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EXHIBIT 1.1
3,800,000 SHARES(1)
AREMISSOFT CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1999
CRUTTENDEN XXXX INCORPORATED
FIRST ALBANY CORPORATION
c/o CRUTTENDEN XXXX INCORPORATED
As Representatives of the several Underwriters
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
AremisSoft Corporation, a Delaware corporation (the "Company"), addresses
you as the Representatives of each of the persons, firms and corporations listed
in Schedule A hereto (herein collectively called the "Underwriters") and hereby
confirms its agreement with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
3,800,000 shares of its authorized and unissued Common Stock, $.001 par value
per share (the "Firm Shares"), to the several Underwriters. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
570,000 additional shares of the Company's Common Stock (the "Option Shares"),
as provided in Section 5 hereof. The Company also proposes to sell to the
Representatives, warrants (the "Representatives' Warrants") to purchase up to
190,000 shares of Common Stock of the Company (the "Representatives' Warrant
Stock"), which sale will be consummated in accordance with the terms and
conditions of the Representatives' Warrant Agreement (the "Representatives'
Warrant Agreement"), the form of which is filed as an exhibit to the
Registration Statement described below. As used in this Agreement, the term
"Shares" shall include the Firm Shares and the Option Shares. All shares of
Common Stock of the Company to be outstanding after giving effect to the sales
contemplated hereby, including the sale of the Shares, are hereinafter referred
to as "Common Stock." Unless the context otherwise requires, references herein
to the "Company" include AremisSoft Corporation together with its predecessors
and subsidiaries described in the Prospectus (hereinafter defined).
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(1) Plus an option to purchase up to an additional 570,000 shares from the
Company to cover over-allotments, if any.
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2. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to and agrees with each Underwriter
that, as of the date hereof and as of the Closing Date:
(a) A registration statement on Form S-1 (File No. 333-58351) with
respect to the Shares, including a prospectus subject to completion, has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the applicable rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Act and has been filed with the Commission; such
amendments to such registration statement and such amended prospectuses subject
to completion as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such registration statement and such amended
prospectuses as may hereafter be required. Copies of such registration statement
and amendments and of each related prospectus subject to completion have been
delivered to you. As used herein, the term "Preliminary Prospectus" shall mean
the prospectus, subject to completion, dated March 9, 1999.
If the registration statement relating to the Shares has been declared
effective under the Act by the Commission, the Company will prepare and promptly
file with the Commission the information previously omitted from the
registration statement pursuant to Rule 430A(a) of the Rules and Regulations
pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations
or as part of a post-effective amendment to the registration statement
(including a final form of prospectus). If the registration statement relating
to the Shares has not been declared effective under the Act by the Commission,
the Company will prepare and promptly file an amendment to the registration
statement to include such information, including a final form of prospectus. The
term "Registration Statement" as used in this Agreement shall mean such
registration statement, including financial statements, schedules and exhibits,
in the form in which it became or becomes, as the case may be, effective
(including, if the Company omitted information from the registration statement
pursuant to Rule 430A(a) of the Rules and Regulations, the information deemed to
be a part of the registration statement at the time it became effective pursuant
to Rule 430A(b) of the Rules and Regulations) and, in the event of any amendment
thereto after the effective date of such registration statement, shall also mean
(from and after the effectiveness of such amendment) such registration statement
as so amended. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares as included in such Registration Statement at
the time it becomes effective (including, if the Company omitted information
from the Registration Statement pursuant to Rule 430A(a) of the Rules and
Regulations, the information deemed to be a part of the Registration Statement
at the time it became effective pursuant to Rule 430A(b) of the Rules and
Regulations), except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares that differs from the prospectus on file with the Commission at the time
the Registration Statement became or becomes, as the case may be, effective
(whether or not such revised prospectus is required to be filed with the
Commission pursuant to Rule 424(b)(3) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use.
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(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or instituted proceedings for that
purpose, and each such Preliminary Prospectus, at the time of filing thereof,
has conformed in all material respects to the requirements of the Act and the
Rules and Regulations and, as of its date, has not included any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up to
and on the Closing Date (hereinafter defined) and on any later date on which
Option Shares are to be purchased, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act and
the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) the Prospectus, and any amendments or supplements thereto,
did not and will not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties contained in this subparagraph
(b) shall apply to information contained in or omitted from the Registration
Statement or Prospectus, or any amendment or supplement thereto, in reliance
upon, and in conformity with, written information relating to any Underwriter
furnished to the Company by such Underwriter specifically for use in the
preparation thereof.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 of the Registration Statement or other than subsidiaries which may be
omitted from Exhibit 21 pursuant to subparagraph (b)(21)(ii) of Item 601 of
Regulation S-K of the Rules and Regulations. All of the issued and outstanding
shares of capital stock of the Company's subsidiaries have been duly and validly
authorized and issued, are fully paid and nonassessable, and except as set forth
in Schedule 2(c), are owned by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature. There are
no outstanding subscriptions, rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock of
any of the Company's subsidiaries. The Company and each of its subsidiaries has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation with full power and
authority (corporate and other) to own, lease and operate its properties and
conduct its business as described in the Prospectus; the Company and each of its
subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have a
material adverse effect on the financial condition results of operations or
business of the Company taken as a whole; no proceeding has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification; the Company and
each of its subsidiaries is in possession of and operating in compliance in all
material respects with all authorizations, licenses, certificates, consents,
orders and permits from state, federal, foreign and other regulatory authorities
that are material to the conduct of its business, all of which are valid and in
full force and effect; neither
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the Company nor any of its subsidiaries is in violation of its charter or bylaws
or other organizational document or, except as disclosed in the Registration
Statement or Prospectus, is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness, or in any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which it is a party or by which it or its properties or assets may
be bound except for any such defaults which, individually or in the aggregate,
would not have a material adverse effect on its business, and neither the
Company nor any of its subsidiaries is in violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over it or
its properties or assets, except for any such violations which, individually or
in the aggregate, would not have a material adverse effect on its business; each
of the Company's predecessors possessed and operated in compliance in all
material respects with all authorizations, licenses, certificates, consents,
orders and permits from state, federal, foreign and other regulatory authorities
that were material to the conduct of its business.
(d) The Company has full legal right, power and authority to enter
into this Agreement and the Representatives' Warrant Agreement and to perform
the transactions contemplated hereby and thereby. Each of this Agreement and the
Representatives' Warrant Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of the
Company, enforceable in accordance with its terms, except as rights to
indemnification under this Agreement or the Representatives' Warrant Agreement
may be limited by applicable law and except as the enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement and the Representatives'
Warrant Agreement and the consummation of the transactions herein or therein
contemplated will not violate any provisions of the charter, bylaws or other
organizational document of the Company and will not result in a breach or
violation of any of the terms and provisions of, or constitute, either by itself
or upon notice or the passage of time or both, a default under any bond,
debenture, note or other evidence of indebtedness, or under any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company is a party or by which its
properties or assets may be bound, or any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or over its
properties or assets. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or over its properties
or assets is required for the execution and delivery of this Agreement or the
Representatives' Warrant Agreement and the consummation by the Company of the
transactions herein and therein contemplated, except such as may be required
under the Act or under state or other securities or Blue Sky laws, all of which
requirements have been satisfied.
(e) There is not pending or, to the knowledge of the Company's senior
management, threatened any action, suit, claim or proceeding against the
Company, or any of its officers or any of its properties, assets or rights
before any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or over its officers or properties
or otherwise that (i) individually, or together with any other action, claim or
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proceeding, could result in any material adverse change in the financial
condition, results of operations, or business of the Company or might materially
and adversely affect its properties, assets or rights, (ii) might prevent
consummation of the transactions contemplated hereby or (iii) is required to be
disclosed in the Registration Statement or Prospectus and is not so disclosed;
and there are no agreements, contracts, leases or documents of the Company of a
character required to be described or referred to in the Registration Statement
or Prospectus or to be filed as an exhibit to the Registration Statement by the
Act or the Rules and Regulations or by the Securities Exchange Act of 1934 (the
"Exchange Act") or the rules and regulations of the Commission thereunder that
have not been accurately described in all material respects in the Registration
Statement or Prospectus or filed as exhibits to the Registration Statement.
