EXHIBIT 1.1
3,000,000 Shares of Common Stock
DRS TECHNOLOGIES, INC.
UNDERWRITING AGREEMENT
December __, 2001
BEAR, XXXXXXX & CO. INC.
on behalf of,
BEAR, XXXXXXX & CO. INC.
FIRST UNION SECURITIES, INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DRS Technologies, Inc., a corporation organized and existing under
the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 3,000,000 shares (the
"Firm Shares") of its common stock, par value $0.01 per share (the "Common
Stock"). The Company and the stockholders of the Company listed on Schedule II
hereto (the "Selling Stockholders") propose to sell, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, at the
option of the Underwriters, up to an additional 450,000 shares (the "Additional
Shares") of Common Stock. The Firm Shares and any Additional Shares purchased by
the Underwriters are referred to herein as the "Shares." The Shares are more
fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-73912), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares which registration statement, as so amended (including
post-effective amendments, if any), has
been declared effective by the Commission and copies of which have heretofore
been delivered to the Underwriters. The registration statement, as amended at
the time it became effective, including the exhibits and information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A or 434(d) under the Securities Act, is hereinafter
referred to as the "Registration Statement." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Securities Act registering additional shares of Common
Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement. Other than a Rule
462(b) Registration Statement, which became effective upon filing, no other
document with respect to the Registration Statement has heretofore been filed
with the Commission. No stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or, threatened
by the Commission. The Company, if required by the Exchange Act and rules and
regulations of the Commission (together, the "Rules and Regulations"), proposes
to file the Prospectus with the Commission pursuant to Rule 424(b) of the Rules
and Regulations. The Prospectus, in the form in which it is to be filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the
Prospectus is not to be filed with the Commission pursuant to Rule 424(b), the
Prospectus in the form included as part of the Registration Statement at the
time the Registration Statement became effective, is hereinafter referred to as
the "Prospectus," except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Shares (the "Offering") which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
(i) the filing of any document under the Exchange Act after the effective date
of the Registration Statement, the date of such preliminary prospectus or the
date of the Prospectus, as the case may be, which is incorporated therein by
reference and (ii) any such document so filed. All references in this Agreement
to the Registration Statement, the Rule 462(b) Registration Statement, the
Preliminary Prospectus and the Prospectus,
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or any amendments or supplements to any of the foregoing, shall be deemed to
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX").
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) or Rule 434 of the Regulations, when any supplement to
or amendment of the Prospectus is filed with the Commission, when any document
filed under the Exchange Act was or is filed and at the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Securities Act and the Rules and Regulations and
did not and will not contain an untrue statement of a material fact and did not
and will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein (i) in the case of the
Registration Statement, not misleading and (ii) in the case of the Prospectus or
any related Preliminary Prospectus in light of the circumstances under which
they were made, not misleading. When any related preliminary prospectus was
first filed with the Commission (whether filed as part of the registration
statement for the registration of the Shares or any amendment thereto or
pursuant to Rule 424(a) of the Rules and Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and Regulations and the Exchange Act and the
respective rules and regulations thereunder and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under which they were made not misleading.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related Preliminary Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through you specifically for use therein ("Underwriters'
Information"). The parties acknowledge and agree that the Underwriters
Information consists solely of the material included in paragraphs 3, 14 and 15
under the caption "Underwriting" in the Prospectus. If Rule 434 is used, the
Company will comply with the requirements of Rule 434.
(c) KPMG LLP and Deloitte & Touche LLP, who have each
certified financial statements and supporting schedules included or incorporated
in the Registration Statement, each are independent public accountants as
required by the Securities Act and the Rules and Regulations.
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(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, the Company has not
paid any dividends on its capital stock and there has been no material adverse
change or any development involving a prospective material adverse change on (i)
the business, prospects, properties, operations, condition (financial or other),
stockholders' equity (investment) or results of operations of the Company and
each subsidiary of the Company listed on Exhibit 21 of the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 2001 (the
"Subsidiaries"), taken as a whole; or (ii) the long-term debt or capital stock
of the Company (other than pursuant to the exercise of stock options described
in the Registration Statement and the Prospectus as outstanding or the grant of
stock options under stock option plans described in the Registration Statement
and the Prospectus), whether or not arising from transactions in the ordinary
course of business, and since the date of the latest balance sheet presented in
the Registration Statement and the Prospectus, neither the Company nor any of
the Subsidiaries has incurred or undertaken any liabilities or obligations,
direct or contingent, or entered into any transactions which are material to the
Company and the Subsidiaries taken as a whole, except for liabilities or
obligations which are reflected in the Registration Statement and the
Prospectus.
(e) This Agreement and the transactions contemplated herein
have been duly and validly authorized by the Company and this Agreement has been
duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
(i) conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement, instrument, franchise, license or permit to which
the Company or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or their respective properties or assets may be bound and
which is material to the business of the Company and the Subsidiaries taken as a
whole, or (ii) violate or conflict with any provision of the certificate or
articles of incorporation, by-laws or other organizational documents of the
Company or any of the Subsidiaries or any judgment, decree, order, statute, rule
or regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, by the Registration Statement and by the Prospectus,
including the issuance, sale and delivery of
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the Shares to be issued, sold and delivered by the Company hereunder, except the
registration under the Securities Act of the Shares and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters.
