there are no outstanding options, warrants,
rights or other arrangements requiring the Company at any time to issue any
capital stock. No holders of outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other rights to subscribe for any of
the Shares, and neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives rise to
any rights, other than those which have been waived or satisfied, for or
relating to, the registration of any securities of the Company. The Shares are
duly and validly authorized, duly and validly issued, fully paid and
nonassesable and conform to the description thereof contained in the Prospectus.
No further approval or authority of the stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the Shares as
contemplated herein.
(d) The Company has full legal right, power and authority to
enter into this agreement and to consummate the transactions provided for
herein. This agreement has been duly authorized, executed and delivered by the
Company and, assuming it is a binding agreement of the Underwriter, constitutes
a legal, valid and binding agreement of
3.
the Company enforceable against the Company in accordance with its terms (except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of creditors' rights and the application of equitable
principles relating to the availability of remedies and except as rights to
indemnity or contribution may be limited by federal or state securities laws and
the public policy underlying such laws), and none of the Company's execution or
delivery of this agreement, its performance hereunder, its consummation of the
transactions contemplated herein, its application of the net proceeds of the
offering in the manner set forth under the caption "Use of Proceeds" or the
conduct of its business as described in the Prospectus, conflicts or will
conflict with or results or will result in any breach or violation of any of the
terms or provisions of, or constitutes or will constitute a default under,
causes or will cause (or permits or will permit) the maturation or acceleration
of any liability or obligation or the termination of any right under, or result
in the creation or imposition of any lien, charge, or encumbrance upon, any
property or assets of the Company pursuant to the terms of (i) the certificate
of incorporation or bylaws of the Company, (ii) any indenture, mortgage, deed of
trust, voting trust agreement, stockholders' agreement, note agreement or other
agreement or instrument to which the Company is a party or by which it is or may
be bound or to which its respective property is or may be subject or (iii) any
statute, judgment, decree, order, rule or regulation applicable to the Company
of any government, arbitrator, court, regulatory body or administrative agency
or other governmental agency or body, domestic or foreign, having jurisdiction
over the Company, or its activities or properties.
(e) The Common Stock is approved for quotation on The Nasdaq
National Market and, prior to the Closing Date, (i) the Common Stock shall be
listed and duly admitted to trading on The Nasdaq National Market and (ii) the
Shares will be authorized for inclusion in The Nasdaq National Market.
(f) The financial statements of the Company and the related
notes and schedules thereto included in the Registration Statement and the
Prospectus fairly present the financial position, results of operations,
stockholders' equity and cash flows of the Company at the dates and for the
periods specified therein. Such financial statements and the related notes and
schedules thereto have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair
presentation of results for such periods have been made; provided, however, that
the unaudited financial statements are subject to normal year-end audit
adjustments (which are not expected to be material) and do not contain all
footnotes required under generally accepted accounting principles. The summary
and selected financial and statistical data included in the Registration
Statement and the Prospectus present fairly the information shown thereon
4.
and such data have been prepared on a basis consistent with the financial
statements contained therein and in the books and records of the Company.
(g) Odenberg, Ullakko, Muranishi & Co., who have certified the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and the
rules and regulations promulgated thereunder.
(h) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (a) transactions are
executed in accordance with management's general or specific authorization; (b)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization; and (d) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(i) The Company has filed all necessary federal, state and
local income, franchise and other material tax returns and has paid all taxes
shown as due thereunder, and the Company has no tax deficiency that has been or,
to its knowledge, which might be assessed against the Company which, if so
assessed, would materially and adversely affect it business or properties. All
tax liabilities accrued through the date hereof have been adequately provided
for on the books of the Company.
(j) The Company maintains insurance underwritten by insurers
of recognized financial responsibility of the types and in amounts and with such
deductibles as is prudent and customary for companies in the same or similar
business, all of which insurance is in full force and effect.
(k) Except as disclosed in the Prospectus, there is no action,
suit, proceeding or investigation pending or threatened against the Company
before or by any court, regulatory body or administrative agency or any other
governmental agency or body, domestic or foreign, which (i) questions the
validity of the capital stock of the Company or this agreement or of any action
taken or to be taken by the Company pursuant to or in connection with this
agreement, (ii) is required to be disclosed in the Registration Statement which
is not so disclosed (and such proceedings, if any, as are summarized in the
Registration Statement are accurately summarized in all material respects), or
(iii) may have a material adverse affect upon the business operations, financial
conditions or income of the Company.
5.
(l) All executed agreements or copies of executed agreements
filed or incorporated by reference as exhibits to the Registration Statement to
which the Company is a party or by which it is or may be bound or to which its
assets, properties or businesses are or may be subject have been duly and
validly authorized, executed and delivered by the Company and constitute the
legal, valid and binding agreements of the Company enforceable by and against it
in accordance with their respective terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to enforcement of creditors' rights generally, and general
equitable principles relating to the availability of remedies, and except as
rights to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws). The descriptions in
the Registration Statement of contracts and other documents are accurate and
fairly present the information required to be shown with respect thereto by the
Act and the rules and regulations promulgated thereunder, and there are no
contracts or other documents which are required by the Act or the rules and
regulations promulgated thereunder to be described in the Registration Statement
or filed as exhibits to the Registration Statement which are not described or
filed as required and the exhibits which have been filed are complete and
correct copies of the documents of which they purport to be copies.