(f) All outstanding shares of capital stock of the Company (i) have
been duly authorized and validly issued and are fully paid and nonassessable,
assuming the accuracy of the representations and warranties made to the Company
by purchasers of the Company's securities (which representations and warranties
the Company has no reason to believe are not accurate), (ii) have been issued in
compliance with all federal and state securities laws, and (iii) were not issued
in violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities. The authorized and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization" and
conforms to the statements relating thereto contained in the Registration
Statement and the Prospectus under the caption "Description of Capital Stock"
and elsewhere therein (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); the Firm Shares and the
Option Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms of this Agreement,
will be duly and validly issued and fully paid and nonassessable, and will be
sold free and clear of any pledge, lien, security interest, encumbrance, claim
or equitable interest; and no preemptive right, co-sale right, registration
right except as set forth in the Prospectus, right of first refusal or other
similar right of shareholders exists with respect to any of the Firm Shares or
Option Shares or the issuance and sale thereof. No further approval or
authorization of any shareholder or the Board of Directors of the Company or
others is required for the issuance and sale or transfer of the Shares except as
may be required under the Act, the Rules and Regulations or under state or other
securities or Blue Sky laws. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, the Company has no outstanding options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
1998 Stock Option Plan and the options or other rights granted or exercisable
thereunder, set forth in the Prospectus under the caption "Management - 1998
Stock Option Plan" accurately and fairly presents the information required to be
shown with respect to such plan, options and rights under the Act and the Rules
and Regulations and the Company does not have, and has not had, any other stock
option, stock bonus or other stock plan or arrangement.
(g) Xxxxxxx Xxxx Xxxxxxx, which has expressed its opinion with
respect to the financial statements of the Company as of and for the three years
ended December 31, 1998 filed with the Commission as a part of the Registration
Statement, which are included
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in the Prospectus, are independent accountants within the meaning of the Act and
the Rules and Regulations. The audited financial statements of the Company,
together with the related schedules and notes, and the unaudited financial
information, included in the Registration Statement and Prospectus, fairly
present the financial position and the results of operations of the Company at
the respective dates and for the respective periods to which they apply. Such
financial statements of the Company, together with the related schedules and
notes, filed with the Commission as part of the Registration Statement, have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods as certified by Xxxxxxx Xxxx
Xxxxxxx. The selected and summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the audited financial statements
presented therein. No other financial statements or schedules are required to be
included in the Registration Statement.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as specifically
disclosed or contemplated therein, there has not been (i) any material adverse
change in the financial condition, results of operations or business of the
Company, (ii) any transaction that is material to the Company and not in the
ordinary course of business, (iii) any obligation, direct or contingent,
incurred by the Company that is material and adverse to the Company, (iv) any
material change in the capital stock or material and adverse change in the
outstanding indebtedness of the Company, (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company, or (vi) any
loss or damage (whether or not insured) to the property of the Company which has
a material adverse effect on the financial condition, results of operations or
business of the Company.
(i) Except as set forth in the Registration Statement and Prospectus,
(i) the Company has good and marketable title to all properties and assets
described in the Registration Statement and Prospectus as owned by it, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest, (ii) the agreements to which the Company or any of its subsidiaries is
a party described in the Registration Statement are valid agreements,
enforceable by the Company or its subsidiary, as the case may be, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles and, to the
Company's knowledge, the other contracting party or parties thereto are not in
breach or default under any of such agreements, and (iii) the Company and each
of its subsidiaries has valid and enforceable leases for all properties
described in the Registration Statement and Prospectus as leased by it, except
as the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. Except as set
forth in the Registration Statement and Prospectus, the Company owns or leases
all such properties as are necessary to its operations as now conducted and as
described in the Registration Statement and the Prospectus.
(j) Except as set forth in Schedule 2(j), the Company has timely
filed all federal, state, local and foreign tax returns required to be filed by
it and has paid all taxes shown thereon as due, and there is no tax deficiency
that has been or is reasonably likely to be
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asserted against the Company, or all tax liabilities are adequately provided for
on the books of the Company and reflected in the Company's financial statements.
(k) The Company maintains insurance with insurers of recognized
financial responsibility of the types and in the amounts generally deemed
adequate for its business including, but not limited to, insurance covering real
and personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect; the Company has not been
refused any insurance coverage sought or applied for; and the Company does not
have any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not materially and adversely affect the financial condition,
results of operations or business of the Company.
(l) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent. No collective bargaining agreement
exists with any of the Company's employees and, to the knowledge of the Company,
no such agreement is imminent.
(m) Except as disclosed in or specifically contemplated by the
Prospectus, the Company owns or possesses, in each applicable jurisdiction,
adequate licenses or other rights to use all patents, patent rights, trade
secrets (including any unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), mask works, know-how,
inventions, trademarks, copyrights, licenses, service marks and trade names that
are necessary to conduct its businesses as described in the Registration
Statement and Prospectus; the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patents, patent rights, trade secrets,
mask works, know-how, inventions, trademarks, copyrights, licenses, service
marks or trade names; and the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of others
with respect to any patents, patent rights, trade secrets, mask works, know-how,
inventions, trademarks, copyrights, licenses, service marks or trade names.
(n) On the effective date of the Registration Statement, the Common
Stock will be registered pursuant to Section 12(g) of the Exchange Act and will
be approved for quotation on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, Inc. ("NASD") is contemplating terminating such registration or
listing.
(o) The Company has been advised concerning the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it will not become an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the 1940 Act and such rules and regulations.
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(p) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or the date on which Option Shares are to be
purchased, as the case may be, and (ii) completion of the distribution of the
Shares, any offering material in connection with the offering and sale of the
Shares other than any Preliminary Prospectuses, the Prospectus and the
Registration Statement.
(q) The Company has not at any time during the last five (5) years
(i) made any unlawful contribution to any candidate for foreign office or failed
to disclose fully any contribution in violation of law which is required to be
disclosed in the Registration Statement or the Prospectus, or (ii) made any
payment to any foreign, federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof, which is required to be disclosed in the Registration
Statement or the Prospectus. The Company's internal accounting controls and
procedures are sufficient to cause the Company to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as amended.
(r) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization in violation of law or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(s) Each officer, director and director-nominee of the Company and
each beneficial owner of 5% or greater of the Company's Common Stock has agreed
in writing that such person will not, without the prior written consent of
Cruttenden Xxxx Incorporated (which consent may be withheld in its sole
discretion), for a period of 180 days from the date that the Registration
Statement is declared effective by the Commission (the "Lock-up Period"),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation, any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Exchange Act) by such person (collectively, "Securities") or publicly
announce the undersigned's intention to do any of the foregoing. Furthermore,
such person has also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of the
Securities held by such person except in compliance with this restriction. The
Company has provided to counsel for the Underwriters a complete and accurate
list of all shareholders of the Company and the number and type of securities
held by each shareholder. The Company has provided to counsel for the
Underwriters true, accurate and complete copies of all of the agreements
pursuant to which its officers, directors, director-nominees and shareholders
have agreed to such restrictions (the "Lock-up Agreements"). The Company hereby
represents and warrants that it will not release any of its officers, directors
or director-nominees or other shareholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Cruttenden
Xxxx Incorporated, except for pledges and gifts where the pledgee or donee
agrees in writing to be bound by the terms hereof.
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(t) Except as set forth in the Registration Statement and Prospectus,
(i) the Company is in compliance in all material respects with all rules, laws
and regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
that are applicable to its business, (ii) the Company has received no notice
from any governmental authority or third party of an asserted claim under
Environmental Laws and (iii) the Company has no reason to believe that it will
be required to make future capital expenditures to comply with Environmental
Laws; provided, however that the Company's belief is based on current
Environmental Laws and does not take into account the possibility of new
Environmental Laws or amendments to current Environmental Laws.