(g) The Company has the authorized capitalization set forth in
the Prospectus and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares from the
Company upon issuance or sale by the Company of Shares in the Offering, except
for such rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement; the Shares to be delivered on the
Closing Date and the Additional Closing Date, if any, have been duly and validly
authorized and, when delivered by the Company in accordance with this Agreement,
will be duly and validly issued, fully paid and non-assessable and will not have
been issued in violation of or subject to any preemptive or similar rights that
entitle or will entitle any person to acquire any Shares from the Company upon
issuance thereof by the Company; and all of the issued shares of capital stock
of each of its Subsidiaries has been duly and validly authorized and issued and
are fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims, except
as otherwise disclosed in the Prospectus; the Common Stock, the Firm Shares and
the Additional Shares conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. Except as
disclosed in or specifically contemplated by the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any shares of its capital stock 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.
(h) The Subsidiaries are the only subsidiaries (as defined in
Rule 405 of the Securities Act) of the Company. Each of the Company and the
Subsidiaries has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation. Each of the
Company and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
material adverse effect on (i) the business, prospects, properties, operations,
condition (financial or other), stockholders' equity (investment) or results of
operations of the Company and the Subsidiaries, taken as a whole; (ii) the
Offering, or anything giving rise to any liability or obligation on the part of
the Underwriters; or (iii) the consummation of the transactions contemplated by
this Agreement or the Company's performance of its obligations hereunder (any of
the events
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set forth in (i), (ii) or (iii), a "Material Adverse Effect"). Each of the
Company and the Subsidiaries has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits (collectively, the "Consents") of and from
all public, regulatory or governmental agencies and bodies, to own, lease and
operate its properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus, except for such
Consents the absence of which would not have a Material Adverse Effect. No
Consent contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus.
(i) Except as described in the Prospectus, there is no legal
or governmental proceeding, including routine litigation, to which the Company
or any of the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of the Subsidiaries, is reasonably
likely to have a Material Adverse Effect, and to the best of the Company's
knowledge, no such proceeding is threatened or contemplated by governmental
authorities or threatened or contemplated by others, and the defense of all such
claims against the Company in the aggregate, including routine litigation, will
not have a Material Adverse Effect.
(j) Neither the Company nor any of its affiliates have taken
and nor will any of them take, directly or indirectly, any action designed to
cause or result in, or which constitutes or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.
(k) Except for the Subsidiaries, the Company owns no capital
stock or other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(l) The financial statements, including the notes thereto, and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries and the other entities for which
financial statements are included in the Registration Statement and the
Prospectus as of the dates indicated and condition and results of operations for
the periods specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
other financial and statistical information and data included in the
Registration Statement and the Prospectus present fairly the information
included therein and have been prepared on a basis consistent with that of the
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus and the books and records of the respective
6
entities presented therein. The pro forma financial information included in the
Prospectus has been properly compiled, and prepared in accordance with the
applicable requirements of the Securities Act and the Rules and Regulations and
includes all adjustments necessary to present fairly the pro forma financial
position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified.
(m) The assumptions used in preparing the pro forma financial
information included in each of the Registration Statement and the Prospectus
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(n) Except as disclosed in the Prospectus, no holder of
securities of the Company has any rights to the registration of securities of
the Company because of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby, and any such rights
so disclosed have either been fully complied with by the Company or effectively
waived by the holders thereof.
(o) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be, subject
to registration as an "investment company" under the Investment Company Act of
1940.
(p) The Company and the Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Registration
Statement and the Prospectus or such as are not reasonably likely to have a
Material Adverse Effect; and any real property and buildings held under lease or
sublease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries. Neither the Company nor any of
the Subsidiaries has received any notice of any claim adverse to their ownership
of any real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease or sublease
by the Company or any of the Subsidiaries, except any such claims which are not
reasonably likely to have a Material Adverse Effect.
(q) The Company and each of the Subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by it and has paid or made provision for the payment of all
taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use
7
taxes and all taxes which the Company and each of the Subsidiaries is obligated
to withhold from amounts owning to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return), except any amounts the Company is
contesting in good faith and the failure to so pay would not have a Material
Adverse Effect. No deficiency assessment with respect to a proposed adjustment
of the Company's or any of the Subsidiaries' Federal, state, or other taxes is
pending or, to the best of the Company's knowledge, threatened, which could
reasonably be expected to have a Material Adverse Effect. There is no material
tax lien, whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company or any of
the Subsidiaries.
(r) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and the outstanding shares of Common Stock (including the
Shares) are listed for quotation on the American Stock Exchange (the "American
Stock Exchange"), 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 de-listing the Common Stock from the American Stock Exchange,
nor has the Company received any notification that the SEC or the American Stock
Exchange is contemplating terminating such registration or listing.