(m) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as expressly
contemplated therein, the Company has not incurred, other than in the ordinary
course of its business, any material liabilities or obligations, direct or
contingent, purchased any of its outstanding capital stock, paid or declared any
dividends or other distributions on its capital stock or entered into any
material transactions, and there has been no material change in capital stock or
debt or any material adverse change in the business, properties, assets, net
worth, condition (financial or other), or results of operations or prospects of
the Company whether or not arising from transactions in the ordinary course of
business.
(n) The Company is not, nor with the giving of notice or lapse
of time or both, will it be, in violation of or in default under, any term or
provision of (i) its Articles of Incorporation or Bylaws, (ii) any indenture,
mortgage, deed of trust, voting trust agreement, stockholders' agreement, note
agreement or other agreement or instrument to which it is a party or by which it
is or may be bound or to which any of its property is or may be subject, or any
indebtedness, the effect of which breach or default singly or in the aggregate
may have a material adverse effect on the Company's business, management,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects, or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company or of any arbitrator, court, regulatory body,
administrative agency or any other governmental agency or body, domestic or
foreign, having jurisdiction over the Company or its activities or properties
and the effect of which breach or default singly or in the aggregate
6.
may have a may have a material adverse effect on the Company's business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects.
(o) The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this agreement other
than as contemplated hereby.
(p) No labor disturbance by the employees of the Company
exists or is imminent.
(q) The Company owns, is licensed or otherwise possesses all
rights to use, all patents, patent rights, inventions, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names,
copyrights and other intellectual property rights (collectively, the "Rights")
necessary for the conduct of its business as described in the Prospectus. No
claims have been asserted against the Company by any person with respect to the
use of any such Rights or challenging or questioning the validity or
effectiveness of any such Rights. The continued use of the Rights in connection
with the Company's business and operations does not, to the Company's knowledge,
infringe on the rights of any person.
(r) The Company is conducting its business in compliance with
all applicable laws, ordinances or governmental rules or regulations of the
jurisdictions in which it is conducting business except where failure to be so
in compliance would not materially and adversely affect the business or
properties of the Company. Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the, "NASD") or may be necessary to
maintain the effectiveness of the Registration Statement and to qualify or
exempt the Shares for public offering by the Underwriter under state securities
or Blue Sky laws) has been obtained or made and is in full force and effect.
(s) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities under the Registration Statement, that have
not been waived with respect to the Registration Statement.
7.
(t) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the rules and regulations promulgated under
the Act) has taken or may take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock of the Company, to facilitate the sale or resale of the
Shares or otherwise.
(u) The Company is not, and after giving effect to the
issuance and sale of the Shares by the Company will not be an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
(v) The Company has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, encumbrances, security interests, claims, restrictions, equities,
claims and defects, except such as are described in the Registration Statement
and Prospectus, or such as are not materially significant or materially
important in relation to the business of the Company when taken in the
aggregate. The Company has valid and enforceable leases for the properties
described in the Prospectus as leased by it, free and clear of all liens,
encumbrances, security interests, claims, restrictions, equities, claims and
defects except are not material and do not interfere with the use made by the
Company thereof. The Company owns or leases all such properties as are necessary
to its operations as now conducted, and as proposed to be conducted as set forth
in the Registration Statement and the Prospectus and the properties and business
of the Company conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(w) The Company holds all franchises, licenses, permits,
approvals, certificates and other authorizations from federal, state and other
governmental or regulatory authorities necessary to the ownership, leasing and
operation of its properties or required for the present conduct of its business,
and such franchises, licenses, permits, approvals, certificates and other
governmental authorizations are in full force and effect and the Company is in
compliance therewith in all material respects except where the failure so to
obtain, maintain or comply with would not have a materially adverse effect on
the Company's business, financial condition or results of operations.
(x) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder (herein called ERISA); no "reportable event" (as defined in ERISA)
has occurred with respect to any "pension plan" (as defined in ERISA) for which
the Company would have any
8.
liability; the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "Pension Plan" for which the Company would
have liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(y) No relationship, direct or indirect, exists between or
among the Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, which is required to
be described in the Prospectus that is not so described.
(z) Neither the Company, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company, has
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provisions of
the Foreign Corrupt Practices Act of 1972; or made any bribe, rebate, payoff,
influence, payment, kickback or other unlawful payment.
(aa) The business, operations and facilities of the Company
have been and are being conducted or operated in compliance with all applicable
laws, ordinances, rules, regulations, licenses, permits, approvals, plans,
authorizations or requirements relating to occupational safety and health,
pollution, protection of health or the environment (including, without
limitation, those relating to emissions, discharges, release or threatened
releases of pollutants, contaminants or hazardous or toxic substances, materials
or wastes into ambient air, surface water, groundwater or land, or relating to
the manufacture, processing, distribution, use treatment, storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous or
liquid in nature) or otherwise relating to remediating real property in which
the Company has or has had any interest, whether owned or leased, of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state or political subdivision thereof and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments and
orders relating thereto, except for such failures to so comply as would not,
individually or in the aggregate, have a material adverse effect on the
Company's business, and the Company has not received any notice from a
governmental instrumentality or any third party alleging any violation thereof
or liability thereunder
9.
