CONFORMED COPY
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COMPUCOM SYSTEMS, INC.
COMMON STOCK
_________________
UNDERWRITING AGREEMENT
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October 25, 1995
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
XXXXXXXXX & XXXXX LLC
As representatives of the several
Underwriters named in Schedule II hereto
c/o The Xxxxxxxx-Xxxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
The shareholders of CompuCom Systems, Inc., a Delaware corporation (the
"Company"), listed on Schedule I hereto (the "Selling Shareholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
named in Schedule II hereto (the "Underwriters") an aggregate of 4,200,000
shares of common stock, par value $.01 per share ("Common Stock"), of the
Company (the "Firm Shares"), and certain of such Selling Shareholders propose,
at the election of the Underwriters, subject to the terms and conditions stated
herein, to sell to the Underwriters up to 630,000 additional shares of Common
Stock (the "Optional Shares") (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof are collectively
called the "Shares").
1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and
warrants to, and agrees with, each of the Underwriters and each of the Selling
Stockholders that:
(1) A registration statement on Form S-3 (File No. 33-78746) with respect
to the Shares, including a prospectus subject to completion, has been filed by
the Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), and one or more amendments
to such registration statement, including post-Effective Amendment No. 1, may
have been so filed. After the execution of this Agreement, the Company will
file with the Commission either (i) if such registration statement, as it may
have been amended, has become effective under the Act and information has been
omitted therefrom in accordance with Rule 430A under the Act, either (A) if the
Company relies on Rule 434 under the Act, a term sheet relating to the Shares
that shall identify the preliminary prospectus that it supplements, containing
such information as is required or permitted by Rules 434, 430A and 424(b) under
the Act or (B) if the Company does not rely on Rule
434 under the Act, a prospectus in the form most recently included in an
amendment to such registration statement with such changes or insertions as are
required by Rule 430A or permitted by Rule 424(b) under the Act and as have been
provided to and approved by the Representatives, or (ii) if such registration
statement, as it may have been amended, has not become effective under the Act,
an amendment to such registration statement, including a form of prospectus, a
copy of which amendment has been provided to and approved by the Representatives
prior to the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under the Act
for the purpose of registering certain additional shares of Common Stock, which
registration statement will be effective upon filing with the Commission. As
used in this Agreement, the term "Registration Statement" means the registration
statement, as amended by Post-Effective Amendment No. 1 and as it may be further
amended through the time when Post-Effective Amendment No. 1, or any other
subsequently filed post-effective amendment was or is declared effective,
including all financial statement schedules and exhibits thereto, documents
incorporated by reference in the prospectus included in the registration
statement at the time such Post-Effective Amendment No. 1, or any other
subsequently filed post-effective amendment became effective and any information
omitted therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as hereinafter defined); the term "Preliminary Prospectus" means
each prospectus subject to completion included in Post-Effective Amendment No.
1, or any other subsequently filed post-effective amendment thereto (including
the prospectus subject to completion, if any, included in the Registration
Statement at the time Post-Effective Amendment No. 1, or any other subsequently
filed post-effective amendment was or is declared effective) and all documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of each such Preliminary Prospectus; the term "Prospectus" means
(A) if the Company relies on Rule 434 of the Act, the Term Sheet (as hereinafter
defined) relating to the Shares that is first filed pursuant to Rule 424(b)(7)
of the Act, together with the Preliminary Prospectus identified therein that
such Term Sheet supplements, (B) if the Company does not rely on Rule 434 of the
Act, the prospectus relating to the Shares first filed with the Commission
pursuant to Rule 424(b) under the Act, or (C) if no prospectus is required to be
so filed, such term means the prospectus included in the Registration Statement,
in each case including all documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act, as of the date of the Prospectus; the term
"462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such registration statement becomes effective); and the term "Term
Sheet" means any term sheet that satisfies the requirements of Rule 434 of the
Act. Any reference to the "date" of a Prospectus that includes a Term Sheet
shall mean the date of
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such Term Sheet. For purposes of the following representations and warranties,
to the extent reference is made to the Prospectus and at the relevant time the
Prospectus is not yet in existence, such reference shall be deemed to be to the
most recent Preliminary Prospectus.
(2) No order preventing or suspending the use of any Preliminary Prospectus
has been issued and no proceeding for that purpose has been instituted or
threatened by the Commission or the securities authority of any state or other
jurisdiction. If the Registration Statement or any 462(b) Registration
Statement, respectively, has become effective under the Act, no stop order
suspending the effectiveness of the Registration Statement or any 462(b)
Registration Statement, respectively, or any part thereof has been issued and no
proceeding for that purpose has been instituted or threatened or, to the best
knowledge of the Company, contemplated by the Commission or the securities
authority of any state or other jurisdiction.
(3) When any Preliminary Prospectus was filed with the Commission it (i)
contained all statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
462(b) Registration Statement, respectively, or any amendment thereto was or is
declared effective, and at each Time of Delivery (as hereinafter defined), it
(i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When (A) the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared effective) or (B)
any Term Sheet that is a part of the Prospectus filed with the Commission
pursuant to Rule 434, and at each Time of Delivery, the Prospectus, as amended
or supplemented at any such time, (i) contained or will contain all statements
required to be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (3) do
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not apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto, the Prospectus or any amendment
or supplement thereto, any Term Sheet or any 462(b) Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you specifically for use therein.
(4) The documents incorporated by reference in the Prospectus when they
were filed with the Commission conformed in all material respects to the
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the
rules and regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and any further document so filed and incorporated by reference
in the Prospectus, as amended or supplemented, when such documents are filed
with the Commission, will conform in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder,
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein.
(5) The descriptions in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings or contracts and other documents
are accurate and fairly present the information required to be shown; and there
are no statutes or legal or governmental proceedings required to be described in
the Registration Statement or the Prospectus that are not described as required
and no contracts or documents of a character that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described and filed as required.
(6) The following corporations are (except as noted) wholly-owned direct
subsidiaries of the Company and constitute the only subsidiaries of the Company
that are active and are material to the Company's business and operations as
disclosed in the Prospectus: The Computer Factory Inc., a New York corporation;
ClientLink, Inc., a Delaware corporation (approximately 77% owned by the
Company); International Micronet Systems, Inc., a California corporation; and
CompuCom Properties, Inc., a Delaware corporation (as used herein, the term
"subsidiaries" shall refer only to the foregoing corporations). Each of the
Company and its subsidiaries has been duly incorporated, is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation and has full power and authority (corporate and other) to own or
lease its properties and conduct its business as described in the
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Prospectus. The Company has full power and authority (corporate and other) to
enter into this Agreement and to perform its obligations hereunder. Each of the
Company and its subsidiaries is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as to require
such qualification, except where the failure to so qualify would not have a
material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries, taken as a whole.