(u) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, including without limitation cash receipts,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(v) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers,
directors or director-nominees of the Company or any of the members of the
families of any of them of a character and amount required to be disclosed in
the Registration Statement which are not disclosed in the Registration Statement
and Prospectus, nor has any other material transaction occurred between or among
the Company or any of such persons of a character and amount required to be
disclosed in the Registration Statement which are not disclosed in the
Registration Statement and Prospectus.
(w) The Representatives' Warrants have been duly and validly
authorized by the Company and upon delivery to you in accordance with the
Representatives' Warrant Agreement will be duly issued and legal, valid and
binding obligations of the Company.
(x) The Representatives' Warrant Stock has been duly authorized and
reserved for issuance upon the exercise of the Representatives' Warrants and
when issued upon payment of the exercise price therefor will be validly issued,
fully paid and nonassessable shares of Common Stock of the Company.
(y) The Agreement of Merger dated June __, 1998 (the "Agreement of
Merger") between AremisSoft Corporation, a Nevada corporation ("AremisSoft") and
the Company (AremisSoft and the Company are collectively referred to as the
"Constituent Corporations"), has been duly authorized by all necessary board of
director and stockholder action on the part of the Constituent Corporations and
has been duly executed and delivered by each of the parties thereto. The
execution and delivery of the Agreement of Merger and the consummation of the
merger contemplated thereby does not contravene any provision of applicable
federal law, Nevada or Delaware corporate law or the certificate of
incorporation or bylaws of either of the Constituent Corporations or any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
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taken as a whole, or any judgement or decree of any governmental body, agency or
court having jurisdiction over either of the Constituent Corporations, except
for any such contravention that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. No consent, approval,
authorization or order of or qualification with any governmental body or agency
is required for the performance by the Constituent Corporations of their
obligations under the Agreement of Merger except such as have been obtained and
except such consent, approval, authorization, order or qualification that, if
not obtained, would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. The merger contemplated by the Agreement of
Merger is effective under the laws of the State of Nevada and the State of
Delaware.
(z) The Company has not incurred any liability for a fee, commission,
or other compensation on (A) account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement or (B) except as
set forth in a letter from the Company to be delivered to you concurrently
herewith, to any underwriter on account of any offering or agreement to offer
any securities of the Company, whether or not such offering was consummated,
other than as contemplated hereby.
(aa) The Company does not currently sponsor or participate in, and has
never sponsored or participated in, any employee benefit plan, including but not
limited to a pension or welfare plan, which plan is or was ever subject to the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA").
3. [Intentionally Deleted]
4. Representation, Warranties and Agreements of the Underwriters. The
information set forth in the last paragraph on the outside front cover page
(insofar as such information relates to the Underwriters), in the second
paragraph on the inside front cover page, concerning stabilization and
over-allotment by the Underwriters, under the caption "Underwriting" in any
Preliminary Prospectus and in the final form of Prospectus filed pursuant to
Rule 424(b) constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and you, on behalf of the respective Underwriters,
represent and warrant to the Company that the statements made therein do not
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
5. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the
respective number of Firm Shares as hereinafter set forth. The obligation of
each Underwriter to the Company shall be to purchase from the Company that
number of Firm Shares which is set forth opposite the name of such Underwriter
in Schedule A hereto (subject to adjustment as provided in Section 11).
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Delivery of definitive certificates for the Firm Shares to be purchased by
the Underwriters pursuant to this Section 5 shall be made against payment of the
purchase price therefor by the several Underwriters by wire transfer of
immediately available funds to an account designated by the Company, at the
offices of Cruttenden Xxxx Incorporated or such other place as may be agreed
upon among the Representatives and the Company, at 7:00 A.M., California time,
on the third (3rd) full business day following the first day that Shares are
traded (or at such time and date to which payment and delivery shall have been
postponed pursuant to Section 11 hereof), such time and date of payment and
delivery being herein called the "Closing Date." The certificates for the Firm
Shares to be so delivered will be made available to you at such office or such
other location as you may reasonably request for checking at least one (1) full
business day prior to the Closing Date and will be in such names and
denominations as you may request, such request to be made at least two (2) full
business days prior to the Closing Date. If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the Representatives of
the several Underwriters, may (but shall not be obligated unless required under
Section 11 to) make payment of the purchase price on behalf of any Underwriter
or Underwriters whose wire transfer of funds shall not have been received by you
prior to the Closing Date for the Firm Shares to be purchased by such
Underwriter or Underwriters. Any such payment by you shall not relieve any such
Underwriter or Underwriters of any of its or their obligations hereunder.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
hereby grants to the several Underwriters, for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares
only, a nontransferable option to purchase up to an aggregate of 570,000 Option
Shares at the purchase price per share for the Firm Shares set forth in this
Section 5. Such option may be exercised by the Representatives on behalf of the
several Underwriters on one occasion in whole or in part during the forty-five
(45) day period after the date on which the Firm Shares are initially offered to
the public, by giving written notice to the Company. The number of Option Shares
to be purchased by each Underwriter upon the exercise of such option shall be
the same proportion of the total number of Option Shares to be purchased as the
number of Firm Shares purchased by such Underwriter (set forth in Schedule A
hereto) bears to the total number of Firm Shares purchased by the several
Underwriters (set forth in Schedule A hereto), adjusted by the Representatives
in such manner selected by them as to avoid fractional shares.
Delivery of definitive certificates for the Option Shares to be purchased
by the several Underwriters pursuant to the exercise of the option granted by
this Section 5 shall be made against payment of the purchase price therefor by
the several Underwriters by wire transfer of immediately available funds to an
account designated by the Company. Such delivery and payment shall take place at
the offices of Cruttenden Xxxx Incorporated, or at such other place as may be
agreed upon by the Representatives and the Company (i) on the Closing Date, if
written notice of the exercise of such option is received by the Company at
least three (3) full business days prior to the Closing Date, or (ii) on a date
which shall be during the 45 day period after the date on which the Firm Shares
are initially offered to the public and which shall not be later than the fifth
(5th) full business day following the date the Company receives written notice
of the
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exercise of such option, if such notice is received by the Company less than
three (3) full business days prior to the Closing Date.
The certificates for the Option Shares to be so delivered will be made
available to you at such office or such other location as you may reasonably
request for inspection at least two (2) full business days prior to the date of
payment and delivery and will be in such names and denominations as you may
request, such request to be made at least three (3) full business days prior to
such date of payment and delivery. If the Representatives so elect, delivery of
the Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the Representatives of
the several Underwriters, may (but shall not be obligated unless required under
Section 11 to) make payment of the purchase price on behalf of any Underwriter
or Underwriters whose wire transfer of immediately available funds shall not
have been received by you prior to the date of payment and delivery for the
Option Shares to be purchased by such Underwriter or Underwriters. Any such
payment by you shall not relieve any such Underwriter or Underwriters of any of
its or their obligations hereunder.
Upon exercise of any option provided for in this Section 5, the obligations
of the several Underwriters to purchase such Option Shares will be subject (as
of the date hereof and as of the date of payment and delivery for such Option
Shares) to the accuracy of and compliance with the representations, warranties
and agreements of the Company herein, to the accuracy of the statements of the
Company and officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and you
shall have been furnished with all such documents, certificates and opinions as
you may reasonably request in order to evidence the accuracy and completeness of
any of the representations, warranties or statements, the performance of any of
the covenants or agreements of the Company or the compliance with any of the
conditions herein contained in each case in all material respects.
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 13 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
6. Further Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; it will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed; if the Company omitted information
from the
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Registration Statement at the time it was originally declared effective in
reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission; if for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; promptly upon your request, the Company will prepare and
file with the Commission any amendments or supplements to the Registration
Statement or Prospectus which, in the opinion of counsel for the several
Underwriters ("Underwriters' Counsel"), may be necessary or advisable in
connection with the distribution of the Shares by the Underwriters; it will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; in case any Underwriter is required
to deliver a prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Shares, the Company
will prepare promptly upon request, such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act; and
it will file no amendment or supplement to the Registration Statement or
Prospectus which shall not previously have been submitted to you a reasonable
time prior to the proposed filing thereof or to which you shall reasonably
object in writing, subject, however, to compliance with the Act and the Rules
and Regulations and the rules and regulations of the Commission thereunder and
the provisions of this Agreement.