(including, without limitation, liability for costs of investigating or
remediating sites containing hazardous substances or damage to natural
resources).
(bb) Neither the Company nor any officer or employee of the
Company is a party to any contract or commitment that restricts in any material
respect the ability of the Company or such individual to engage in the Company's
business as described in the Registration Statement and the Prospectus.
3. Purchase of the Stock by the Underwriter.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company shall issue
and sell the Underwritten Stock to the Underwriter, and the Underwriter agrees
to purchase from the Company the Underwritten Stock. The price at which such
shares of Underwritten Stock shall be $__________ per share (the "Purchase
Price").
(b) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the Underwriter to purchase, the Option
Stock at the Purchase Price. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Stock by the Underwriter and may
be exercised in whole or in part at any time (but not more than once) on or
before the thirtieth day after the date of this agreement upon written or
telegraphic notice by the Underwriter to the Company setting forth the aggregate
number of shares of Option Stock as to which the Underwriter is exercising the
option. Delivery of the certificates for the shares of Option Stock, and payment
therefor shall be made as provided in Section 5 hereof.
4. Offering by the Underwriter.
(a) The terms of the initial public offering by the
Underwriter of the Shares to be purchased by them shall be as set forth in the
Prospectus. The Underwriter may from time to time change the public offering
price after the closing of the initial public offering and increase or decrease
the concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the
front cover page and under the caption "Plan of Distribution" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Shares filed by the Company (insofar as such information relates to the
Underwriter or related persons) constitutes the only information furnished by
the Underwriter to the Company for inclusion in the Registration Statement, and
Preliminary Prospectus, and the Prospectus and the
10.
Underwriter represents and warrants to the Company that the statements made
therein (insofar as they relate to the Underwriter or related persons) are
correct and do not omit any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5. Delivery of and Payment for the Shares.
(a) Delivery of certificates for the shares of the
Underwritten Stock and the Option Stock (if the option granted by Section 4(b)
hereof shall have been exercised not later than 7:00 A.M., San Francisco time,
on the date two business days preceding the Closing Date), and payment therefor,
shall be made at the office of Xxxxxxx, Xxxxx & Xxxxxx, LLP, on the third
business day after the date of this agreement, or at such time on such other
day, not later than seven full business days after such third business day, as
shall be agreed upon in writing by the Company and the Underwriter. The date and
hour of such delivery and payment are herein called the Closing Date.
(b) If the option granted by Section 4(b) hereof shall be
exercised after 7:00 A.M., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor shall be made at the office of Xxxxxxx, Xxxxx &
Xxxxxx, LLP at 7:00 A.M., San Francisco time, on the third business day after
the exercise of such Option.
(c) Payment for the Shares purchased from the Company shall be
made to the Company or its order by wire transfer or one or more certified or
official bank check or checks in same day funds. Such payment shall be made upon
delivery of certificates for the Shares to the Underwriter against receipt
therefor signed by the Underwriter. Certificates for the Shares to be delivered
to the Underwriter shall be registered in the name or names and shall be in such
denominations as the Underwriter may request at least one business day before
the Closing Date, in the case of Underwritten Stock, and at least one business
day prior to the purchase thereof, in the case of Option Stock. Such
certificates will be made available to the Underwriter for inspection, checking
and packaging of BHC Securities, Inc. on the business day prior to the Closing
Date or, in the case of Option Stock, by 12:00 P.M., San Francisco time on the
business day preceding the date of purchase.
6. Covenants of the Company. The Company covenants and agrees as
follows:
(a) The Company will (i) prepare and timely file with the
Commission under 424(b) a Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on Rule
430A and (ii) not file with
11.
the Commission any amendment to the Registration Statement or supplement to the
Prospectus (A) of which the Underwriter shall not previously have been advised
and furnished with a copy a reasonable period of time prior to the proposed
filing and as to which filing the Underwriter shall not have given their consent
or (B) which is not in compliance with the Act or the rules and regulations of
the Commission thereunder.
(b) As soon as the Company is advised or obtains knowledge
thereof, the Company will advise the Underwriter (i) of any request made by the
Commission for amendment of the Registration Statement, for supplement to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement, or
the institution or threat of any action, investigation or proceeding for that
purpose, or (iii) the receipt by the Company of any notification with respect to
the suspension of the qualification of the Shares for sale in any jurisdiction,
or the receipt by it of notice of the initiation or threatening of any
proceeding for that purpose. The Company will use its best efforts to prevent
the issuance of any such order and, if issued, to obtain the lifting or
withdrawal thereof as soon as possible.
(c) The Company will (i) on or before the Closing Date,
deliver to the Underwriter a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
delivered to the Underwriter), (ii) as promptly as possible deliver to the
Underwriter, at such office as the Underwriter may designate, as many copies of
the Prospectus as the Underwriter may reasonably request, and (iii) thereafter
from time to time during the period in which a prospectus is required by law to
be delivered by an Underwriter or dealer, likewise send to the Underwriters as
many additional copies of the Prospectus and as many copies of any supplement to
the Prospectus and of any amended prospectus, filed by the Company with the
Commission, as the Underwriter may reasonably request for the purposes
contemplated by the Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by the Underwriter or dealer any event relating
to or affecting the Company, or of which the Company shall be advised by in
writing by the Underwriter, shall occur as a result of which it is necessary, in
the opinion of counsel for the Company or of counsel for the Underwriter, to
supplement or amend the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser of the Shares, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended prospectus
so that the Prospectus as so supplemented or amended will not contain any untrue
statement of a
12.