(7) The Company's authorized, issued and outstanding capital stock is as
disclosed in the Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Common Stock contained in
the Prospectus. None of the issued shares of capital stock of the Company or
its predecessor or any of its subsidiaries has been issued or is owned or held
in violation of any preemptive rights of shareholders, and no person or entity
(including any holder of outstanding shares of capital stock of the Company or
its subsidiaries) has any preemptive or other rights to subscribe for any of the
Shares.
(8) All of the issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and (except as noted in paragraph 1(a)(6) above) are owned
beneficially by the Company free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever. Other than the
subsidiaries (and certain inactive subsidiaries that are not material to the
Company), the Company does not own, directly or indirectly, any capital stock or
other equity securities of any other corporation or any ownership interest in
any partnership, joint venture or other association, except as disclosed in the
Prospectus.
(9) Except as disclosed in the Prospectus, there are no material amounts of
outstanding (i) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (ii) warrants, rights or options to subscribe
for or purchase from the Company or any such subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
(10) Since the date of the most recent audited financial statements
included in the Prospectus, neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from fire,
explosion, flood or
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other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as disclosed in
or contemplated by the Prospectus.
(11) Except as disclosed in the Prospectus, since the respective dates as
of which information is given in the Registration Statement, any 462(b)
Registration Statement and the Prospectus, (i) neither the Company nor any of
its subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and its subsidiaries, taken as a
whole, (ii) the Company has not purchased any of its outstanding capital stock
or declared, paid or otherwise made any dividend or distribution of any kind on
its capital stock, (iii) there has not been any change in the capital stock,
long-term debt or short-term debt of the Company or any of its subsidiaries
other than in the ordinary course of the Company's business consistent with past
practice (such as fluctuations in indebtedness under the Company's revolving
credit facility), and (iv) there has not been any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the financial position, results of operations or business of the Company and its
subsidiaries, taken as a whole, in each case other than as disclosed in or
contemplated by the Prospectus.
(12) The certificates evidencing the Shares will comply with all applicable
requirements of Delaware law.
(13) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (i) to require the Company to file a registration statement
under the Act with respect to any material amount of securities of the Company
owned or to be owned by such person or (ii) to require the Company to include
any such securities in the securities registered pursuant to the Registration
Statement (or any such right has been effectively waived) or any securities
being registered pursuant to any other registration statement filed by the
Company under the Act.
(14) All offers and sales of the Company's capital stock prior to the date
hereof were at all relevant times duly registered under the Act or exempt from
the registration requirements of the Act and were duly registered or the subject
of an available exemption from the registration requirements of the applicable
state securities or blue sky laws.
(15) Neither the Company nor any of its subsidiaries is, or with the giving
of notice or passage of time or both would be, in violation of its Certificate
of Incorporation or Bylaws or in default under any material indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
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the Company or any of its subsidiaries is a party or to which any of their
respective properties or assets are subject.
(16) The original issuance of the Shares by the Company to the Selling
Shareholders does not, and the performance of this Agreement by the Company and
the consummation of the transactions herein contemplated will not, conflict
with, or (with or without the giving of notice or the passage of time or both)
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or to which any of their respective
properties or assets is subject, nor does or will such action conflict with or
violate any provision of the Certificate of Incorporation or Bylaws, each as
amended, of the Company or any of its subsidiaries or (except as rights to
indemnity and contribution hereunder may be limited by applicable law) any
statute, rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets.
(17) The Company and its subsidiaries have good and marketable title in fee
simple to all real property, if any, and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as do not materially and adversely affect
the aggregate value of such property and do not materially interfere with the
use made or proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company or any of its subsidiaries are held under valid, subsisting and
enforceable leases, with such exceptions as are disclosed in the Prospectus or
are not material and do not materially interfere with the use made or proposed
to be made of such property and buildings by the Company or such subsidiary.
(18) No consent, approval, authorization, order or declaration of or from,
or registration, qualification or filing with, any court or governmental agency
or body is required for the issue and sale of the Shares or the consummation of
the transactions contemplated by this Agreement, except (i) the registration of
the Shares under the Act (which, if the Registration Statement is not effective
as of the time of execution hereof, shall be obtained as provided in this
Agreement), (ii) such as may be required under state securities or blue sky laws
in connection with the offer, sale and distribution of the Shares by the
Underwriters and (iii) such as may be required by the National Association of
Securities Dealers, Inc. ("NASD") in connection with the underwriting
arrangements relating to the sale of the Shares pursuant to this Agreement.
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(19) Other than as disclosed in the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation pending or
threatened (or any basis therefor) in which the Company or any of its
subsidiaries is a party or of which any of their respective properties or assets
are the subject which, if determined adversely to the Company or any such
subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, results of operations or business of the
Company and its subsidiaries. Neither the Company nor any of its subsidiaries
is in violation of, or in default with respect to, any statute, rule,
regulation, order, judgment or decree, except as described in the Prospectus or
such as do not and will not individually or in the aggregate have a material
adverse effect on the financial position, results of operations or business of
the Company and its subsidiaries, taken as a whole, and neither the Company nor
any of its subsidiaries is required to take any action in order to avoid any
such violation or default.
(20) KPMG Peat Marwick, who have certified certain financial statements of
the Company and its consolidated subsidiaries, are, and were during the periods
covered by their reports included in the Registration Statement, any 462(b)
Registration Statement, and the Prospectus, independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder.
(21) The consolidated financial statements and schedules (including the
related notes) of the Company and its consolidated subsidiaries included in the
Registration Statement, any 462(b) Registration Statement, the Prospectus or any
Preliminary Prospectus were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
fairly present, in all material respects, the financial position and results of
operations of the Company and its subsidiaries, on a consolidated basis, at the
dates and for the periods presented. The selected financial data set forth
under the caption "Summary Financial Data" in the Prospectus fairly present, in
all material respects, on the basis stated in the Prospectus, the information
included therein.
(22) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws relating to or affecting the enforcement of creditors'
rights generally and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying such
laws.