(b) The Company will advise you promptly after it shall have received
notice or obtained knowledge of the issuance of any stop order by the Commission
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued.
(c) The Company will use its best efforts to qualify the Shares for
offering and sale under the securities laws of such jurisdictions, domestic or
foreign, as you may designate and to continue such qualifications in effect for
so long as may be required for purposes of the distribution of the Shares,
except that the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction in which it is not otherwise
required to be so qualified or to so execute a general consent to service of
process. In each jurisdiction in which the Shares shall have been qualified as
above provided, the Company will make and file
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such statements and reports in each year as are or may be reasonably required by
the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available, copies of
the Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments or
supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act (three of which will include all
exhibits) all in such quantities as you may from time to time reasonably
request.
(e) The Company will make generally available to its shareholders as
soon as practicable, but in any event not later than the forty-fifth (45th) day
following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited) complying
with the provisions of Section 11(a) of the Act and covering a twelve (12) month
period beginning after the effective date of the Registration Statement.
(f) During a period of five (5) years after the date hereof, if the
Company is not subject to Section 13 or 15 of the Exchange Act, the Company will
furnish to its shareholders as soon as practicable after the end of each
respective period, annual reports (including financial statements audited by
independent certified public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder, (i) concurrently
with furnishing such reports to its shareholders, statements of operations of
the Company for each of the first three (3) quarters in the form furnished to
the Company's shareholders, (ii) concurrently with furnishing to its
shareholders, a balance sheet of the Company as of the end of such fiscal year,
together with statements of operations, of shareholders' equity, and of cash
flows of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent certified public accountants, (iii)
as soon as they are available, copies of all reports (financial or other) mailed
to shareholders, (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the NASD, (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to shareholders or prepared by the Company, and (vi) any additional
information of a public nature concerning the Company or its business which you
may reasonably request. During such five (5) year period, if the Company shall
have active subsidiaries, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the Company and its
subsidiaries are consolidated, and shall be accompanied by similar financial
statements for any significant subsidiary that is not so consolidated.
(g) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and a registrar (which
may be the same entity) for its Common Stock.
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(i) If at any time during the ninety (90) day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
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 a supplement to or amendment of the Prospectus), the Company will,
if requested by you and if permitted by law, consider the appropriateness of
disseminating a press release or other public statement, the content of which
shall be reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(j) During the Lock-up Period, the Company will not, without the
prior written consent of the Representatives, effect the Disposition of,
directly or indirectly, any Securities other than (i) the sale of the Firm
Shares and the Option Shares hereunder, (ii) the Company's issuance of options
or Common Stock under the Company's presently authorized stock option plans or
restricted stock plans (collectively, the "Option Plans") and (iii) the
Company's issuance of Common Stock pursuant to the exercise or conversion of any
warrant, debenture or other security described in the Registration Statement and
Prospectus which is exercisable or convertible into share of Common Stock.
7. Expenses.
(a) The Company agrees with each Underwriter that:
(i) The Company will pay and bear all costs and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), Preliminary
Prospectuses and the Prospectus, and any amendments or supplements thereto
during the nine month period after the effective date of the Registration
Statement; the printing of this Agreement, the Agreement Among Underwriters, the
Selected Dealer Agreement, the Preliminary Blue Sky Survey and any supplemental
Blue Sky Survey, the Underwriters' Questionnaire and Power of Attorney, and any
instruments related to any of the foregoing; the issuance and delivery of the
Shares hereunder to the several Underwriters, including transfer taxes, if any,
the cost of all certificates representing the Shares and transfer agents' and
registrars' fees; the fees and disbursements of counsel and accountants for the
Company; all fees and other charges of the Company's independent certified
public accountants; the cost of delivery to, or pursuant to the instructions of,
the several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectus and the Prospectus, and any
amendments or supplements to any of the foregoing during the nine month period
after the effective date of the Registration Statement; NASD filing fees; the
cost of qualifying the Shares under the laws of such jurisdictions as you may
designate (including filing fees and fees and disbursements of counsel for the
Underwriters related to such qualification); the cost of listing the Shares on
the Nasdaq National Market; the Company's road show costs and expenses; the cost
of any tombstone advertisement or press release; the cost of preparing bound
volumes of the documents relating to the public offering of Common Stock
contemplated hereby; all costs and expenses associated with retaining a
qualified independent underwriter if required by NASD rules; and all other
expenses directly incurred by the Company in connection with the performance of
its obligations hereunder.
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(ii) In addition to its other obligations under Section 7(a)(i)
hereof, if the Shares are sold pursuant to this Agreement, the Company will pay
to Cruttenden Xxxx Incorporated ("Cruttenden Xxxx") a nonaccountable expense
allowance equal to 1.0% of the aggregate sales price of the Shares to the
public. This nonaccountable expense allowance with respect to the Firm Shares
shall be paid to Cruttenden Xxxx on the Closing Date and the nonaccountable
expense allowance with respect to the Option Shares shall be paid to Cruttenden
Xxxx on the closing of the sale of such Option Shares.
(iii) In addition to its other obligations under Section 9
hereof, the Company agrees that, during the pendency of any claim, action,
investigation, inquiry or other proceeding described in Section 9(a) hereof, it
will reimburse the Underwriters for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding . To the extent that any such
reimbursement payment is held by a court of competent jurisdiction to have been
improper, the Underwriters shall promptly return such payment to the Company
together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) listed from time to time in The Wall Street Journal which represents
the base rate on corporate loans posted by a substantial majority of the
nation's five (5) largest banks (the "Prime Rate"). Any such reimbursement
payments which are not made to the Underwriters within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request.
(b) In addition to their other obligations under Section 9(b) hereof,
the Underwriters severally, and not jointly, agree that, during the pendency of
any claim, action, investigation, inquiry or other proceeding described in
Section 9(b) hereof, they will reimburse the Company for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding. To the extent that
any such reimbursement payment is held by a court of competent jurisdiction to
have been improper, the Company shall promptly return such payment to the
Underwriters together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such reimbursement payments which are not made to the
Company within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request
(c) It is agreed that any controversy arising out of the operation of
the reimbursement arrangements set forth in Sections 7(a)(iii) and 7(b) hereof,
including the amounts of any requested reimbursement payments, the method of
determining such amounts and the basis on which such amounts shall be
apportioned among the reimbursing parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the NASD in Orange
County, California (or as close geographically to Orange County, California as
is reasonably practical). Any such arbitration must be commenced by service of a
written demand for arbitration or a written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the reimbursement provisions contained in Sections 7(a)(iii) and 7(b) hereof and
will not resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses which is created by the
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provisions of Sections 9(a) and 9(b) hereof or the obligation to contribute to
expenses which is created by the provisions of Section 9(d) hereof.
8. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and the
date on which Option Shares are to be purchased, as the case may be, of the
representations and warranties of the Company and the performance by the Company
of its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 2:00 P.M., California time, on the date of this Agreement, or such later
date as shall be consented to in writing by you; and no stop order suspending
the effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issuance, sale and delivery of the Shares,
shall have been reasonably satisfactory to Underwriters' Counsel, and such
counsel shall have been furnished with such documents and information as they
may reasonably have requested to enable them to pass upon the matters referred
to in this Section.
(c) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus, (i)
there shall not have been any change in the capital stock of the Company other
than pursuant to the exercise of outstanding options, warrants or other
convertible securities disclosed in the Registration Statement and Prospectus or
any material adverse change in the indebtedness of the Company, (ii) except as
set forth or contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have been
entered into by the Company, which is not in the ordinary course of business and
which would have a material adverse effect on the Company's business, financial
condition and operating results, (iii) no loss or damage (whether or not
insured) to the property of the Company shall have been sustained which
materially and adversely affects the financial condition, business or results of
operations of the Company, (iv) no legal or governmental action, suit or
proceeding affecting the Company which materially and adversely affects the
Company, or which affects or may affect the transactions contemplated by this
Agreement, shall have been instituted or threatened and (v) there shall not have
been any material change in the financial condition, business, or results of
operations of the Company which makes it impractical or inadvisable in the
reasonable judgment of the Representatives to proceed with the public offering
or purchase the Shares as contemplated hereby.