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the initial
public offering of the Shares by the Underwriter and during such period, the
Underwriter shall propose to vary the terms of the offering thereof by reason of
changes in general market conditions or otherwise, the Underwriter will advise
the Company in writing of the proposed variation, and, if in the opinion either
of counsel for the Company or of counsel for the Underwriter such proposed
variation requires that the Prospectus be supplemented or amended, the Company
will forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The Company
authorizes the Underwriter and all dealers to whom any of the Shares may be sold
by the Underwriter to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Shares in accordance with the
applicable provisions of the Act and the applicable rules and regulations
thereunder for such period.
(e) Prior to the filing thereof with the Commission, the
Company will submit to the Underwriter, for its information, a copy of any
post-effective amendment to the Registration Statement and any supplement to the
Prospectus or any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by the
Underwriter, in the qualification of the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Underwriter may
designate and, during the period in which a prospectus is required by law to be
delivered by the Underwriter or a dealer, in keeping such qualifications in good
standing under said securities or blue sky laws; provided, however, that the
Company shall not be required to qualify as a foreign corporation or file any
general consent to service of process in any jurisdiction in which it is not so
qualified. The Company will from time to time, prepare and file such statements,
reports, and other documents as are or may be required to continue such
qualifications in effect for so long a period as the Underwriter may reasonably
request for distribution of the Shares.
(g) The Company agrees to pay all costs and expenses incident
to the performance of the obligations of the Company under this agreement,
including, without limitation, all costs and expenses incident to (i) the
preparation, printing and filing with the Commission and the NASD of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriter of copies of any Preliminary Prospectus and of the
several documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this agreement and related documents delivered
to the Underwriter, (iv) the preparation, printing and filing of all supplements
and amendments to the prospectus referred to in paragraph (d) of this Section 6,
(v) the furnishing to you of
13.
the reports and information referred to in paragraph (j) of this Section 6, and
(vi) the printing and issuance of stock certificates, including the transfer
agent's fees.
(h) The Company agrees to reimburse you for blue sky fees and
related disbursements (including counsel fees and disbursements and cost of
printing memoranda for the Underwriter) paid by or for the account of the
Underwriter or their counsel in qualifying the Shares under state securities or
blue sky laws and in the review of the offering by the NASD.
(i) As soon as practicable, but in any event not later than 45
days after the end of the first fiscal quarter first occurring after the first
anniversary of the Effective Date, the Company will make generally available to
its security holders, in the manner specified in Rule 158(b) of the rules and
regulations promulgated under the Act, and to the Underwriter, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Act and Rule 158(a) of the rules
and regulations promulgated thereunder.
(j) During a period of five years after the date hereof, the
Company will furnish to the Underwriter copies of all periodic and special
reports furnished to stockholders of the Company and of all information,
documents and reports filed with the Commission.
(k) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(l) The Company will not, directly or indirectly, without the
prior written consent of the Underwriter, issue, offer, sell, grant any option
to purchase or otherwise dispose (or announce any issuance, offer, sale, grant
of any option to purchase or other disposition) of any shares of Common Stock or
any securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof, except pursuant to
this agreement and except for issuances pursuant to the exercise of stock
options outstanding on or granted subsequent to the date hereof, pursuant to a
stock option or other employee benefit plan in existence on the date hereof and
except as contemplated by the Prospectus.
(m) The Company will cause the Shares to be duly included for
quotation on the Nasdaq National Market prior to the Closing Date.
(n) Neither the Company nor any of its officers or directors,
nor affiliates of any of them (within the meaning of the rules and regulations)
will take,
14.
directly or indirectly, any action designed to, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any securities of the Company.
(o) The Company will apply the net proceeds of the offering
received by it in the manner set forth under the caption "Use of Proceeds" in
the Prospectus.
(p) The Company will timely file all such reports, forms or
other documents as may be required from time to time, under the Act, the rules
and regulations promulgated thereunder, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder, and all such reports, forms and documents filed will comply as to
form and substance with the applicable requirements under the Act, the rules and
regulations promulgated thereunder, the Exchange Act and the rules and
regulations promulgated thereunder.
(q) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will in the
future conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a "company" controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
7. Conditions of the Underwriter's Obligations. The obligations
of the Underwriter under this agreement are subject to the performance by the
Company on and as of the Closing Date of its covenants and agreements hereunder,
and the following additional conditions:
(a) The Registration Statement shall have become effective,
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued, and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the Underwriter,
shall be contemplated by the Commission.