(23) Neither the Company nor any of its officers, directors or affiliates
has (i) taken, directly or indirectly, any action
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designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or (ii)
since the filing of the Registration Statement (A) sold, bid for, purchased or
paid anyone any compensation for soliciting purchases of, the Shares or (B) paid
or (except as contemplated by this Agreement) agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(24) The Company has obtained for the benefit of the Company and the
Underwriters from each of its directors and executive officers, from Safeguard
Scientifics, Inc., and from each Selling Shareholder, a written agreement that
for a period of 90 days from the date of the Prospectus such director, officer
or shareholder will not, without the prior written consent of The Xxxxxxxx-
Xxxxxxxx Company, Inc., offer, pledge, sell, contract to sell, grant any option
for the sale of, or otherwise dispose of (or announce any offer, pledge, sale,
grant of an option to purchase or other disposition), directly or indirectly,
any shares of Common Stock owned by such officer, director or shareholder, or
securities convertible into, or exercisable or exchangeable for, shares of
Common Stock, other than sales in the offering contemplated hereby, or bona fide
gifts or transfers effected other than on any securities exchange or in the
over-the-counter market to donees or transferees who agree to be bound by the
terms of such agreement, and shall hold such Common Stock subject to the terms
thereof until the end of such 90-day period.
(25) Neither the Company, any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any such subsidiary has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
unlawful rebate, payoff, influence payment, kickback or other unlawful payment.
(26) The operations of the Company and its subsidiaries with respect to any
real property currently leased or owned or by any means controlled by the
Company or any subsidiary (the "Real Property") are and have been in material
compliance with all federal, state, and local laws, ordinances, rules, and
regulations relating to occupational health and safety and the environment
(collectively, "Laws"), and the Company and its subsidiaries have all material
licenses, permits and authorizations necessary to operate under all Laws and are
in material compliance with all terms and conditions of such licenses, permits
and authorizations; neither the Company nor any subsidiary has authorized,
conducted or has knowledge of the
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unlawful generation, transportation, storage, use, treatment, disposal or
release of any hazardous substance, hazardous waste, hazardous material,
hazardous constituent, toxic substance, pollutant, contaminant, petroleum
product, natural gas, liquefied gas or synthetic gas defined or regulated under
any environmental law on, in or under any Real Property; and there is no pending
or threatened claim, litigation or any administrative agency proceeding, nor has
the Company or any subsidiary received any written or oral notice from any
governmental entity or third party, that: (i) alleges a violation of any Laws by
the Company or any subsidiary; (ii) alleges the Company or any subsidiary is a
liable party under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S) 9601 et seq., or any state superfund law; (iii)
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alleges possible contamination of the environment by the Company or any
subsidiary; or (iv) alleges possible contamination of the Real Property.
(27) The Company and its subsidiaries own or have the right to use all
material patents, patent applications, trademarks, trademark applications,
tradenames, service marks, copyrights, franchises, trade secrets, proprietary or
other confidential information and intangible properties and assets
(collectively, "Intangibles") necessary to their respective businesses as
presently conducted or as the Prospectus indicates the Company or such
subsidiary proposes to conduct; to the best knowledge of the Company, neither
the Company nor any subsidiary has infringed or is infringing, and neither the
Company nor any subsidiary has received notice of infringement with respect to,
asserted Intangibles of others; and, to the best knowledge of the Company, there
is no infringement by others of Intangibles of the Company or any of its
subsidiaries.
(28) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business on terms that would not have a
material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries, taken as a whole.
(29) Each of the Company and its subsidiaries makes and keeps materially
accurate books and records reflecting its assets and maintains internal
accounting controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions are
recorded as necessary to permit preparation of the Company's consolidated
financial statements in accordance with generally accepted accounting principles
and to maintain accountability for the assets of the Company, (iii) access to
the assets of the Company and each of its subsidiaries is permitted only in
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accordance with management's authorization, and (iv) the recorded accountability
for assets of the Company and each of its subsidiaries is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(30) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distributions on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company, except as disclosed in the Prospectus.
(31) The Company and its subsidiaries have filed all material foreign,
federal, state and local tax returns that are required to be filed by them and
have paid all taxes shown as due on such returns as well as all other material
taxes, assessments and governmental charges that are due and payable; and no
material deficiency with respect to any such return has been assessed or
proposed.
(32) The Company is not, will not become as a result of the transactions
contemplated hereby, and does not intend to conduct its business in a manner
that would cause it to become, an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940.
(b) Each of the Selling Shareholders, severally and not jointly, represents
and warrants to, and agrees with, each of the Underwriters and the Company that:
(1) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Shareholder of this Agreement, as well as
a Custody Agreement and a Power of Attorney, as hereinafter referred to, and for
the sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder, have been obtained, and such Selling Shareholder has full right,
power and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder.
(2) The sale of the Shares to be sold by such Selling Shareholder hereunder
and the performance of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling Shareholder
is bound, the declaration of trust of such Selling Shareholder if such Selling
Shareholder is a
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trust, or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Shareholder or the property of such
Selling Shareholder.
(3) Such Selling Shareholder has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) such Selling Shareholder will have,
good and valid title to the Shares to be sold by such Selling Shareholder
hereunder, free and clear of all liens, encumbrances, equities or claims; and,
upon delivery of such Shares and payment therefor pursuant hereto, good and
valid title to such Shares, free and clear of all liens, encumbrances, equities
or claims, will pass to the several Underwriters.
(4) Such Selling Shareholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
(5) To the extent that any statements or omissions made in the Registration
Statement, any 462(b) Registration Statement, any Preliminary Prospectus or the
Prospectus are made in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use therein,
such Preliminary Prospectus did, and the Registration Statement, any 462(b)
Registration Statement, and the Prospectus will, when they become effective or
are filed with the Commission, as the case may be, conform in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, each of the Selling
Shareholders severally and not jointly agrees to deliver to you prior to or at
the First Time of Delivery (as defined in Section 4 hereof) a properly completed
and executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu thereof).
Each of the Selling Shareholders severally and not jointly represents and
warrants that certificates in negotiable form representing all of the Shares to
be sold by such Selling Shareholder hereunder have been placed in custody under
a Custody Agreement duly executed and delivered by such Selling Shareholder to
Chemical Mellon Shareholder Services LLC, as custodian (the "Custodian"), and
has executed and delivered a Power of Attorney appointing Xxxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxx and
12
Xxxxxx X'Xxxxxxx as such Selling Shareholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement on
behalf of such Selling Shareholder, to determine the purchase price to be paid
by the Underwriters to such Selling Shareholder hereunder and otherwise to act
on behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement.