(d) You shall have received on the Closing Date and on any later date
on which Option Shares are purchased, as the case may be, an opinion from each
of Xxxxxx Eng Linn & Xxxxxxxx, general counsel to the Company, and Pillsbury
Madison & Sutro LLP, special counsel for the Company, (which opinion of special
counsel need not include subparagraphs (ii),
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(iii), (iv) or (xx) below) dated the Closing Date or such later date on which
Option Shares are purchased, addressed to the Underwriters (and stating that
subparagraphs (v), (viii), (ix), (xi), (xvii) and (xviii) may be relied upon by
Underwriters' Counsel in rendering its opinion pursuant to Section 8(j) of this
Agreement) and with reproduced copies or signed counterparts thereof for each of
the Underwriters, substantially to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation;
(ii) The Company has full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement;
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each United States jurisdiction, if any,
in which the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse effect on the
financial condition results of operations or business of the Company taken as a
whole. To such counsel's knowledge, Company has no subsidiaries or other than as
listed in Exhibit 21 to the Registration Statement;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization";
all outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable, and, to such counsel's
knowledge, have not been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or other
similar right; without limiting the foregoing, to such counsel's knowledge,
there are no preemptive or other rights to subscribe for or purchase any of the
Shares;
(v) The certificates evidencing the Shares to be delivered
hereunder are in due and proper form under Delaware law and when duly
countersigned by the Company's transfer agent and registrar and delivered to the
Underwriters against payment of the agreed compensation in accordance with this
Agreement, the Firm Shares and the Option Shares, represented thereby will be
duly and validly issued and fully paid and nonassessable, and will not have been
issued in violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
shareholders and will conform in all respects to the description thereof in the
Registration Statement;
(vi) the Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by it hereunder;
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(vii) The Company has the corporate power and authority to enter
into the Representatives' Warrant Agreement and to issue, sell and deliver to
the Representatives the Representatives' Warrants to be issued and sold by it
thereunder;
(viii) Each of this Agreement, the Representatives' Warrant
Agreement and the Representatives' Warrants has been duly authorized by all
necessary corporate action on the part of the Company and has been duly executed
and delivered by the Company and, assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except insofar as indemnification and contribution
provisions may be limited by applicable law and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general equitable
principles;
(ix) The Registration Statement has become effective under the
Act and, 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 are pending or threatened under the Act;
(x) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements and notes
thereto, the financial statement schedules and other financial or statistical
data included therein as to which such counsel need express no opinion), as of
the effective date of the Registration Statement, complied as to form in all
material respects with the requirements of the Act and the applicable Rules and
Regulations;
(xi) The statements in the Registration Statement and Prospectus
in the Sections captioned "Management--1998 Stock Option Plan,"
"Management--Employment Agreements," "Management--Compensation Committee
Interlocks and Insider Participation," "Management--Limitation of Liability and
Indemnification Matters," "Certain Transactions," "Description of Capital Stock"
and "Shares Eligible For Future Sale," in each case insofar as such statements
reflect a summary of the material legal matters or documents referred to
therein, are accurate and fairly present the information required to be
disclosed therein (other than the financial statements and notes thereto, the
financial statement schedules and other financial or statistical data included
therein as to which such counsel need express no opinion);
(xii) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes are accurate
and fairly present the information required to be presented by the Act and the
applicable Rules and Regulations and the Company is not in violation of its
charter or bylaws, or other organizational documents;
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(xiii) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement that are
not described or referred to therein or filed as required;
(xiv) The execution and delivery of this Agreement and the
Representatives' Warrant Agreement and the performance by the Company of its
obligations hereunder and thereunder will not (a) result in any violation of the
Company's charter, bylaws or other organizational documents, or (b) result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under, any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which the
Company is a party or by which its properties are bound, of which such counsel
has knowledge except for any breach, violation or default which would not,
singly or in the aggregate, have a material adverse effect on the business of
the Company and its subsidiaries taken as a whole or any applicable United
States federal, state or local statute, rule or regulation or, to such counsel's
knowledge, any order, writ or decree of any United States federal, state or
local court, government or governmental agency or body having jurisdiction over
the Company or over any of its properties or operations;
(xv) No consent, approval, authorization or order of or
qualification with any United States federal, state or local court, government
or governmental agency or body having jurisdiction over the Company or over any
of its properties or operations is necessary in connection with the consummation
by the Company of the transactions contemplated in this Agreement and the
Representatives' Warrant Agreement, except such as have been obtained under the
Act or such as may be required under state or other securities or Blue Sky laws
in connection with the purchase and the distribution of the Shares by the
Underwriters;
(xvi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company of a
character required to be disclosed in the Registration Statement or the
Prospectus by the Act or the Rules and Regulations or by the Exchange Act or the
applicable rules and regulations of the Commission thereunder, other than those
described therein;
(xvii) The Representatives' Warrants have been duly and validly
authorized by the Company and upon delivery to the Representatives in accordance
with the Representatives' Warrant Agreement will be duly issued and legal, valid
and binding obligations of the Company;
(xviii) The Representatives' Warrant Stock to be issued by the
Company pursuant to the terms of the Representatives' Warrant has been duly
authorized and reserved, and, upon issuance and delivery against payment
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therefor in accordance with the terms of the Representatives' Warrant Agreement,
will be duly and validly issued and fully paid and nonassessable, and to such
counsel's knowledge, will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first refusal or
other similar right of shareholders;
(xix) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or other
securities of the Company have registration rights with respect to securities of
the Company that have not been waived;
(xx) The offer and sale of all securities of the Company made
within the last three years as set forth in Item 15 of the Registration
Statement were exempt from the registration requirements of the Securities Act,
pursuant to the provisions set forth in such Item, and from the registration or
qualification requirements of all relevant state securities laws; and the
statements in Items 14 and 15 of the Registration Statement insofar as they
constitute matters of law or legal conclusions or are descriptions of contracts,
agreements or other documents are accurate and complete in all material respects
and fairly present the information contained therein;
(xxi) The Company has satisfied the conditions for use of Form
S-1 as set forth in the General Instructions thereto;
(xxii) No transfer taxes are required to be paid in connection
with the sale and delivery of the Shares to the Underwriters;
(xxiii) The Agreement of Merger between AremisSoft and the
Company has been duly authorized by all necessary board of director and
stockholder action on the part of the Constituent Corporations and has been duly
executed and delivered by each of the parties thereto. The execution and
delivery of the Agreement of Merger and the consummation of the merger
contemplated thereby does not contravene any provision of applicable federal
law, Nevada or Delaware corporate law or the certificate of incorporation or
bylaws of either of the Constituent Corporations or, to such counsel's
knowledge, any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or to such counsel's knowledge, any judgement or decree of any
governmental body, agency or court having jurisdiction over either of the
Constituent Corporations, except for any such contravention that would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
No consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Constituent
Corporations of their obligations under the Agreement of Merger except such as
have been obtained and except such consent, approval, authorization, order or
qualification that, if not obtained, would not have a material adverse effect on
the Company and its subsidiaries,
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taken as a whole. The merger contemplated by the Agreement of Merger is
effective under the laws of the State of Nevada and the State of Delaware; and
(xxiv) Neither the Company nor any of its subsidiaries is an
"investment company" or a person "controlled by" an "investment company" within
the meaning of the 1940 Act.