(b) The Underwriter shall be satisfied that (i) as of the
Effective Date, the statements made in the Registration Statement and the
Prospectus were true and correct and neither the Registration Statement nor the
Prospectus omitted to state a fact required to be stated therein or is necessary
to make the statements therein not misleading, (ii) since the Effective Date, no
event has occurred which should have been set forth in a supplement or amendment
to the Prospectus which has not been set forth in an effective supplement or
amendment, (iii) since the respective dates as of which information is given in
the Registration Statement in the form in which it originally
15.
became effective and the Prospectus contained therein, there has not been any
material adverse change or any development involving a prospective material
adverse change in or affecting the business, properties, financial condition or
results of operations of the Company, whether or not arising from transactions
in the ordinary course of business, and since such dates, except in the ordinary
course of business, the Company has not entered into any material transaction
not referred to in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, (iv) the Company does not
have any material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not pending or known
threatened legal proceedings to which the Company is a party or of which
property of the Company is subject which are material and which are not
disclosed in the Registration Statement and the Prospectus, (vi) there are not
any franchises, contracts, leases or other documents which are required to be
filed as exhibits to the Registration Statement which have not been filed as
required, and (vii) the representations and warranties of the Company herein are
true and correct in all material respects as of the Closing Date or any later
date on which Option Stock is to be purchased, as the case may be.
(c) On or prior to the Closing Date, the legality and
sufficiency of the sale of the Shares hereunder and the validity and form of the
certificates representing the Shares, all corporate proceedings and other legal
matters incident to the foregoing, and the form of the Registration Statement
and of the Prospectus (except as to the financial statements contained therein),
shall have been approved at or prior to the Closing Date by Xxxxxx Godward LLP,
counsel for the Underwriter. The Underwriter shall have received from counsel to
the Underwriter, such opinion or opinions with respect to the issuance and sale
of the Shares, the Registration Statement and the Prospectus and such other
related matters as the Underwriter reasonably may request and such counsel shall
have received such documents and other information as they request to enable
them to pass upon such matters.
(d) On the Closing Date, and if Option Stock is purchased at
any date after the Closing Date, on such later date, the Underwriter shall have
received an opinion addressed to the Underwriter, dated the Closing Date or, if
related to the later sale of Option Stock, such later date, of Xxxxxxx Xxxxx &
Xxxxxx LLP, counsel to the Company ("Company Counsel"), to the effect set forth
below:
(i) The Company is a duly incorporated and validly
existing corporation in good standing under the laws of its
jurisdiction of incorporation with full power and authority (corporate
and other) to own or lease its properties and to conduct its business
as described in the Registration Statement, and is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or leasing of property or the
conduct of its
16.
business requires such qualification (except for those jurisdictions in
which the failure so to qualify would not have a material adverse
effect on the Company);
(ii) Upon the closing of the sale of the Underwritten
Stock, the authorized capital stock of the Company consists of
1,000,000 shares of Preferred Stock, no par value, of which there are
no outstanding shares, and 20,000,000 shares of Common Stock, no par
value, of which there are outstanding ________ shares (including the
Underwritten Stock and any shares of Option Stock issued on the date
hereof). The securities of the Company conform in all material respects
to the description thereof contained in the Prospectus. Proper
corporate proceedings have been validly taken to authorize the
Company's authorized capital stock and all outstanding shares of such
capital stock (including the Underwritten Stock and the shares of
Option Stock issued, if any) have been duly authorized and validly
issued by the Company, are fully paid and nonassessable and have been
issued in compliance with all federal and state securities laws. Any
Option Stock purchased after the Closing Date, when issued and
delivered to and paid for by the Underwriter as provided in the
Underwriting Agreement, will have been duly and validly issued and be
fully paid and nonassesable. No preemptive rights, rights of first
refusal or other rights exist with respect to the Shares, or the issue
and sale thereof, pursuant to the Company's Articles of Incorporation
or Bylaws and, there are no contractual preemptive rights that have not
been waived, right of first refusal or rights of co-sale which exist
with respect to the Shares.
(iii) To the best of such counsel's knowledge, there
are no rights of any holders of the Company's securities, not
effectively satisfied or waived, to require registration under the Act
of any of the Company's securities or other securities of the Company
in connection with the filing of the Registration Statement or with the
offer or sale of the Shares;
(iv) The Company has full legal right, power, and
authority to enter into the Underwriting Agreement and to consummate
the transactions provided for therein. The Underwriting Agreement has
been duly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws now or hereafter in effect relating to or affecting creditors'
rights generally or by general principles of equity relating to the
availability of remedies and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the
public policy underlying such laws.
17.
(v) None of the Company's execution or delivery of
the Underwriting Agreement, its performance thereof, its consummation
of the transactions contemplated therein or its application of the net
proceeds of the offering in the manner set forth under the caption "Use
of Proceeds," conflicts or will conflict with or results or will result
in any breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon, any property or assets of the
Company pursuant to the terms of the Articles of Incorporation or
Bylaws of the Company; the terms of any indenture, mortgage, deed of
trust, voting trust agreement, stockholder's agreement, note agreement
or other agreement or instrument known to such counsel after reasonable
investigation to which the Company is a party or by which it is or may
be bound or to which its properties may be subject; any statute, rule
or regulation of any regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its activities or properties; or any
judgment, decree or order, known to such counsel after reasonable
investigation, of any government, arbitrator, court, regulatory body or
administrative agency or other governmental agency or body, domestic or
foreign, having such jurisdiction;
(vi) No consent, approval, authorization or order of
any court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, has been or is
required for the consummation of the transactions contemplated in the
Underwriting Agreement, except such as have been obtained under the Act
or may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriter;
(vii) To the best of such counsel's knowledge, the
conduct of the business of the Company is not in violation of any
federal, state or local statute, administrative regulation or other
law, which violation is likely to have a material adverse effect on the
Company; and the Company has obtained all licenses, permits,
franchises, certificates and other authorizations from state, federal
and other regulatory authorities as are necessary or required for the
ownership, leasing and operation of its properties and the conduct of
its business as presently conducted and as contemplated in the
Prospectus;
(viii) The Registration Statement is effective under
the Act; any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted
18.