Each of the Selling Shareholders severally and not jointly
specifically agrees that the Shares represented by the certificates held in
custody for such Selling Shareholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder, and that the arrangements made by
such Selling Shareholder for such custody and the appointment by such Selling
Shareholder of the Attorneys-in-Fact are to that extent irrevocable. Each of
the Selling Shareholders severally and not jointly specifically agrees that the
obligations of the Selling Shareholders hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual Selling
Shareholder or, in the case of an estate or trust, by the occurrence of any
other event. If any individual Selling Shareholder or any such executor or
trustee should die or become incapacitated, or if any such other event should
occur before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of such Selling Shareholder in
accordance with the terms and conditions of this Agreement, and actions taken by
the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity or other event had not occurred, regardless of whether or
not the Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity or other event.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) each Selling Shareholder severally and not jointly agrees
to sell in the respective amounts set forth in Schedule I hereto the Firm Shares
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from each Selling Shareholder, at a purchase price of
$5.65 per share, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto, and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares as
provided below, certain of the Selling Shareholders, severally and not jointly,
agree to sell in the respective amounts set forth in Schedule I hereto the
Optional Shares to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from such Selling Shareholders,
at the purchase price per share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to which such election shall have
been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of
13
Optional Shares that such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule II hereto and the denominator
of which is the maximum number of the Optional Shares that all of the
Underwriters are entitled to purchase hereunder.
Certain of the Selling Shareholders, as and to the extent indicated in
Schedule I hereto, severally and not jointly hereby grant to the Underwriters
the right to purchase at your election in whole or in part from time to time up
to 630,000 Optional Shares, at the purchase price per share set forth in clause
(a) in the paragraph above, for the sole purpose of covering over-allotments in
the sale of Firm Shares. In the event that you elect to purchase less than all
of the Optional Shares, such purchase shall be made pro rata from such Selling
Shareholders according to the total number of Optional Shares subject to
purchase from them. Any such election to purchase Optional Shares may be
exercised by written notice from you to the Company and the Attorneys-in-Fact,
given from time to time within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
hereinafter defined) or, unless you, the Company and the Attorneys-in-Fact
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice. In the event you elect to purchase all or a
portion of the Optional Shares, the Company and the Selling Shareholders
severally and not jointly agree to furnish or cause to be furnished to you the
certificates, letters and opinions, and to satisfy all conditions, set forth in
Section 7 hereof at each Subsequent Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by you of the
release of the Shares, the several Underwriters propose to offer the Shares for
sale upon the terms and conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as The Xxxxxxxx-Xxxxxxxx Company, Inc. may request
upon at least 48 hours' prior notice to the Company and the Attorneys-in-Fact
shall be delivered by or on behalf of the Selling Shareholders to you for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by official bank check or checks (payable
in next day funds) drawn on an Atlanta, Georgia bank, payable to the order of
the Custodians in next day available funds. The closing of the sale and
purchase of the Shares shall be held at the offices of Xxxxx, Day, Xxxxxx &
Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, except that physical
delivery of such certificates shall be made at the office of The Depository
Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The time and
14
date of such delivery and payment shall be, with respect to the Firm Shares, at
10:00 a.m., Atlanta time, not later than the fourth full business day after the
execution of this Agreement or at such other time and date as you, the Company
and the Attorneys-in-Fact may agree upon in writing, and, with respect to the
Optional Shares, at 10:00 a.m., Atlanta time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase all or
part of such Optional Shares, or at such other time and date as you, the Company
and the Attorneys-in-Fact may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of Delivery," such
time and date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called a "Subsequent Time of Delivery," and each such time
and date for delivery is herein called a "Time of Delivery." Such certificates
will be made available for checking and packaging at least 24 hours prior to
each Time of Delivery at the office of The Depository Trust Company, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location in New York, New York
specified by you in writing at least 48 hours prior to such Time of Delivery.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
of the Underwriters:
(a) If the Registration Statement has been declared effective prior to the
execution and delivery of this Agreement, the Company will file either (A) the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by you, subparagraph (4)) of Rule
424(b) or (B) a Term Sheet with the Commission pursuant to and in accordance
with Rule 434 not later than the earlier of (i) the second business day
following the execution and delivery of this Agreement or (ii) the fifteenth
business day after the date on which the Registration Statement is declared
effective. The Company will advise you promptly of any such filing pursuant to
Rule 424(b) or Rule 434.
(b) The Company will not file with the Commission the Prospectus or the
amendment referred to in the second sentence of Section 1(a)(1) hereof, any
amendment or supplement to the Prospectus, any Term Sheet, any amendment to the
Registration Statement or any 462(b) Registration Statement unless you have
received a reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its best efforts to
cause any such amendment to the Registration Statement to be declared effective
as promptly as possible. Upon the request of the Representatives or counsel for
the Underwriters, the Company will promptly prepare and file with the
Commission, in accordance with the rules and regulations of the Commission, any
amendments to the Registration Statement or amendments or supplements to the
Prospectus, any Term Sheet or any 462(b) Registration Statement that may be
necessary or advisable in connection with the distribution of the Shares by
15
the several Underwriters and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective as promptly as
possible. If required, the Company will file any amendment or supplement to the
Prospectus or any Term Sheet with the Commission in the manner and within the
time period required by Rule 424(b) and Rule 434, as applicable, under the Act.
The Company will advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any amendment thereto or
any 462(b) Registration Statement has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence to the Representatives of each such filing or effectiveness.
(c) The Company will advise you promptly after receiving notice or
obtaining knowledge of (i) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any 462(b)
Registration Statement or any part thereof or any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of the Shares for
offer or sale in any jurisdiction or of the initiation or threatening of any
proceeding for any such purpose, or (iii) any request made by the Commission or
any securities authority of any other jurisdiction for amending the Registration
Statement or any 462(b) Registration Statement, for amending or supplementing
the Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order and, if any such stop
order is issued, to obtain the withdrawal thereof as promptly as possible.
(d) If the delivery of a prospectus relating to the Shares is required
under the Act at any time prior to the expiration of nine months after the date
of the Prospectus and if at such time any events have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or if for any reason it is necessary during such
same period to amend or supplement the Prospectus to comply with the Act or the
rules and regulations thereunder, the Company will promptly notify you and upon
your request (but at the Company's expense) prepare and file with the Commission
an amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance and will furnish without charge to each
Underwriter and to any dealer in securities as many copies of such amended or
supplemented Prospectus as you may from time to time reasonably request. If the
delivery of a prospectus relating to the Shares is required under the Act at any
time ninety days or more after the date of the Prospectus, upon your request but
at the expense of such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with
16
Section 10(a)(3) of the Act. Neither your consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 7.
(e) The Company promptly from time to time will take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as you may request and will
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction.
(f) The Company will promptly provide you, without charge, (i) three
manually executed copies of the Registration Statement and any 462(b)
Registration Statement as originally filed with the Commission and of each
amendment thereto, (ii) for each other Underwriter a conformed copy of the
Registration Statement and any 462(b) Registration Statement as originally filed
and of each amendment thereto, without exhibits, and (iii) so long as a
prospectus relating to the Shares is required to be delivered under the Act, as
many copies of each Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto as you may reasonably request.