(s) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(t) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(u) There are no contracts or other documents, which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement or the Prospectus by the Securities Act or by the Rules
and Regulations and which have not been so described or filed.
(v) The Company and its subsidiaries maintain 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, (iii) access to
assets is permitted only in accordance
8
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.
(w) Neither the Company nor any of the Subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default (and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) is in violation in
any respect of any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties or assets,
except in the case of (ii) or (iii) any violation or default that would not have
a Material Adverse Effect.
(x) The Company and each of the Subsidiaries owns or possesses
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
(the "Intellectual Property") necessary for the conduct of their respective
businesses as being conducted and as described in the Registration Statement and
Prospectus and have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any claim of
conflict with, any such right of others, which claim, if the subject of an
unfavorable decision, ruling or judgment, could reasonably be expected to result
in a Material Adverse Effect. Except as described in the Prospectus and the
Registration Statement, or as could not reasonably be expected to have a
Material Adverse Effect, (i) there is no infringement by third parties of any
such Intellectual Property; (ii) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(iii) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such claim.
(y) No labor disturbance by the employees of the Company or
any of the Subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
(z) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
9
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan which could
have a Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law; including ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from any "pension
plan;" and each "pension plan" (as defined in ERISA) for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which could cause the loss of such
qualification.
(aa) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or caused by
the Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or may be liable) upon any other property now or
previously owned or leased by the Company or any of the Subsidiaries, or upon
any other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any statute
or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation
or liability which would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal, discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company or any of the
Subsidiaries has knowledge, except for any such disposal, discharge, emission,
or other release of any kind, which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect. The Company has not agreed to assume, undertake or provide
indemnification for any liability of any other person under any Environmental
Law, including any obligation for cleanup or remedial action, except as would
not reasonably be expected to have a Material Adverse Effect.
(bb) Neither the Company, any of the Subsidiaries nor, to the
Company's knowledge, any of its employees or agents has at any time during the
last five years (i) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation of law or (ii)
made any payment to any 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 of any
jurisdiction thereof.
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(cc) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company believes are
reliable and accurate.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder severally represents and warrants to, and agrees with,
each of the Underwriters that:
(a) This Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Selling Stockholders and is a
valid and binding agreement of the Selling Stockholders, enforceable against
each Selling Stockholder in accordance with its terms, except as enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(b) Each of the Custody Agreements and Powers of Attorney
(each, a "Custody Agreement and Power of Attorney") signed by (i) each Selling
Stockholder, (ii) the Company, as custodian (in such capacity, the "Custodian"),
and (iii) Xxxx Xxxxxxxx Xxxx and Xxxxxxx X. Xxxxxxxxx, as the Selling
Stockholders' attorney-in-fact (in such capacity, the "Attorney-In-Fact"), has
been duly and validly authorized, executed and delivered by each Selling
Stockholder and is a valid and binding agreement of each Selling Stockholder,
enforceable against him or her in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles. Each Selling
Stockholder agrees that the Additional Shares, if any, to be sold by each
Selling Stockholder on deposit with the Custodian are subject to the interests
of the Underwriters, that the arrangements made for such custody are to that
extent irrevocable, and that the obligations of each Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or in
the Custody Agreement and Power of Attorney, by any act of the Selling
Stockholder, by operation of law, by death or incapacity of such Selling
Stockholder or by the occurrence of any other event. If a Selling Stockholder
should die or become incapacitated, or if any other event should occur, before
the delivery of the Additional Shares, if any, to be sold by a Selling
Stockholder hereunder, the documents evidencing the Additional Shares, if any,
to be sold by such Selling Stockholder then on deposit with the Custodian shall
be delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received notice thereof.
(c) Each Selling Stockholder (i) is the lawful owner of the
Additional Shares, if any, to be sold by such Selling Stockholder hereunder or
(ii) holds fully exercisable stock options ("Stock Options") to purchase a
number of shares of Common Stock at least equal to the number of Additional
Shares, if any, to be sold by such Selling Stockholder hereunder, and will on
the Additional Closing Date be the
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lawful owner of such Additional Shares, and in each case upon sale and delivery
of, and payment for, such Additional Shares, as provided herein, each Selling
Stockholder will convey to the Underwriters good and marketable title to such
Additional Shares, free and clear of all liens, encumbrances, equities, claims
and security interests whatsoever.
(d) Each Selling Stockholder (other than Selling Stockholders
holding and exercising the Stock Options referred to in paragraph (c) above)
has, and on the Additional Closing Date, if any, will have, good and valid title
to all of the Additional Shares which may be sold by such Selling Stockholder
pursuant to this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law, to enter into this Agreement and
the applicable Custody Agreement and Power of Attorney, to sell, transfer and
deliver all of the Additional Shares which may be sold by such Selling
Stockholder pursuant to this Agreement and to comply with his or her other
obligations hereunder and thereunder.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the Selling
Stockholders of the transactions contemplated herein, except such as may have
been obtained under the Securities Act and such as may be required under the
state securities laws or the blue sky laws or any jurisdiction in connection
with the purchase and distribution of the Additional Shares by the Underwriters
and such other approvals as have been obtained.