or are pending or, to the best knowledge of such counsel, are
threatened or contemplated by the Commission;
(ix) The Registration Statement and the Prospectus
(except for the financial statements, schedules and other financial
data included therein, as to which such counsel need not express any
opinion), complied as to form in all material respects with the
requirements of the Act and the rules and regulations of the Commission
thereunder;
(x) The descriptions contained and summarized in the
Registration Statement and the Prospectus of franchises, contracts,
leases, documents, or any threatened legal or governmental actions,
suits or proceedings, are accurate and fairly represent in all material
respects the information required to be shown by the Act and the rules
and regulations of the Commission thereunder. To the best knowledge of
such counsel, there are no franchises, contracts, leases, documents, or
any threatened legal or governmental actions, suits or proceedings,
which are required by the Act and the rules and regulations of the
Commission thereunder to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required;
(xi) The statements (1) in the Prospectus under the
captions "Risk Factors - ___________, ___________, __________ and
___________," "Business ___________, __________ and ___________,"
"Management - ___________, __________ and ___________," "Certain
Transactions," "Description of Capital Stock" and "Shares Eligible for
Future Sale" and (2) in the Registration Statement in Items 24 and 26
in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present the information required under the Act and the rules and
regulations promulgated thereunder (the "Act and Rules") with respect
to such legal matters, documents and proceedings and fairly summarize
the matters referred to therein to the extent required by the Act and
Rules;
(xii) Good and marketable title to the Shares sold
under the Underwriting Agreement, free and clear of all liens,
encumbrances, equities, security interests and claims, has been
transferred to the Underwriter, assuming for the purpose of this
opinion that the Underwriter purchased the same in good faith without
notice of any liens, encumbrances, equities, security interests or
adverse claims;
19.
(xiii) The Shares have been duly authorized for
inclusion in The Nasdaq National Market upon official notice of
issuance;
In addition, such counsel shall state that in the course of the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and representatives of the Company and
with the Company's independent public accountants, at which conferences such
counsel made inquiries of such officers, representatives and accountants and
discussed the contents of the Registration Statement and the Prospectus and
(without taking any further action to verify independently the statements made
in the Registration Statement and the Prospectus and, except as stated in the
foregoing opinion, without assuming responsibility for the accuracy,
completeness or fairness of such statements) nothing has come to such counsel's
attention that causes such counsel to believe that either the Registration
Statement as of the date it is declared effective and as of the Closing Date or
the Prospectus as of the date thereof and as of the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (it being understood that such counsel need not express
any opinion with respect to the financial statements, schedules and other
financial data included in the Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials. References to the Registration
Statement and the Prospectus in this paragraph (d) shall include any amendment
or supplement thereto at the date of such opinion.
(e) The Underwriter shall have received from Odenberg,
Ullakko, Muranishi & Co., a letter or letters, addressed to the Underwriters and
dated the Closing Date and any later date on which Option Stock is purchased,
confirming that they are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations thereunder and based upon the procedures described in their letter
delivered to the Underwriter concurrently with the execution of this Agreement
(the "Original Letter"), but carried out to a date not more than three business
days prior to the Closing Date or such later date on which Option Stock is
purchased (i) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing Date
or such later date, as the case may be, and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the Original Letter
which are necessary to reflect any changes in the facts described in the
Original Letter signed the date of the Original Letter or to reflect the
availability of more recent financial statements, data or information. The
letters shall not disclose any change, or any development involving a
prospective change, in or
20.
affecting the business or properties of the Company, which in the Underwriter's
sole judgment, makes it impractical or inadvisable to proceed with the public
offering of the Shares or the purchase of the Option Stock as contemplated by
the Prospectus.
(f) The Underwriter shall have received from Odenberg,
Ullakko, Muranishi & Co., a letter stating that their review of the Company's
internal accounting controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's financial
statements as at June 30, 1998, did not disclose any weakness in internal
controls that they considered to be material weaknesses.
(g) On the Closing Date, and on any later date on which Option
Stock is purchased, the Underwriter shall have received a certificate, dated the
Closing Date or such later date, as the case may be, signed by the Chief
Executive Officer and Chief Financial Officer of the Company stating that the
respective signers of said certificate have carefully examined the Registration
Statement in the form in which it originally became effective and the Prospectus
contained therein and any amendments or supplements thereto and this Agreement,
and that the statements included in clauses (i) through (ix) of paragraph (b) of
this Section 7 are true and correct.