(g) As soon as practicable, but in any event not later than the last day of
the thirteenth month after the effective date of the Registration Statement, the
Company will make generally available to its security holders an earning
statement of the Company and its subsidiaries, if any, covering a period of at
least 12 months beginning after the effective date of the Registration Statement
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder.
(h) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, the Company will
not, without the prior written consent of The Xxxxxxxx-Xxxxxxxx Company, Inc.,
offer, pledge, issue, sell, contract to sell, grant any option for the sale of,
or otherwise dispose of (or announce any offer, pledge, sale, grant of an option
to purchase or other disposition), directly or indirectly, any shares of Common
Stock or securities convertible into, exercisable or exchangeable for, shares of
Common Stock, except for (i) the issuance of Common Stock upon the exercise of
stock options or warrants outstanding on the date of this Agreement to the
extent that such stock options or warrants are properly disclosed or reflected
in the Prospectus, (ii) the grant of stock options pursuant to stock option
plans of the Company existing and as in effect on the date of this Agreement,
and (iii) restricted shares of Common Stock issued in private
17
placements in connection with acquisitions that may be undertaken by the
Company.
(i) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to you and, upon request, to
each of the other Underwriters, without charge, (i) copies of all reports or
other communications (financial or other) furnished to shareholders, (ii) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange,
and (iii) such additional information concerning the business and financial
condition of the Company and its subsidiaries, if any, as you may reasonably
request.
(j) Neither the Company nor any of its officers, directors or affiliates
will (i) take, directly or indirectly, prior to the termination of the
underwriting syndicate contemplated by this Agreement, any action designed to
cause or to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or (except as contemplated by this Agreement) pay anyone any compensation for
soliciting purchases of, the Shares or (iii) pay or agree to pay to any person
any compensation for soliciting another to purchase any other securities of the
Company.
(k) If at any time during the period beginning on the date the Registration
Statement becomes effective and ending on the later of (i) the date 30 days
after such effective date and (ii) the date that is the earlier of (A) the date
on which the Company first files with the Commission a Quarterly Report on Form
10-Q after such effective date and (B) the date on which the Company first
issues a quarterly financial report to shareholders after such effective date,
any rumor, publication or event relating to or affecting the Company shall occur
as a result of which in your reasonable opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates an amendment of or supplement to
the Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith consult with you concerning the
substance of, and, if the Company and you shall reasonably determine that it is
appropriate, disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication or
event.
6. EXPENSES. The Company and each Selling Shareholder, severally and not
jointly, covenants and agrees with one another and with the Underwriters,
whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated pursuant to Section 10 hereof, that (a) the Selling
Shareholders will pay (prorata based upon the number of Firm
18
Shares to be sold by each of them) the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and, if applicable, filing of the Registration
Statement (including all amendments thereto), any 462(b) Registration Statement,
any Preliminary Prospectus, the Prospectus and any amendments and supplements
thereto, this Agreement and any blue sky memoranda; (ii) the delivery of copies
of the foregoing documents to the Underwriters; (iii) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating to
the Shares; (iv) the preparation, issuance and delivery to the Underwriters of
any certificates evidencing the Shares, including transfer agent's and
registrar's fees; (v) the qualification of the Shares for offering and sale
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, up to $10,000 in
the aggregate; (vi) the fees and expenses of counsel for the Selling
Shareholders; (vii) the fees and expenses of the Attorneys-in-Fact and the
Custodians; (viii) all expenses and taxes incident to the sale and delivery of
the Shares to be sold by the Selling Shareholders to the Underwriters hereunder
and (ix) all other costs and expenses incident to the performance of the Selling
Shareholders' obligations hereunder that are not otherwise specifically provided
for in this Section 6. The Company will pay any expenses for travel, lodging
and meals incurred by the Company and any of its officers, directors and
employees in connection with any meetings with prospective investors in the
Shares, and will also pay that portion of the expenses referenced in clauses (i)
through (vii) and clause (ix) in the preceding sentence to the extent that such
expenses exceed $175,000 in the aggregate. It is understood, however, that,
except as provided in this Section, Section 8 and Section 10 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them,
state securities and blue sky related fees and expenses in excess of $10,000,
and any advertising expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company and the Selling Shareholders
contained herein as of the date hereof and as of such Time of Delivery, to the
accuracy of the statements of Company officers and the Selling Shareholders made
pursuant to the provisions hereof, to the performance by the Company of its
covenants and agreements hereunder, and to the following additional conditions
precedent:
(a) If the registration statement as amended to date has not become
effective prior to the execution of this Agreement,
19
such registration statement shall have been declared effective not later than
11:00 a.m., Atlanta time, on the date of this Agreement or such later date
and/or time as shall have been consented to by you in writing. The Prospectus
and any amendment or supplement thereto or a Term Sheet shall have been filed
with the Commission pursuant to Rule 424(b) or Rule 434, as applicable, within
the applicable time period prescribed for such filing and in accordance with
Section 5(a) of this Agreement; any 462(b) Registration Statement shall have
been filed with the Commission and have become effective; and no stop order
suspending the effectiveness of the Registration Statement or any 462(b)
Registration Statement, respectively, or any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted, threatened or,
to the knowledge of the Company and the Representatives, contemplated by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction.
(b) Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Company, the validity of the Shares being
delivered at such Time of Delivery, the Registration Statement, and any 462(b)
Registration Statement, the Prospectus, and other related matters as you may
reasonably request, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(c) You shall have received an opinion, dated such Time of Delivery, of
Xxxxxx, Xxxxx & Bockius, special counsel for the Company in form and substance
satisfactory to you and your counsel, to the effect that:
(i) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to own or lease its properties, to carry on its business as
described in the Registration Statement and Prospectus, and to enter into this
Agreement and to perform its obligations hereunder.
(ii) Each of CompuCom Properties, Inc., The Computer Factory Inc.,
ClientLink, Inc., and International Micronet Systems, Inc. (the "Active
Subsidiaries") is a corporation validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate power and
authority to own or lease its properties and to carry on its business as
described in the Registration Statement and Prospectus.
(iii) The Company has an authorized capitalization as disclosed in
the Prospectus. The Shares to be sold by the Selling Shareholders pursuant to
this Agreement have been duly
20
authorized and are validly issued, fully paid and nonassessable and conform to
the description thereof contained in the Prospectus. No preemptive rights of
stockholders relating to the issuance of the Shares by the Company or the sale
thereof pursuant to this Agreement exist under the Delaware General Corporation
Law, the Company's certificate of incorporation or bylaws, or any agreement
known to such counsel.