(f) Neither the sale of the Additional Shares, if any, being
sold by the Selling Stockholders nor the consummation of any of the other
transactions contemplated herein by the Selling Stockholders or the fulfillment
of the terms hereof by the Selling Stockholders will conflict with, result in a
breach or violation of, or constitute a default under any law or the terms of
any indenture or other agreement or instrument to which any Selling Stockholder
is party or bound, any judgment, order or decree applicable to any Selling
Stockholder or any court or regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over any Selling Stockholder.
(g) None of the Selling Stockholders has any registration or
other similar rights to have any equity or debt securities registered for sale
by the Company under the Registration Statement or included in the offering of
the Shares, except for such rights as have been waived or which are described in
the Prospectus.
(h) The Selling Stockholders do not have, or have waived prior
to the date hereof, any preemptive right, co-sale right or right of first
refusal or other similar right to purchase any of the Additional Shares, if any,
that are to be sold by the Company to the Underwriters pursuant to this
Agreement; and the Selling Stockholders do not own any warrants, options or
similar rights to acquire, and do not have any right or arrangement to acquire,
any capital stock, right, warrants, options or other securities from
12
the Company, other than those described in the Registration Statement and the
Prospectus.
(i) All information furnished by or on behalf of the Selling
Stockholders in writing for use in the Registration Statement and Prospectus, or
any document incorporated by reference into the Registration Statement and
Prospectus is, and on the Closing Date and the Additional Closing Date, if any,
will be, true, correct, and complete in all material respects, and does not, and
on the Closing Date and the Additional Closing Date, if any, will not, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. To the extent such
information appears in the Prospectus, each Selling Stockholder confirms as
accurate the number of shares of Common Stock and options set forth opposite
such Selling Stockholder's name and as described in the related footnote in the
Prospectus under the caption "Principal and Selling Stockholders" (both prior to
and after giving effect to the sale of the Additional Shares).
(j) The Selling Stockholders have not taken and will not take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(k) The Selling Stockholders have not distributed and will not
distribute, prior to the later of the Additional Closing Date, if any, and the
completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares by the Selling
Stockholders other than a Preliminary Prospectus, the Prospectus or the
Registration Statement.
(l) Each Selling Stockholder has reviewed and is familiar with
the Registration Statement and the Prospectus and (i) has no knowledge of any
material adverse information with regard to the Company or the Subsidiaries
which is not disclosed in the Registration Statement and the Prospectus, (ii)
has no knowledge of any misstatement of a material fact or failure to state a
material fact necessary to make the statements in the Prospectus, in light of
the circumstances under which they were made, not misleading, and (iii) is not
prompted to sell the Additional Shares, if any, to be sold by the Selling
Stockholders by any information concerning the Company or any of the
Subsidiaries which is not set forth in the Registration Statement and the
Prospectus.
(m) The representations and warranties of the Selling
Stockholders in the respective Custody Agreements and Powers of Attorney are,
and on the Closing Date and Additional Closing Date, if any, will be, true and
correct.
Any certificate signed by or on behalf of the Selling Stockholder
and delivered to the Representatives or to Underwriters' Counsel shall be deemed
to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
13
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $_______, the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Fulbright & Xxxxxxxx
L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ("Underwriters' Counsel") or
at such other place as shall be agreed upon by Bear, Xxxxxxx & Co. Inc. and the
Company, at 10:00 A.M., New York City time on the third or fourth business day
(as permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 10 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the public offering price of the Shares), or such other time not later than ten
business days after such date as shall be agreed upon by Bear, Xxxxxxx & Co.
Inc. and the Company (such time and date of payment and delivery being herein
called the "Closing Date").
(c) Payment for the Shares shall be made to or upon the order
of the Company of the purchase price by wire transfer in Federal (same day)
funds to the Company upon delivery of certificates for the Shares to you through
the facilities of The Depository Trust Company for the respective accounts of
the several Underwriters against receipt therefor signed by you. Certificates
for the Shares to be delivered to you shall be registered in such name or names
and shall be in such denominations as you may request at least one business day
before the Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(d) In addition, the Company and the Selling Stockholders
hereby grant to the Underwriters the option to purchase up to an aggregate of
450,000 Additional Shares at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares as set forth in this Section 3,
for the sole purpose of covering over-allotments in the sale of Firm Shares by
the Underwriters. This option may be exercised at any time and from time to
time, in whole or in part, on or before the thirtieth day following the date of
the Prospectus, by written notice by you to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time being herein
14
sometimes referred to as the "Additional Closing Date"); PROVIDED, HOWEVER, that
the Additional Closing Date shall not be earlier than the Closing Date or
earlier than the second full business day after the date on which the option
shall have been exercised nor later than the eighth full business day after the
date on which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 10 hereof).