(h) The Underwriter shall have been furnished evidence in
usual written or telegraphic form from the appropriate authorities of the
several jurisdictions, or other evidence satisfactory to the Underwriter, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Shares shall have been duly
authorized for inclusion on the Nasdaq National Market upon official notice of
issuance.
In case any of the conditions specified in this Section 8 shall not be
fulfilled, this agreement may be terminated by the Underwriter by giving notice
to the Company. Any such termination shall be without liability of the Company
to the Underwriter and without liability of the Underwriter to the Company;
provided, however, that (i) in the event of such termination, the Company agree
to indemnify and hold harmless the Underwriter from all costs or expenses
incident to the performance of the obligations of the Company under this
agreement, including all costs and expenses referred to in paragraphs (g) and
(h) of Section 6 hereof, and (ii) if this agreement is terminated by the
Underwriter because of any refusal, inability or failure on the part of the
Company to perform any agreement herein, to fulfill any of the conditions
herein, or to comply with any provision hereof other than by reason of a default
by the Underwriter, the Company will reimburse the Underwriter severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
21.
8. Conditions of the Obligations of the Company.
(a) The obligations of the Company to deliver the Shares shall
be subject to the conditions that (i) the Registration Statement shall have
become effective and (ii) no stop order suspending the effectiveness thereof
shall be in effect and no proceedings therefor shall be pending or threatened by
the Commission.
(b) In case either of the conditions specified in paragraph
(a) of this Section 10 shall not be fulfilled, this agreement may be terminated
by the Company by giving notice to the Underwriter. Any such termination shall
be without liability of the Company to the Underwriter and without liability of
the Underwriter to the Company; provided however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Company from
all costs or expenses incident to the performance of the obligations of the
Company under this agreement, including all costs and expenses referred to in
paragraphs (g) and (h) of Section 6 hereof.
9. Indemnification and Contribution.
(a) Subject to the provisions of paragraph (d) of this Section
9, the Company agrees to indemnify and hold harmless the Underwriter (and any
person participating in the distribution who is deemed to be an underwriter (as
defined in Section 2(11) of the Act) and each person (including each member or
officer thereof), if any, who controls the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages or liabilities, joint or several (and actions in
respect thereof), to which the Underwriter or such persons may become subject,
under the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, and the Company agree to reimburse the
Underwriter and such persons for any legal or other expenses (including, except
as otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages, or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or 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, or
(ii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus as amended or as
supplemented if the Company shall have filed with the
22.
Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstance under
which they were made, not misleading; provided, however, that (i) the indemnity
agreement of the Company contained in this paragraph (a) shall not apply to any
such loss, claim, damage, liability or action if such statement or omission was
made in reliance upon and in conformity with information furnished as herein
stated or otherwise furnished in writing to the Company by the Underwriter
expressly for use in any Preliminary Prospectus or the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto, and (ii)
that the indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriter (or
such persons) if the person asserting any such loss, claim, damage, liability or
action purchased Shares which are the subject thereof to the extent that any
such loss, claim, damage, liability or action (A) results from the fact that
such Underwriter failed to send or give a copy of the Prospectus (as amended or
supplemented) to such person at or prior to the confirmation of the sale of such
Shares to such person in any case where such delivery is required by the Act and
(B) arises out of or is based upon an untrue statement or omission of a material
fact contained in such Preliminary Prospectus that was corrected in the
Prospectus (as amended and supplemented), unless such failure resulted from
non-compliance by the Company with paragraph (c) of Section 6 hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery and payment for the Shares. The indemnity agreement in this
paragraph (a) shall be in addition to any liability which the Company may have
at common law or otherwise.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
and all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject, under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise and to reimburse each of them for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement
(including the Prospectus as part thereof and any
23.
Rule 462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or 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, or (ii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstance under which they were made, not misleading, in each
case to the extent, but only to the extent, that such statement or omission was
made in reliance upon and in conformity with information furnished as herein
stated or otherwise furnished in writing by the Underwriter to the Company
expressly for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto, and will reimburse, as incurred, all
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. The indemnity agreement of the
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery and payment for the Shares. The
indemnity agreement contained in this subsection (b) shall be in addition to any
liability which the Underwriter may have at common law or otherwise.
(c) Each party indemnified under the provisions of paragraph
(a) or (b) of this Section 9 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, such indemnified party will promptly notify any party or parties
from whom indemnification may be sought hereunder of the commencement thereof in
writing. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give such notice if the party to whom such
notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which such notice would have related and was prejudiced by the
failure to give the notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party or parties against which a claim is
to be made will be entitled, at its own expense, to participate in the defense
of such action, suit, investigation or inquiry of, an indemnified party. Any
indemnifying party shall be entitled, if it so elects within a reasonable time
after receipt of notice from the indemnified party or parties of an action,
suit, investigation or inquiry to which indemnity
24.