(iv) To such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding rights, options, warrants or agreements for
the purchase from, or sale or issuance by, the Company or any Active Subsidiary
of any capital stock or securities convertible into or exchangeable for such
capital stock.
(v) The certificates evidencing the Shares comply with all
applicable requirements of the Delaware General Corporation Law.
(vi) To such counsel's knowledge, except as disclosed in the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person granting such person any rights with respect to the
registration of any capital stock of the Company under the Act. Except for the
Selling Shareholders, no person has the right to require the Company to include
in the Registration Statement securities owned by such person or issuable to
such person upon conversion of securities of the Company (other than rights
which have been effectively waived).
(vii) The issuance of the Shares to the Selling Shareholders upon
conversion of the Company's 9% Convertible Subordinated Notes due 2002, the
execution and delivery of this Agreement by the Company and the performance by
the Company of its obligations hereunder will not conflict with, or (with or
without the giving of notice or the passage of time or both) result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument known to such counsel to which the Company or any
Active Subsidiary is a party or to which any of their respective properties or
assets is subject, nor will such action conflict with or violate any provision
of the certificate of incorporation or bylaws of the Company, assuming
compliance with all applicable state securities or blue sky laws (as to which
such counsel need express no opinion) any statute, rule or regulation, or any
order, judgment or decree known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any subsidiaries or any
of their respective properties or assets.
(viii) No consent, approval, authorization, order or declaration of
or from, or registration, qualification or filing with, any court or
governmental agency or body is required on the
21
part of the Company for the sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except the registration of the
Shares under the Act, such as may be required under state securities or blue sky
laws (as to which such counsel need express no opinion) and such as may be
required by the National Association of Securities Dealers, Inc. (as to which
such counsel need express no opinion).
(ix) To such counsel's knowledge and other than as disclosed in or
contemplated by the Prospectus, there is no litigation, arbitration, claim,
proceeding (formal or informal) or investigation pending or threatened against
the Company or any Active Subsidiary, or to which any of their properties or
assets is subject, of a character which is required to be disclosed in the
Registration Statement or the Prospectus by the Act and the applicable rules and
regulations thereunder.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) The Registration Statement, as of its effective date, and the
Prospectus, as of its date and as of the Time of Delivery, complied as to form
in all material respects with the requirements of the Act and the rules and
regulations thereunder, except that we express no opinion as to the financial
statements, notes thereto and related statements, schedules and other financial
and statistical information included or incorporated by reference therein or any
information furnished in writing by the Underwriters specifically for use
therein.
(xii) Such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the Registration Statement
or Prospectus, or any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement, which are not described and filed as required.
(xiii) The Registration Statement has become effective under the
Act. The Prospectus has been filed with the Commission in the manner and within
the time period required by Rule 424(b). To such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or threatened or are
contemplated by the Commission.
(xiv) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by the Underwriting Agreement, an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940.
Such counsel shall also state that no facts have come to such
counsel's attention that would cause such counsel to
22
believe that (i) the Registration Statement, at the time it became effective
under the Act and at the Time of Delivery, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) the Prospectus, as of its date and as of the Time of
Delivery, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that such counsel need express no view with
--------
respect to the financial statements, notes thereto and related statements,
schedules and other financial and statistical information included or
incorporated by reference into the Registration Statement or the Prospectus or
any information furnished in writing by the Underwriters specifically for use
therein.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials.
(d) Xxxxxx, Xxxx & Xxxxxxx, counsel for each of the Selling Shareholders,
shall have furnished to you their written opinion with respect to each of the
Selling Shareholders, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Each Custody Agreement and Power of Attorney constitutes the
valid and binding agreement of the Selling Shareholder party thereto in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws of general application now or
hereafter in effect affecting the rights and remedies of creditors and by
general principles of equity.
(ii) To the best of such counsel's knowledge, the sale of the
Shares to be sold by each Selling Shareholder will not result in a violation of
provisions of any statute or law by which such Selling Shareholder or its
property is bound.
(iii) To the best of such counsel's knowledge, no consent, approval
or authorization of any governmental agency or body of the United States of
America or The Commonwealth of Massachusetts is required for the sale of the
Shares by the Selling Shareholders, except such as have been obtained under the
Act.
(iv) Upon delivery of the Shares and payment therefor as
contemplated by this Agreement, and assuming that the Underwriters are bona fide
purchasers within the meaning of Section 8-302 of the Uniform Commercial Code of
The Commonwealth of Massachusetts (the "Massachusetts UCC"), the Underwriters
who
23
have purchased such Shares in good faith and without notice of any adverse claim
within the meaning of Section 8-302 of the Massachusetts UCC shall have acquired
such Shares free of any adverse claim.
(e) You shall have received from KPMG Peat Marwick letters dated,
respectively, the date hereof (or, if the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement, dated
such effective date and the date of this Agreement) and each Time of Delivery,
in form and substance satisfactory to you, to the effect set forth in Annex I
hereto. In the event that the letters referred to in this Section 7(e) set
forth any changes, decreases or increases in the items specified in paragraph
(iv)(c) of Annex I, it shall be a further condition to the obligations of the
Underwriters that (i) such letters shall be accompanied by a written explanation
by the Company as to the significance thereof, unless the Representatives deem
such explanation unnecessary, and (ii) such changes, decreases or increases do
not, in your sole judgment, make it impracticable or inadvisable to proceed with
the purchase, sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as of the
date of such letter.
(f) Since the date as of which information is given in the Prospectus,
neither the Company nor any of its subsidiaries shall have sustained (i) any
loss or interference with their respective businesses from fire, explosion,
flood, hurricane or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectus, or (ii) any change, or
any development involving a prospective change (including without limitation a
change in management or control of the Company), in or affecting the position
(financial or otherwise), results of operations, net worth or business prospects
of the Company and its subsidiaries, otherwise than as disclosed in or
contemplated by the Prospectus, the effect of which, in either such case, is in
your judgment so material and adverse as to make it impracticable or inadvisable
to proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(g) Subsequent to the date hereof there shall not have occurred any of the
following: (i) any suspension or limitation in trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or in the Common Stock by the Commission or The Nasdaq Stock
Market; (ii) a moratorium on commercial banking activities in New York declared
by either federal or state authorities; or (iii) any outbreak or escalation of
hostilities involving the United States, declaration by the United States of a
national emergency or war or any other national or international calamity or
emergency if the effect of any such event specified in this
24
clause (iii) in your judgment makes it impracticable or inadvisable to proceed
with the purchase, sale and delivery of the Shares being delivered at such Time
of Delivery as contemplated by the Registration Statement, as amended as of the
date hereof.