Certificates for the Additional Shares shall be registered in such name or names
and in such authorized denominations as you may request in writing at least two
full business days prior to the Additional Closing Date. The Company will permit
you to examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to the total number of Firm Shares, subject,
however, to such adjustments to eliminate any fractional shares as Bear, Xxxxxxx
& Co. Inc. in its sole discretion shall make. The number of Additional Shares to
be sold by (i) the Company shall be the number which bears the same ratio to the
aggregate number of Additional Shares being purchased as 180,000 bears to
450,000 and (ii) each Selling Stockholder shall be the number which bears the
same ratio to the aggregate number of Additional Shares being purchased as the
number of Additional Shares set forth opposite the name of such Selling
Stockholder in the second column of Schedule II hereto bears to 450,000, subject
in each case, however, to such adjustments to eliminate any fractional shares as
Bear, Xxxxxxx & Co. Inc. in its sole discretion shall make.
Payment for the Additional Shares to be sold by the Company shall be
made to or upon the order of the Company of the purchase price by wire transfer
in Federal (same day) funds to the Company at the offices of Underwriters'
Counsel, or such other location as may be mutually acceptable upon delivery of
the certificates for the Additional Shares to you for the respective accounts of
the Underwriters. Payment for the Additional Shares to be sold by the Selling
Stockholders shall be made to or upon the order of the Selling Stockholders of
the purchase price by wire transfer in Federal (same day) funds to the Selling
Stockholders [[or the Custodian]] at the offices of Underwriters' Counsel, or
such other location as may be mutually acceptable, upon delivery of the
certificates for the Additional Shares to Bear, Xxxxxxx & Co. Inc. for the
respective accounts of the Underwriters. Each Selling Stockholder hereby agrees
that (i) it will pay all stock transfer taxes, stamp duties and other similar
taxes, if any, payable upon the sale or delivery of the Additional Shares to be
sold by the Selling Stockholders to the several Underwriters, or otherwise in
connection with the performance of the Selling Stockholders' obligations
hereunder and (ii) the Custodian is authorized to deduct for such payment any
such amounts from the proceeds to the Selling Stockholders hereunder and to hold
such amounts for the account of the Selling Stockholders with the Custodian
under the Custody Agreement and Power of Attorney.
15
4. OFFERING. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms and conditions set forth in the Prospectus.
5. COVENANTS OF THE COMPANY; COVENANTS OF THE SELLING
STOCKHOLDERS.
A. The Company covenants and agrees with each of the Underwriters
that:
(a) The Registration Statement and any amendments thereto have
become effective, and if Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b), or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) within the prescribed time period and will provide evidence satisfactory
to you of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a Term Sheet that complies with requirements of
Rule 434 and provide the Underwriters with copies of such filings prior to their
use.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the Company's intention to file or
prepare any amendments to the Registration Statement (including pursuant to rule
462(b)), the Term Sheet or any supplement, revision or amendment to the
Registration Statement or the Prospectus, (iv) of the mailing or the delivery to
the Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (v) of the receipt of any
comments from the Commission, and (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for that purpose. If the Commission shall propose or enter a stop order at any
time, the Company will make every reasonable effort to prevent the issuance of
any such stop order and, if issued, to obtain the lifting of such order as soon
as possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b) or Rule 434) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or, file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into
16
the Prospectus to which you shall reasonably object in writing after being
timely furnished in advance a copy thereof.
(b) The Company shall comply with the Securities Act and the
Exchange Act to permit completion of the distribution as contemplated in this
Agreement, Registration Statement and Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Securities Act or the Rules and Regulations, or to file under the Exchange Act
so as to comply therewith any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission, subject to the second paragraph of Section 5(A)(a) hereof,
an appropriate amendment or supplement (in form and substance satisfactory to
you) which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the
Representatives and Underwriters' Counsel a signed copy of the Registration
Statement, including all consents and exhibits filed therewith and all documents
incorporated by reference therein and all amendments thereto, and the Company
will promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, as you may reasonably request. Prior to
10:00 A.M., New York time, on the business day next succeeding the date of this
Agreement and from time to time thereafter the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request.
(d) The Company shall promptly deliver to each of the
Underwriters and to Underwriters' Counsel copies of the Preliminary Prospectus,
and the Company consents to the use and delivery of the Preliminary Prospectus
by the Underwriters in accordance with Rule 430 and Section 5(b) of the
Securities Act. The Company shall also furnish to each of the Underwriters
copies of the final Prospectus as requested by any of the Underwriters.
17
(e) The Company will use its best efforts, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(f) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company and the Subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158).