In addition, such counsel shall state that such counsel has participated in
conferences with officials and other representatives of the Company, the
Representatives, Underwriters' Counsel and the independent certified public
accountants of the Company, at which the contents of the Registration Statement
and Prospectus and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel that leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date and on any later date on which Option Shares are purchased, the
Registration Statement and any amendment or supplement thereto, when such
documents became effective or were filed with the Commission (other than the
financial statements and notes thereto, the financial statement schedules and
other financial or statistical data and supporting schedules included in the
Registration Statement as to which such counsel need express no comment)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that at the Closing Date or the date on which the Option
Shares are purchased, as the case may be, the Registration Statement, the
Prospectus and any amendment or supplement thereto (other than the financial
statements and notes thereto, the financial statement schedules or other
financial or statistical data included therein as to which such counsel need
express no comment) contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Each of such co-counsel shall also provide an opinion, addressed and as of
the dates set forth in the first paragraph of this Section 8(d), to the same
general effect as clauses (i), (ii), (iii) and (iv) of this Section 8(d) in
respect of each direct and indirect United States subsidiary of the Company that
is a significant subsidiary as defined by the Commission.
Counsel rendering the foregoing opinions may rely as to questions of law
not involving the laws of the United States upon opinions of local counsel, and
as to questions of fact upon representations or certificates of officers of the
Company, and of government officials, in which case its opinion is to state that
they are so relying and that they have no knowledge of any material misstatement
or inaccuracy in any such opinion, representation or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters.
(e) You shall have received from Xxxxxx & Co., counsel for LK Global
Software Engineering (India) Private Limited ("LK Global (India)"), a favorable
opinion dated the Closing Date addressed to the Underwriters and with reproduced
copies or signed counterparts thereof for each of the Underwriters, and
satisfactory to the Representatives and the Underwriters' Counsel substantially
to the effect that:
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(i) LK Global (India) has been duly organized and is (A) validly
existing as a private company limited by shares in good standing under the laws
of India and (B) able to transact business as described in the Prospectus in
India;
(ii) LK Global (India) has __________ shares of capital stock
authorized, __________ of which are issued and outstanding; all necessary and
proper corporate proceedings have been taken in order to authorize validly such
authorized capital stock; all outstanding shares of such capital stock have been
duly and validly issued, are fully paid and nonassessable, have been issued in
compliance with Indian law and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any securities;
(iii) All of the outstanding shares of capital stock of, or other
ownership interests in, LK Global (India) are owned by LK Global Information
Systems BV ("LK Global BV")[, except one share held by __________, one of the
directors of LK Global (India), as nominee shareholder of LK Global BV], free
and clear of any security interest, claim, lien, encumbrance or adverse interest
of any nature, except for the security interest existing in favor of Barclays
Bank plc and Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
commitments or claims of any character relating to, any of LK Global (India)'s
capital stock or any shares of stock or securities that are convertible or
exchangeable or exercisable for such capital stock; and
(v) The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby will not result in
a breach of, or constitute a default under, any material indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement, lease, franchise,
license or other material agreement or instrument to which LK Global (India) is
a party or by which any of its properties may be bound, or violate any statute,
judgment, decree, order, rule or regulation known to such counsel of any court
or governmental body having jurisdiction over LK Global (India) or any of its
properties and to such counsel's knowledge, no approval, authorization, order or
consent of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this Agreement
or the consummation by the Company of the transactions contemplated herein,
except as have been made or obtained.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of LK Global (India) and of governmental officials,
in which case their opinion shall state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates shall be attached to the opinion.
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(f) You shall have received from Xxxxxxx & Co, counsel for LK Global
Information Systems (UK) Plc, LK Global Healthcare Systems (UK) Ltd, LK Global
Hospitality Systems (UK) Ltd, LK Global Field Engineering Systems (UK) Ltd, LK
Global Manufacturing Systems (UK) Ltd, LK Global Construction Systems (UK) Ltd,
Briter Computer Systems Limited, LK Global Financial Systems (UK) Limited, LK
Global Software Engineering (UK) Limited and LK Global Human Resources (UK)
Limited (collectively, the "UK Subsidiaries"), a favorable opinion dated the
Closing Date addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters, and satisfactory to the
Representatives and the Underwriters' Counsel substantially to the effect that:
(i) Each of the UK Subsidiaries is a company (A) duly
incorporated and registered under the laws of England and (B) able to transact
business as described in the Prospectus in England and Wales;
(ii) Each of the UK Subsidiaries has the corporate power and
authority necessary to own freehold and leasehold properties and to conduct the
businesses described in the Registration Statement and the Prospectus;
(iii) Based on an examination of the Register of Members of each
of the UK Subsidiaries all of the issued shares of the UK Subsidiaries are
legally owned by the companies and persons listed in the Schedule to such
opinion and such shares are not subject to any third party adverse claims or
rights, except for the security interest existing in favor of Barclays Bank plc
and Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
commitments or claims of any character relating to, any of the issued or
authorized share capital of each of the UK Subsidiaries or any shares, stock or
securities that are convertible into or exchangeable for such share capital; and
(v) The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby, the offering for
sale, sale and issuance by the Company of the Shares to be sold by the Company
pursuant to this Agreement do not require any authorization, consent, approval
or notice by any of the UK Subsidiaries or the Company to any court or
administrative or governmental body administering the laws of England applicable
therein and do not (A) conflict with or result in a breach of the terms of, (B)
constitute a default under or (C) result in a violation of, the Memorandum and
Articles of Association of any of the UK Subsidiaries, or the laws of England,
any regulations enacted thereunder and any policies of any administrative or
governmental body administering same in each case binding on the UK
Subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of the UK Subsidiaries and of governmental
officials, in which case their opinion shall state that they are so doing and
that the Underwriters are justified in relying
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on such opinions or certificates and copies of said opinions or certificates
shall be attached to the opinion.
(g) You shall have received from __________, counsel for LK Global
BV, a favorable opinion dated the Closing Date addressed to the Underwriters and
with reproduced copies or signed counterparts thereof for each of the
Underwriters, and satisfactory to the Representatives and the Underwriters'
Counsel substantially to the effect that:
(i) LK Global BV is (A) duly incorporated, validly existing and
in good standing under the laws of The Netherlands and (B) able to transact
business as described in the Prospectus in The Netherlands;
(ii) LK Global BV has a share capital of __________; all
necessary and proper corporate proceedings have been taken in order to validly
authorize such capital stock; all outstanding shares of such capital stock have
been duly and validly issued, are fully paid and nonassessable, have been issued
in compliance with Dutch law, and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase any
securities;
(iii) All of the outstanding shares of capital stock of, or other
ownership interests in, LK Global BV are owned by [the Company] free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature, except for the security interest existing in favor of Barclays Bank plc
and Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
commitments or claims of any character relating to, any of LK Global BV's
capital stock or any shares of stock or securities that are convertible or
exchangeable or exercisable for such capital stock, except for that certain
Warrant Agreement between LK Global BV and Barclays De Zoete Wedd Limited; and
(v) The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby will not (A)
conflict with or result in breach of terms of, (B) constitute a default under,
(C) result in the creation of any lien, mortgage or security interest upon LK
Global BV's capital stock or assets pursuant to, (D) result in a violation of,
or (E) require any authorization, consent, approval or exemption by or notice to
any court or administrative or governmental body pursuant to, the charter,
by-laws or other organizational document of LK Global BV, any applicable law,
statute, rule or regulation to which LK Global BV is subject, or any agreement,
indenture, instrument, order, judgment or decree by which LK Global BV is bound.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of LK Global BV and of governmental officials, in
which case their opinion shall state that they are so doing and that the
Underwriters are justified in relying on
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such opinions or certificates and copies of said opinions or certificates shall
be attached to the opinion.