(h) The Company and the Selling Shareholders shall have furnished to you at
such Time of Delivery certificates of officers of the Company and the Selling
Shareholders, satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Shareholders herein at and as of such
Time of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, and as to such
other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set forth in
subsections (a) and (f) of this Section 7, and as to such other matters as you
may reasonably request.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement made by the Company in Section
1(a) of this Agreement; (ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any 462(b)
Registration Statement, or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or (B) any application or
other document, or any amendment or supplement thereto, executed by the Company
or based upon written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Shares under the securities or blue
sky laws thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"); or (iii) the omission or alleged
omission to state in the Registration Statement or any 462(b) Registration
Statement, or any amendment thereto, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement or any 462(b) Registration Statement, or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment
or
25
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through you
expressly for use therein. The Company will not, without the prior written
consent of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding (or
related cause of action or portion thereof) in respect of which indemnification
may be sought hereunder (whether or not such Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all liability
arising out of such claim, action, suit or proceeding (or related cause of
action or portion thereof).
(b) Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement made by such Selling
Shareholder in Section 1(b) of this Agreement; (ii) any untrue statement or
alleged untrue statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any 462(b) Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or (B) any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to qualify the
Shares under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"); or (iii) the omission or alleged omission to state in the
Registration Statement, any 462(b) Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or any Application 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 referred to in clause (ii), or omission or alleged omission
referred to in clause (iii), was made in reliance upon and in conformity with
written information furnished by such Selling Shareholder expressly for use
therein; and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that no
Selling Shareholder shall be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement or any 462(b) Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus
26
or any amendment or supplement thereto or any Application in reliance upon and
in conformity with information furnished by the Company or written information
furnished to the Company by any Underwriter through you expressly for use
therein; and provided, further, that no Selling Shareholder shall be liable
under this Section 8 in an aggregate amount in excess of the net proceeds
(before deducting expenses) received by such Selling Shareholder from the sale
of its portion of the Shares. No Selling Shareholder will, without the prior
written consent of each Underwriter, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(c) Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company or such Selling Shareholder
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any 462(b) Registration Statement, or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application or arise out of or are 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 reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will reimburse the
Company and each Selling Shareholder for any legal or other expenses reasonably
incurred by the Company and such Selling Shareholder in connection with
investigating or defending any such loss, claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsections (a),
(b) and (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
27
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party); provided, however, that 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 there may be one or more
legal defenses available to it or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnified party shall have the
right to select separate counsel to defend such action on behalf of such
indemnified party. It is understood that the indemnifying party shall not be
liable for the reasonable fees and expenses of more than one such separate firm
(plus one additional firm to serve as local counsel if necessary) for all
indemnified parties in connection with one action (or separate but similar or
related actions) arising out of the same general allegations or circumstances.
After such notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action (which approval shall not be
unreasonably withheld), the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, 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 or (ii) the indemnifying party has
specifically authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party. Nothing in this Section 8(d) shall
preclude an indemnified party from participating at its own expense in the
defense of any such action so assumed by the indemnifying party.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsections (a), (b)
or (c) above (other than by reason of the exceptions provided in such
paragraphs) in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying 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)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Shareholders on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (d) above, then each indemnifying party shall contribute to such
28
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the several Selling Shareholders on the one hand and
the Underwriters on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters. The 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 and the
Selling Shareholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Shareholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) 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 above in this subsection (e). 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
subsection (e) 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 subsection
(e), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. In
addition, notwithstanding the provisions of this subsection (e), no Selling
Shareholder shall be required to contribute any amount in excess of the amount
by which the net proceeds received by such Selling Shareholder from the sale of
its portion of the Shares exceeds the amount of any damages which such Selling
Shareholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint. In addition, the Selling Shareholders' respective
obligations under this
29
subsection (e) to contribute are several in proportion to the amount of net
proceeds received by each Selling Shareholder from the sale of the Shares, and
not joint.
(f) The obligations of the Company and the Selling Shareholders under this
Section 8 shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and to the Selling Shareholders and to each person, if any, who controls the
Company and any Selling Shareholder within the meaning of the Act.
(g) As between the Company and the Selling Shareholders, nothing contained
in this Agreement shall be deemed to modify or supercede any existing
indemnification or similar arrangements previously made between the Company and
any Selling Shareholder, including, without limitation, section 12.7 of the Note
Agreements dated September 24, 1992 between the Company and each of the Selling
Shareholders (the "Note Agreements"), it being expressly acknowledged by the
Company and the Selling Shareholders that the registration contemplated hereby
is deemed to be a registration pursuant to section 12.4 of the Note Agreements
and the indemnification provisions set forth in section 12.7 of the Note
Agreements apply to this registration and are hereby ratified and confirmed by
the Company and the Selling Shareholders.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in its
obligation to purchase Shares at a Time of Delivery, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within thirty-six (36) hours after such default by
any Underwriter you do not arrange for the purchase of such Shares, the Company
and the Selling Shareholders shall be entitled to a further period of thirty-six
(36) hours within which to procure another party or other parties satisfactory
to you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Attorneys-in-Fact
that you have so arranged for the purchase of such Shares, or the Company or
Attorneys-in-Fact notify you that they have arranged for the purchase of such
Shares, you or the Company or Attorneys-in-Fact shall have the right to postpone
a Time of Delivery for a period of not more than seven days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in your opinion may thereby be made necessary. The cost of
preparing, printing and
30
filing any such amendments shall be paid for by the Underwriters. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of Shares to be purchased at such Time of Delivery, then
the Company and the Selling Shareholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made, but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. TERMINATION. (a) This Agreement may be terminated with respect to
the Firm Shares or any Optional Shares in the sole discretion of the
Representatives by notice to the Company and the Attorneys-in-Fact given prior
to the First Time of Delivery or any Subsequent Time of Delivery, respectively,
in the event that (i) any condition to the obligations of the Underwriters set
forth in Section 7 hereof has not been satisfied, or (ii) the Selling
Shareholders shall have failed, refused or been unable to deliver the Shares or
the Company or Selling Shareholders have failed to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior to such Time of Delivery, in either case other than by reason of a default
by any of the Underwriters. If this Agreement is terminated pursuant to Section
10(a)(i), the Company and Selling Shareholders, and if this Agreement is
terminated pursuant to Section 10(a)(ii) the Selling Shareholders, will
reimburse the Underwriters severally upon demand for all reasonable out-of-
pocket expenses (including reasonable counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Shares up to a maximum of $75,000 in the aggregate. The Company and the
Selling Shareholders shall not in any event be liable to any of the Underwriters
for the loss of anticipated profits from the transactions covered by this
Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you, the Company and the
Selling Shareholders as provided in Section 9(a), the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
Shares to be purchased at such Time of Delivery, or if
31
the Company and the Selling Shareholders shall not exercise the right described
in Section 9(b) to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect to
a Subsequent Time of Delivery, the obligations of the Underwriters to purchase
and of the Selling Shareholders to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company and Selling Shareholders, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Company's officers, the
Selling Shareholders, and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person referred to in Section 8(f) or the
Company, or any officer or director or controlling person of the Company
referred to in Section 8(f), and shall survive delivery of and payment for the
Shares. The respective agreements, covenants, indemnities and other statements
set forth in Sections 6 and 8 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to you in care of The Xxxxxxxx-Xxxxxxxx Company, Inc., 0000
Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Corporate Finance
Department (with a copy to Xxxxx, Day, Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000, Attention: Dom X. Xxxxx, Esq.; and if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed in writing to
the Company at CompuCom Systems, Inc., 00000 X. Xxxxxxx Xxxxxxxxxx, Xxxxxx,
Xxxxx 00000, Attention: Chief Financial Officer; and if sent to the Selling
Shareholders, shall be mailed, delivered or telegraphed and confirmed in writing
to Massachusetts Mutual Life Insurance Company, 0000 Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Second Vice President;
Pecks Management Partners, Ltd., Xxx Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxx, Managing Director; and Froley, Revy
Investment Co., Inc., 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000, Attention: Xxxxxx X'Xxxxxxx; (with a copy (which shall
not constitute notice) to Xxxxxx, Hall & Xxxxxxx, Exchange Place, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Xx., Esq.).