(g) During the period of 90 days from the date of the
Prospectus, the Company will not, directly or indirectly, without your prior
written consent, issue, sell, offer or agree to sell, grant any option for the
sale of, pledge, make any short sale or maintain any short position, establish
or maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h)
under the Exchange Act ), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock (whether any such transaction is
to be settled by delivery of Common Stock, other securities, cash or other
consideration) or otherwise dispose of, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company or of any of the Subsidiaries, and the Company will
obtain the undertaking of each of its officers and directors and such of its
shareholders as have been heretofore designated by you and listed on Schedule II
attached hereto not to engage in any of the aforementioned transactions on their
own behalf, other than the Company's sale of Shares hereunder and the Company's
issuance of Common Stock upon (i) the conversion or exchange of convertible or
exchangeable securities outstanding on the date hereof; (ii) the exercise of
currently outstanding options; (iii) the exercise of currently outstanding
warrants; and (iv) the grant and exercise of options under, or the issuance and
sale of shares pursuant to, employee stock option plans in effect on the date
hereof.
(h) During the period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders, and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
18
the accounts of the Company and the Subsidiaries are consolidated in reports
furnished to its security holders generally or to the Commission).
(i) The Company will apply the net proceeds it receives from
the sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will use its best efforts to list for
quotation the Shares on the American Stock Exchange.
(k) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations thereunder.
B. Each Selling Stockholder covenants and agrees with each
Underwriter:
(a) To deliver to the Representatives prior to the Closing
Date, a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States Person) or Form W-9 (if
the Selling Stockholder is a United States Person).
(b) If, at any time prior to the date on which the
distribution of the Shares as contemplated herein and in the Prospectus has been
completed, as determined by the Representatives, such Selling Stockholder has
knowledge of the occurrence of any event as a result of which the Prospectus or
the Registration Statement, in each case as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, such Selling Stockholder will
promptly notify the Company and the Representatives.
(c) To cooperate to the extent necessary to cause the
Registration Statement or any post-effective amendment thereto to become
effective at the earliest possible time and to do and perform all things to be
done and performed under this Agreement prior to the Closing Date and to satisfy
all conditions precedent to the delivery of the Shares pursuant to this
Agreement.
(d) Pay or to cause to be paid all transfer taxes with respect
to the Additional Shares, if any, to be sold by such Selling Stockholder.
(e) To deliver to Bear, Xxxxxxx & Co. Inc. on or prior to the
date of this Agreement each lock-up agreement referenced in Section 7(k) hereof.
19
6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing any Agreement among Underwriters, this Agreement, the blue sky
memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(A)(e)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the blue sky survey;
(iv) all fees and expenses in connection with listing the Shares on the American
Stock Exchange; (v) all travel expenses of the Company's officers and employees
and any other expense of the Company incurred in connection with attending or
hosting meetings with prospective purchasers of the Shares; (vi) any stock
transfer taxes incurred in connection with this Agreement or the Offering; (vii)
the filing fees incident to, and the reasonable legal fees and disbursements of
counsel for the Underwriters in connection with, securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Shares, and (viii) fees of the Custodian and other fees and expenses related
to the offering of the Additional Shares by the Selling Stockholders, on behalf
of the Selling Stockholders in connection with the sale of Additional Shares, if
any. The Company also will pay or cause to be paid: (i) the cost of preparing
stock certificates; (ii) the cost and charges of any transfer agent or
registrar; and (iii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6. It is understood, however, that except as provided in this
Section, and Sections 8 and 12 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein contained, as of the date hereof and as of the Closing Date (for purposes
of this Section 7 "Closing Date" shall refer to the Closing Date for the Firm
Shares and any Additional Closing Date, if different, for the Additional
Shares), to the absence from any certificates, opinions, written statements or
letters furnished to you or to Underwriters' Counsel pursuant to this Section 7
of any misstatement or omission, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
20
(a) The Registration Statement shall have become effective and
all necessary approvals from the American Stock Exchange shall have been
received not later than, if pricing pursuant to Rule 430A: 5:30 P.M., New York
time, on the date of this Agreement or at such later time and date as shall have
been consented to in writing by you; if the Company shall have elected to rely
upon Rule 430A or Rule 434 of the Regulations, the Prospectus shall have been
filed with the Commission in a timely fashion in accordance with Section 5(A)(a)
hereof and a form of the Prospectus containing information relating to the
description of the Shares and the method of distribution and similar matters
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period; and, at or prior to the Closing Date no stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereof shall have been issued and no proceedings therefor shall have
been initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the favorable
written opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Company, and Xxxx Xxxxxxxx Xxxx, Esq., Executive Vice President, General Counsel
and Secretary of the Company, each dated the Closing Date addressed to the
Underwriters in the forms attached hereto as Annex I and Annex II, respectively.
(c) At the Closing Date, you shall have received the favorable
written opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Selling Stockholders, dated the Closing Date addressed to the Underwriters in
the form attached hereto as Annex III.
(d) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(e) At the Closing Date, you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 7 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
the Company and the Subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any
21
labor dispute or any legal or governmental proceeding, and (v) subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus there has not been any material adverse change in the capital
stock or long-term debt of the Company or any of the Subsidiaries or any change,
or any development involving a prospective change, in the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from KPMG LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Company and the
Underwriters and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from Deloitte & Touche LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Company and
the Underwriters and in form and substance satisfactory to the Underwriters and
Underwriters' Counsel.