may be sought, to assume the entire defense thereof (alone or in conjunction
with any other indemnifying party or parties), at its own expense, in which case
such defense shall be conducted by counsel reasonably satisfactory to the
indemnified party or parties; provided however, that (i) if the indemnified
party or parties has reasonably concluded that there may be a conflict between
the positions of the indemnifying party or parties and of the indemnified party
or parties in conducting the defense of such action, suit, investigation,
inquiry or proceeding or that there may be legal defenses available to such
indemnified party or parties different from or in addition to those available to
the indemnifying party or parties, then counsel for the indemnified party or
parties shall be entitled to conduct such defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties and (ii) in any event, the indemnified party or
parties shall be entitled to have counsel chosen by such indemnified party or
parties participate in, but not conduct, the defense. Upon receipt of notice
from the indemnifying party to such indemnified party of its 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 9 for any legal or other expenses (other than the reasonable
costs of investigation) subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party has
employed such counsel in connection with the assumption of different or
additional legal defenses in accordance with the proviso to the immediately
preceding sentence, or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. If no such notice to assume the defense of such action has
been given within a reasonable time of the indemnified party's or parties'
notice to such indemnifying party or parties, the indemnifying party or parties
shall be responsible for any legal or other expenses incurred by the indemnified
party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) above in respect of any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
referred to in paragraphs (a) and (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each of the contributing
parties, on the one hand, and the party to be indemnified, on the other hand in
connection with the statements or omissions that resulted in such losses,
claims,
25.
damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriter, on the other, shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares (before deducting expenses)
and the total underwriting discount received by the Underwriter, in each case as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Shares. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriter, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable consideration referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this paragraph (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph (d), the Underwriter
shall not be required to contribute any amount in excess of the underwriting
discount applicable to the Shares purchased by the Underwriter hereunder. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect to which a claim for contribution may be made against another
party or parties under this paragraph (d), it will promptly notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any other obligation it may have hereunder or otherwise
(except as specifically provided in paragraph (c) of this Section 10). The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may have at common law or otherwise.
(e) The Company will not, without the prior written consent of
the Underwriter, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement,
26.
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
10. Reimbursement of Certain Expenses. In addition to their other
obligations under Section 9 of this agreement, the Company hereby agrees to
reimburse on quarterly basis the Underwriter for all reasonable legal and other
expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 9 of this agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 10 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent that any such payment
is ultimately held to be improper, the Underwriter shall promptly refund it and
(ii) the Underwriter shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
11. Representations, etc. to Survive Delivery. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, and the Underwriter,
respectively, 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
the Underwriter, and will survive delivery of and payment for the Shares. Any
successors to the Underwriter shall be entitled to the indemnity, contribution
and reimbursement agreements contained in this agreement.
12. Termination.
(a) This agreement (except for the provisions of Section 9
hereof) may be terminated by the Underwriter by notice to the Company prior to
the Closing Date if: (i) the Company shall have sustained a loss by strike,
fire, flood, accident or other calamity of such a character as to interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss was insured; (ii) trading in the Common
Stock shall have been suspended or trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
shall have been suspended or limitations on such trading shall have been imposed
or limitations on prices shall have been established on any such exchange or
market system; (iii) the engagement in hostilities or an escalation of major
hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof shall have occurred;
(iv) any outbreak of hostilities or other national or international calamity or
crisis or change in economic or political conditions shall have occurred if the
effect of such outbreak, calamity, crisis or change in economic or political
27.
conditions in the financial markets of the United States would, in the
Underwriter's reasonable judgment, make the offering or delivery of the Shares
impracticable; (v) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of, or commencement of
any proceeding or investigation by, any court, legislative body, agency or other
governmental authority shall have occurred which in the Underwriter's reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company; (vi) a banking moratorium shall have
been declared by New York or United States authorities; (vii) the taking of any
action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs shall have occurred which in the Underwriter's
reasonable judgment has a material adverse effect on the securities markets in
the United States.
(b) If this agreement is terminated pursuant to this Section
12, there shall be no liability of the Company to the Underwriter and no
liability of the Underwriter to the Company; provided, however, that in the
event of any such termination, the Company agrees to indemnify and hold harmless
the Underwriter from all costs or expenses incident to the performance of the
obligations of the Company under this agreement, including all costs and
expenses referred to in paragraphs (g) and (h) of Section 6. Notwithstanding any
termination of this agreement, the provisions of Section 9 hereof shall survive
and remain in full force and effect.
13. Notices. All communications hereunder shall be in writing and if
sent to the Underwriter shall be mailed or delivered or telegraphed and
confirmed by letter or telecopied and confirmed by letter to X.X. Xxxxxxxxx &
Company, LLC at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 or, if
sent to the Company, shall be mailed or delivered or telegraphed and confirmed
to the Company at 00000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx, 00000, Attention:
Chief Executive Officer.
14. Successors. This agreement shall incur to the benefit of and be
binding upon the Company and the Underwriter and, with respect to the provisions
of Section 9 hereof, the several parties (in addition to the Company and the
Underwriter) indemnified under the provisions of said Section 9, and their
respective personal representatives successors and assigns. Nothing in this
agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this agreement, or
any provisions herein contained. The term "successors and assigns" as herein
used shall not include any purchaser, as such purchaser, of any of the Shares
from the Underwriter.
15. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
28.
If the foregoing correctly sets forth our understanding, please
indicate the Placement Agent's acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
RAVENSWOOD WINERY, INC.
By:
------------------------------
X. Xxxx Xxxxxx
Chief Executive Officer
Accepted as of the date
first above written:
X.X. XXXXXXXXX & COMPANY, LLC
By:
---------------------------------
Title:
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29.