32
13. REPRESENTATIVES. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you jointly or by The Xxxxxxxx-Xxxxxxxx Company,
Inc. will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and the Selling
Shareholders and to the extent provided in Section 8 hereof, the officers and
directors and controlling persons referred to therein and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without giving effect to any
provisions regarding conflicts of laws.
16. COUNTERPARTS, CAPTIONS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. The captions in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
33
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one of the counterparts hereof, and upon the
acceptance hereof by The Xxxxxxxx-Xxxxxxxx Company, Inc., on behalf of each of
the Underwriters, this letter will constitute a binding agreement among the
Underwriters, the Company and the Selling Shareholders. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in the Master Agreement among Underwriters, a copy of
which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
COMPUCOM SYSTEMS, INC.
By: /s/ LAZANE XXXXX
--------------------------------------
Name: Lazane Xxxxx
Title: Vice President, Finance
"SELLING SHAREHOLDERS"
By: /s/ XXXXXX X. XXXXX
---------------------------------------
Attorney-in-Fact for the Selling
Shareholders listed on Schedule I
hereto
34
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
Atlanta, Georgia.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
XXXXXXXXX & XXXXX LLC
As Representatives of the several
Underwriters named in Schedule II
hereto
By: The Xxxxxxxx-Xxxxxxxx Company, Inc.
By: /s/ XXXXXXX X. XXXXXXXXX
-------------------------------
(Authorized Representative)
35
SCHEDULE I
LIST OF SELLING SHAREHOLDERS
Numbers of
Optional
Shares to be
Sold if
Number of Firm Maximum Option
Selling Shareholders Shares to be Sold is Exercised
----------------------------- ----------------- --------------
Massachusetts Mutual Life
Insurance Company 185,000 346,500
First Interstate Bank of
Oregon as Agent for Oregon 1,590,909 -
Equity Fund
MassMutual Corporate 100,910 189,000
Investors
Delaware State Employees' 1,136,363 -
Retirement Fund
MassMutual Participation 50,457 94,500
Investors
State of Delaware
Retirement Plan-Froley, 454,545 -
Revy
Declaration of Trust for 249,090 -
Defined Benefit Plans of
ICI American Holding Inc.
The Northern Trust Company
as Trustee for Nalco 227,272 -
Chemical Company
Retirement Trust
Declaration of Trust for 205,454 -
Defined Benefit Plans of
Zeneca Holdings Inc.
--------- -------
Total........................ 4,200,000 630,000
========= =======
36
SCHEDULE II
Number of
Optional
Shares to be
Total Purchased if
Number of Firm Maximum
Shares to be Option
Underwriter Purchased Exercised
----------- --------------- -------------
The Xxxxxxxx-Xxxxxxxx 2,100,000 315,000
Company, Inc.
Xxxxxxxxx & Xxxxx LLC 2,100,000 315,000
--------- -------
Total................ 4,200,000 630,000
========= =======
37
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, KPMG Peat
Marwick shall furnish letters to the Underwriters to the effect that:
(i) they are independent public accountants with respect to the Company
and its consolidated subsidiaries within the meaning the Act and the applicable
published rules and regulations thereunder;
(ii) in their opinion, the consolidated financial statements and schedules
audited by them and included in the Prospectus and the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder;
(iii) the financial statements of the Company as of and for the six-month
period ended June 30, 1995 were reviewed by them in accordance with the
standards established by the American Institute of Certified Public Accountants
and based upon their review they are not aware of any material modifications
that should be made to such financial statements for them to be in conformity
with generally accepted accounting principles, and such financial statements
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable rules and regulations thereunder;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries included in the Registration Statement
and the Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related published rules
and regulations thereunder or are not in conformity with generally accepted
principles applied on a basis substantially consistent with that of the audited
consolidated financial
38
statements included in the Registration Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior to the date of such
letter, there were any changes in the capital stock (other than the issuance of
capital stock upon exercise of employee stock options that were outstanding on
the date of the latest balance sheet included in the Prospectus) or any increase
in inventories or the long-term debt or short-term debt of the Company and its
subsidiaries, or any decreases in net current assets or net assets or other
items specified by the Representatives, or any increases in any other items
specified by the Representatives, in each case as compared with amounts shown in
the latest balance sheet included in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur, or which are described in such letter; and
(C) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (B) there
were any decreases in revenues or operating income or the total or per share
amounts of net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have occurred or
may occur, or which are described in such letter; and
(V) In addition to the audit referred to in their report(s) included in the
Prospectus and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraph (iv) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives that are
included in the Registration Statement and the Prospectus, or which appear in
Part II of, or in exhibits or schedules to, the Registration Statement and have
compared certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them to be
in agreement.
References to the Registration Statement and the Prospectus in this Annex I
shall include any amendment or supplement thereto at the date of such letter.
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