(h) At the Closing Date, you shall have received a letter,
from KPMG LLP dated as of the Closing Date addressed to the Underwriters and in
form and substance satisfactory to you, stating that nothing came to their
attention causing them to believe that the unaudited proforma financial
information of the Company included in the Registration Statement does not
comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X promulgated under the Securities
Act or that the proforma adjustments have not been properly applied to the
historical amounts in the compilation of such statements
(i) You shall have also received from KPMG LLP, a letter
stating that the Company's system of internal accounting controls taken as a
whole is sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the financial
statements of the Company and the Subsidiaries.
(j) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock (other than pursuant to the exercise of stock options described in the
Registration Statement and the Prospectus as outstanding or the grant of stock
options under stock option plans described in the Registration Statement and
Prospectus) or long-term debt of the Company or any of the Subsidiaries or any
change, or any development involving a prospective change, in or
22
affecting the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and the Subsidiaries taken as a
whole, including, without limitation, the occurrence of a fire, flood, explosion
or other calamity at any of the properties owned or leased by the Company or any
of its Subsidiaries, the effect of which, in any such case described above, is,
in the judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Prospectus
(exclusive of any supplement).
(k) You shall have received a lock-up agreement from each
person who is a director or an executive officer of the Company and each Selling
Stockholder substantially in the form attached hereto as Annex IV.
(l) At the Closing Date, the Shares shall have been approved
for listing on the American Stock Exchange.
(m) At the Closing Date, you shall have received a certificate
of an authorized representative of the Selling Stockholders, dated the Closing
Date, to the effect that the representations and warranties of the Selling
Stockholders set forth in Section 2 hereof are accurate and that each of the
Selling Stockholders has complied with all agreements and satisfied all
conditions on his or her part to be performed or satisfied hereunder at or prior
to the Closing Date.
(n) On or prior to the Closing Date, you shall have received a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof) from each Selling Stockholder.
(o) The Company shall have complied with the provisions of
Section 5(A)(c) hereof with respect to the furnishing of prospectuses.
(p) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
23
8. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the Company will not be liable
in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein. The foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus (as then amended or supplemented, provided to the
several Underwriters in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person asserting any
losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured, as determined by a court of
competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. This indemnity agreement
will be in addition to any liability which the Company may otherwise have
including under this Agreement.
(b) Each Selling Stockholder agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation,
24
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact relating to such Selling
Stockholder contained in the Registration Statement for the registration of the
Shares, as originally filed or any amendment thereof, or any related Preliminary
Prospectus or the Prospectus, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact relating to such Selling Stockholder required to be
stated therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that in no such case shall any Selling Stockholder be liable
or responsible for any amount in excess of the proceeds (net of the underwriting
discount) applicable to the Shares sold by such Selling Stockholder pursuant to
the transactions contemplated hereby. The foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or supplemented,
provided to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages and liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, if such material misstatement or omission
or alleged material misstatement or omission was cured, as determined by a court
of competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. This indemnity agreement
will be in addition to any liability which any Selling Stockholder may otherwise
have including under this Agreement.
(c) Each Underwriter severally, and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim, and any and all
amounts paid in settlement of any claim or litigation), jointly or severally, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement
25
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement. The Company
acknowledges that the statements set forth in paragraphs 3, 14 and 15 under the
caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Shares as originally filed or in any
amendment thereof, any related preliminary prospectus or the Prospectus or in
any amendment thereof or supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of any claims or the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 8 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, an
indemnifying party may participate, at its own expense in the defense of such
action, and to the extent it may 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 satisfactory to
such indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, (iii) the
indemnifying party does not diligently defend the action after assumption of the
defense, or (iv) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in
26
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to the
entry of judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could have
been sought under Section 8 or 9 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of the indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim,
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act, by or on behalf of the indemnified party and (iii) the
indemnifying party reaffirms its obligations.
9. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 8 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholders and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company and each Selling Stockholder, any contribution received by the Company
and/or the Selling Stockholder from persons, other than the Underwriters, who
may also be liable for contribution, including persons who control the Company
and/or the Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, officers of the Company who
signed the Registration Statement and directors of the Company) as incurred to
which the Company, each Selling Stockholder and one or more of the Underwriters
may be subject, in such proportions as are appropriate to reflect the relative
benefits received by the Company and each Selling Stockholder on the one hand
and the Underwriters on the other hand from the offering of the Shares or, if
such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 8 hereof, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Selling Stockholder on the one hand and the Underwriters on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the Selling
27
Stockholders bear to (y) the underwriting discount received by the respective
Underwriters, respectively, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of each of the Company, any Selling
Stockholder and of the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 9, (i) no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the shares are
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company and any Selling Stockholder, as applicable, subject in each case to
clauses (i) and (ii) of this Section 9. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 9 or otherwise. The
obligations of the Underwriters to contribute pursuant to this Section 9 are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint.