(h) You shall have received from __________, counsel for AremisSoft
(Cyprus) Limited, a favorable opinion dated the Closing Date addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for each
of the Underwriters and satisfactory to the Representatives and the
Underwriters' Counsel substantially to the effect that:
(i) AremisSoft (Cyprus) Limited is (A) a corporation duly
incorporated, validly existing and in good standing under the laws of Cyprus and
(B) able to transact business as described in the Prospectus in Cyprus;
(ii) AremisSoft (Cyprus) Limited has __________ shares of capital
stock authorized, __________ of which are issued and outstanding; all necessary
and proper corporate proceedings have been taken in order to authorize validly
such authorized capital stock; all outstanding shares of such capital stock have
been duly and validly issued, are fully paid and nonassessable, have been issued
in compliance with Cyprus law, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase any securities;
(iii) All of the outstanding shares of capital stock of, or other
ownership interests in, AremisSoft (Cyprus) Limited are owned by LK Global BV,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, except for the security interest existing in favor of
Barclays Bank plc and Barclays De Zoete Wedd Limited; and
(iv) There are no outstanding options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
commitments or claims of any character relating to, any of AremisSoft (Cyprus)
Limited capital stock or any shares of stock or securities that are convertible
or exchangeable or exercisable for such capital stock; and
(v) The execution and delivery of this Agreement by the Company
and the consummation of the transactions contemplated hereby will not (A)
conflict with or result in a breach of terms of, (B) constitute a default under,
(C) result in the creation of any lien, mortgage or security interest upon
AremisSoft (Cyprus) Limited's capital stock or assets pursuant to, (D) result in
a violation of, or (E) require any authorization, consent, approval or exemption
by or notice to any court or administrative or governmental body pursuant to,
the charter, by-laws or other organizational document of AremisSoft (Cyprus)
Limited, any applicable law, statute, rule or regulation to which AremisSoft
(Cyprus) Limited is subject, or any agreement, indenture, instrument, order,
judgment or decree by which AremisSoft (Cyprus) Limited is bound.
In rendering such opinion, such counsel may rely as to matters of fact, on
certificates of the officers of AremisSoft (Cyprus) Limited and of governmental
officials, in which case their opinion shall state that they are so doing and
that the Underwriters are justified
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in relying on such opinions or certificates and copies of said opinions or
certificates shall be attached to the opinion.
(i) [intentionally deleted]
(j) You shall have received on the Closing Date and on any later date
on which Option Shares are purchased, as the case may be, an opinion of Loeb &
Loeb LLP in form and substance satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal matters relating
to this Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may have requested for the purpose of enabling them to pass upon such
matters.
(k) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, a letter from
Xxxxxxx Xxxx Xxxxxxx, addressed to the Company and the Underwriters, dated the
Closing Date or such later date on which Option Shares are purchased, as the
case may be, confirming that they are independent certified public accountants
with respect to the Company within the meaning of the Act and the applicable
published Rules and Regulations and based upon the procedures described in such
letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
three (3) business days prior to the Closing Date or such later date on which
Option Shares are to be purchased, as the case may be, (i) confirming, to the
extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the Closing Date or such later date on which Option
Shares are to be purchased, as the case may be, and (ii) setting forth any
revisions and additions to the statements and conclusions set forth in the
Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to reflect
the availability of more recent financial statements, data or information. The
letter shall not disclose any change in the condition (financial or otherwise),
earnings, operations or business of the Company from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter shall be addressed to or for the use of the
Underwriters in form and substance satisfactory to the Underwriters and shall
(i) represent, to the extent true, that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations, (ii) set forth its opinion with
respect to its examination of the balance sheets of the Company as of December
31, 1998 and 1997 and related statements of operations, shareholders' equity,
and cash flows for the years ended December 31, 1998, 1997 and 1996 and (iii)
address other matters agreed upon by Xxxxxxx Xxxx Xxxxxxx and you. In addition,
you shall have received from Xxxxxxx Xxxx Xxxxxxx (i) a letter addressed to the
Company and made available to you for the use of the Underwriters stating that
its review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of its examination of the
Company's financial statements as of December 31, 1998, did not disclose any
weaknesses in internal controls that they considered to be material weaknesses
and (ii) a letter addressed to you addressing other matters agreed upon by
Xxxxxxx Xxxx Xxxxxxx and you which letter shall be satisfactory to you in form
and substance.
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(l) You shall have received on the Closing Date and on the date on
which Option Shares are purchased, as the case may be, a certificate of the
Company, dated the Closing Date or such later date on which Option Shares are to
be purchased, as the case may be, signed by the Chief Executive Officer and
Chief Financial Officer of the Company, to the effect that, and you shall be
satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on and as of
the Closing Date or the date on which Option Shares are to be purchased, as the
case may be, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied, at or prior to the
Closing Date or the date on which Option Shares are to be purchased, as the case
may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to their knowledge, are pending or threatened under the Act;
(iii) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained all material information required to be included therein by
the Act and the Rules and Regulations or the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as the case may be, and in
all material respects conformed to the requirements of the Act and the Rules and
Regulations or the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, the Registration Statement, and any
amendment or supplement thereto, did not and does not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, the
Prospectus, and any amendment or supplement thereto, did not and does not
include any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required to be set forth in
an amended or supplemented Prospectus that has not been so set forth; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, there has not been (a)
any material adverse change in the financial condition results of operations or
business of the Company, (b) any transaction that is material to the Company,
(c) any obligation, direct or contingent incurred by the Company, that is
material to the Company, (d) any material change in the capital stock or
material and adverse change in the outstanding
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indebtedness of the Company, (e) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, or (f) any loss or
damage (whether or not insured) to the property of the Company which has a
material adverse effect on the financial condition results of operations or
business of the Company.
(m) The Company shall have obtained and delivered to you an agreement
from each officer, director and director-nominee of the Company, and each
beneficial or record owner of 5% or greater of the Company's issued and
outstanding shares of Common Stock, in writing prior to the date hereof that
such person will not, during the Lock-up Period, effect the Disposition of any
Securities now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a distribution
to limited partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Cruttenden Xxxx
Incorporated. The foregoing restriction is expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-up Period, even if such Securities would be disposed
of by someone other than the such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person shall have also agreed and consented to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of the Securities held by such person except in compliance with
this restriction.
(n) The Company shall have furnished to you such further certificates
and documents as you shall reasonably request, including certificates of
officers of the Company as to the accuracy of the representations and warranties
of the Company, as to the performance by the Company of its obligations
hereunder and as to the other conditions concurrent and precedent to the
obligations of the Underwriters hereunder.
(o) The Representatives' Warrant Agreement shall have been entered
into by the Company and you, and the Representatives' Warrants shall have been
issued and sold to you pursuant thereto.
(p) The Company shall have repaid or made irrevocable arrangements
satisfactory to the Underwriters to repay immediately after the Closing Date all
indebtedness outstanding, including principal, interest and any related
premiums, fees or charges, under the Company's bank credit facilities, which may
be repaid using the net proceeds received from the sale of the Shares. The
Underwriters shall have received an acknowledgment from each of Barclays Bank
plc and Barclays De Zoete Wedd Limited to the effect that all outstanding
indebtedness of the Company to them, including principal, interest and any
related premiums, fees or charges, has been repaid in full and all security
interests of the Company or its subsidiaries in favor of such banks have been
released.
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All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
9. 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 (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" within the meaning of Schedule E of the Bylaws of the NASD), under
the Act, the Exchange Act or otherwise, specifically including, but not limited
to, losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, or any failure of the Company to perform its
obligations hereunder, or (ii) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and agrees to reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending 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,
any Preliminary Prospectus or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company as described in
Section 4 hereof, and, provided further, that the indemnity agreement provided
in this Section 9(a) with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any losses,
claims, damages, liabilities or actions based upon any untrue statement or
alleged untrue statement of material fact or omission or alleged omission to
state therein a material fact purchased Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 6(d) hereof.
The indemnity agreement in this Section 9(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter within the meaning of the Act or the Exchange Act.
This indemnity agreement shall be in addition to any liabilities which the
Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under the
Act or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
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statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, 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 as described in Section 4 hereof, and agrees to reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action.
The indemnity agreement in this Section 9(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer of the
Company who signed the Registration Statement and each director of the Company
(or nominee for director set forth in the Registration Statement or Prospectus
or any amendment or supplement thereto) and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act. This indemnity
agreement shall be in addition to any liabilities which each Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 9, notify the indemnifying party in writing of the commencement
thereof but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise than
under this Section 9. In case any such action is brought against any indemnified
party, and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, 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 legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party which pose a
conflict of interest for such counsel, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of the indemnifying party's election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 9(a)
or 9(b) hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the
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action or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
In no event shall any indemnifying party be liable in respect of any amounts
paid in settlement of any action unless the indemnifying party shall have
approved the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such indemnification.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 9
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Underwriters
severally and not jointly are responsible pro rata for the portion represented
by the percentage that the underwriting discount bears to the initial public
offering price, and the Company is responsible for the remaining portion,
provided, however, that (i) no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter, (ii) the Company shall not be required to contribute any
amount in excess of the relative benefits received by the Company from the
offering of the Shares, and (iii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 9(d) shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls the Underwriters or the Company within the meaning
of the Act or the Exchange Act and each officer of the Company who signed the
Registration Statement and each director of the Company (or nominee for director
set forth in the Registration Statement or Prospectus or any amendment or
supplement thereto).
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 9, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act. The parties are advised that federal or state public policy, as interpreted
by the courts in certain jurisdictions, may be contrary to certain of the
provisions of this Section 9.
10. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and the Underwriters herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Sections 7
and 9 and hereof shall remain operative and in
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full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person within the meaning of the Act or the
Exchange Act, or by or on behalf of the Company or any of its officers,
directors or controlling persons within the meaning of the Act or the Exchange
Act, and shall survive the delivery of the Shares to the several Underwriters
hereunder or termination of this Agreement.
11. Substitution of Underwriters. If any Underwriter or Underwriters shall
fail to take up and pay for the number of Firm Shares agreed by such Underwriter
or Underwriters to be purchased hereunder upon tender of such Firm Shares in
accordance with the terms hereof, and if the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed 10% of the Firm Shares, the remaining Underwriters
shall be obligated, severally in proportion to their respective commitments
hereunder, to take up and pay for the Firm Shares of such defaulting Underwriter
or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate number of
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
to take up and pay for exceeds 10% of the Firm Shares, the remaining
Underwriters shall have the right, but shall not be obligated, to take up and
pay for (in such proportions as may be agreed upon among them) the Firm Shares
which the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four (24) hours to allow the several Underwriters the privilege of
substituting within twenty-four (24) hours (including non-business hours)
another underwriter or underwriters (which may include any nondefaulting
Underwriter) satisfactory to the Company. If no such underwriter or underwriters
shall have been substituted as aforesaid by such postponed Closing Date, the
Closing Date may, at the option of the Company, be postponed for a further
forty-eight (48) hours, if necessary, to allow the Company the privilege of
finding another underwriter or underwriters, satisfactory to you, to purchase
the Firm Shares which the defaulting Underwriter or Underwriters so agreed but
failed to purchase. If it shall be arranged for the remaining Underwriters or
substituted underwriter or underwriters to take up the Firm Shares of the
defaulting Underwriter or Underwriters as provided in this Section 11, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven (7) full business 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 promptly to
file any amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the respective number
of Firm Shares to be purchased by the remaining Underwriters and substituted
underwriter or underwriters shall be taken as the basis of their underwriting
obligation. If the remaining Underwriters shall not take up and pay for all such
Firm Shares so agreed to be purchased by the defaulting Underwriter or
Underwriters or substitute another underwriter or underwriters as aforesaid and
the Company shall not find or shall not elect to seek another underwriter or
underwriters for such Firm Shares as aforesaid, then this Agreement shall
terminate.
In the event of any termination of this Agreement pursuant to the preceding
paragraph of this Section 11, the Company shall not be liable to any Underwriter
(except for the
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actual accountable out-of-pocket expenses of the Underwriters and as provided in
Section 9 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company and the other
Underwriters for damages, if any, resulting from such default) be liable to the
Company (except to the extent provided in Section 9 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 11.
12. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier of (i) 6:30
A.M., California time, on the second full business day following the effective
date of the Registration Statement, or (ii) the time of the initial public
offering of any of the Shares by the Underwriters after the Registration
Statement becomes effective. The time of the initial public offering shall mean
the time of the release by you, for publication, of the first newspaper
advertisement relating to the Shares, or the time at which the Shares are first
generally offered by the Underwriters to the public by letter, telephone,
telegram or telecopy, whichever shall first occur.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the Closing Date or on or prior to any later date on
which Option Shares are purchased, as the case may be, (i) if the Company shall
have failed, refused or been unable to perform any agreement on its part to be
performed unless such failure or refusal is on account of the default or
omission of any Underwriter, or (ii) because any other condition to the
Underwriters' obligations hereunder is not satisfied (unless the reason for
failure to satisfy the condition is on account of the default or omission of any
Underwriter, or (iii) if additional material and adverse governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
exchange or in the over the counter market by the NASD, or if a banking
moratorium shall have been declared by federal, New York or California
authorities, or (iv) if the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as to interfere
substantially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured, or (v) if there
shall have been a material adverse change in the general political or economic
conditions or financial markets as in your reasonable judgment makes it
inadvisable or impracticable to proceed with the offering, sale and delivery of
the Shares, or (vi) if there shall have been an outbreak or escalation of
hostilities or of any other insurrection or armed conflict or the declaration by
the United States of a national emergency which, in the reasonable opinion of
the Representatives, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. Any termination
pursuant to any of subparagraphs (i) through (vi) above shall be without
liability of any party to any other party except as provided in Section
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9 hereof and except that the Company shall reimburse the Underwriters for their
actual accountable out-of-pocket expenses.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 12, you shall promptly
notify the Company by telephone or facsimile, in each case confirmed by letter.
If the Company shall elect to prevent this Agreement from becoming effective,
the Company shall promptly notify you by telephone or facsimile, in each case,
confirmed by letter.
13. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to any of the
several Underwriters shall be mailed, delivered or facsimiled (and confirmed by
letter) to you c/o Cruttenden Xxxx Incorporated, 00000 Xxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxxxx
Xxxxxxx; if sent to the Company, such notice shall be mailed, delivered or
facsimiled (and confirmed by letter) to AremisSoft Corporation, 00 Xxxxxxxxxxx,
Xxxxxx XX0X 0XX, Xxxxxxx, facsimile number 011-44-171-309-1501, Attention: Dr.
Lycourgos X. Xxxxxxxxx with a copy to Xxxxx X. Xxxxxx, Esq., Xxxxxx Eng Xxxx &
Xxxxxxx, 000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, and Xxxxxxxx Xxxx
Xxxxxxxx, Esq., Pillsbury Madison & Sutro LLP, 000 Xxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxxx, XX 00000.
14. Parties. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or corporation,
other than the parties hereto and their respective executors, administrators,
successors and assigns, and their controlling persons within the meaning of the
Act or the Exchange Act, officers and directors referred to in Section 9 hereof,
any legal or equitable right, remedy or claim in respect of this Agreement or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective executors, administrators,
successors and assigns and said controlling persons and said officers and
directors, and for the benefit of no other person or corporation. No purchaser
of any of the Shares from any Underwriter shall be construed a successor or
assign by reason merely of such purchase. The Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and the Company shall be entitled to
act and rely upon any statement, request, notice or agreement made or given by
you on behalf of each of the several Underwriters.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
16. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
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If the foregoing correctly sets forth the understanding among the Company
and the several Underwriters, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
the Company and the several Underwriters.
Very truly yours,
AREMISSOFT CORPORATION
By:
-----------------------------------
Name:
Title:
Accepted as of the date first above written:
CRUTTENDEN XXXX INCORPORATED
FIRST ALBANY CORPORATION
On their behalf and on behalf of each of the several Underwriters named in
Schedule A hereto.
By: CRUTTENDEN XXXX INCORPORATED
By:
------------------------------
Name:
Title:
By: FIRST ALBANY CORPORATION
By:
------------------------------
Name:
Title:
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SCHEDULE A
Underwriters Number of Firm Shares
To Be Purchased
Cruttenden Xxxx Incorporated...........................
First Albany Corporation...............................
Total..............................................
==========
3,800,000