28
10. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company and the Selling Stockholder to sell the Additional Shares shall
thereupon terminate, without liability on the part of the Company or the Selling
Stockholders with respect thereto (except in each case as provided in Sections
6, 8(a) and 9 hereof with respect to the Company and Sections 8(b) and 9 hereof
with respect to the Selling Stockholders) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company and the
Selling Stockholders for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
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 and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
29
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Underwriters,
and the Company and the Selling Stockholders contained in this Agreement or in
certificates of officers of the Company or any Subsidiary submitted hereto or
thereto, including the agreements contained in Section 6, the indemnity
agreements contained in Section 8 and the contribution agreements contained in
Section 9, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof or by or on behalf of the Company or the Selling Stockholders, any of
their officers and directors or any controlling person thereof, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
6, 8, 9, 11 and 12(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 10 or 12 hereof.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of
when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company, the
Selling Stockholders or the Underwriters except as herein expressly provided.
Until this Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by you notifying the Company. Notwithstanding the
foregoing, the provisions of this Section 12 and of Sections 1, 6, 8 and 9
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general; or (B) if trading on the New York Stock Exchange or on the American
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the New York Stock Exchange or on the American Stock
Exchange by the New York Stock Exchange or by the American Stock Exchange or by
order of the Commission or any other governmental authority having jurisdiction;
or (C) if a banking moratorium has been declared by any state or federal
authority or if any material disruption in commercial banking or securities
settlement or clearance services shall have occurred; or (D) any downgrading
shall have occurred in the Company's corporate credit rating or the rating
accorded the Company's debt securities by any "nationally recognized statistical
rating organization" as that term is defined by
30
the Commission for purposes of Rule 436(g)(2) under the Securities Act or if any
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities; or (E) (i) if there shall have occurred any outbreak
or escalation of hostilities or acts of terrorism involving the United States or
there is a declaration of a national emergency or war by the United States or
(ii) if there shall have been any other calamity or crisis or any change in
political, financial or economic conditions if the effect of any such event in
(i) or (ii) as in your judgment makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms and in the manner contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this Section 12
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 12(a) hereof or (ii) Section 10(b)), or if the sale of the
Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth herein is not satisfied or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will, subject
to demand by you, reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and expenses of their counsel), incurred by the
Underwriters in connection herewith. If this Agreement shall be terminated
pursuant to Section 12(b) hereof, then no party shall have any liability
hereunder except for the Company's obligation, pursuant to Section 6 hereof, to
pay all out-of-pocket expenses of the Underwriters incurred in connection with
this Agreement.
13. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co.
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital
Markets, with a copy to Fulbright & Xxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Xxxx Xxxxxx, Esq.
(b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company at Five Xxxxxx Xxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Xxxx Xxxxxxxx Xxxx, Esq. and its counsel at
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, Xxx Xxxx, XX 00000,
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.;
(c) if sent to the Selling Stockholders, shall be mailed,
delivered, or faxed and confirmed in writing to the Custodian c/o the Company,
Five Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: _____________;
31
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section
8 shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address set forth in its acceptance facsimile to you, which
address will be supplied to any other party hereto by you upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof.
14. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 8 and
9 hereof, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors, and said controlling persons, and officers and directors
and their heirs and legal representatives, and it is not for the benefit of any
other person, firm or corporation. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
18. TIME IS OF THE ESSENCE. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
32
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us. It
is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
DRS TECHNOLOGIES, INC.
By:
--------------------------------------
Xxxx X. Xxxxxx
Chairman of the Board,
Chief Executive Officer and President
Each of the Selling Stockholders:
By:
--------------------------------------
Name:
Title:
as Attorney-in-Fact for the Selling
Stockholders
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:
------------------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
33
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc...................
First Union Securities, Inc...............
-----------
Total........................... 3,000,000
===========
I-1
SCHEDULE II
NUMBER OF ADDITIONAL SHARES
TO BE SOLD
NAMES OF SELLING STOCKHOLDERS TO THE UNDERWRITERS
----------------------------- -------------------
Xxxx X. Xxxxxx 200,000
Xxxx X. Xxxxxx 25,000
Xxxx Xxxxxxxx Xxxx 25,000
Xxxxxxx X. Xxxxxxxxx 15,000
Xxxxxx X. Xxxxx 5,000
---------
Total 270,000
=========
II-1
ANNEX I
FORM OF OPINION OF COMPANY COUNSEL
(i) Each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation
with all corporate power and authority to own its properties
and conduct its business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus and the authorized capital stock of the
Company, including the Shares, conforms as to legal matters to
the description thereof in the Prospectus.
(iii) All of the issued shares of Capital Stock of the Company have
been duly and validly authorized and issued, are fully paid
and non-assessable and are not now in violation of or subject
to any preemptive or, to the best of such counsel's knowledge,
similar rights that entitle or will entitle any person to
acquire any Shares from the Company upon issuance thereof by
the Company.
(iv) The Shares and the Additional Shares to be delivered on the
Closing Date and the Additional Closing Date, respectively,
have been duly and validly authorized and, when delivered by
the Company against payment therefor in accordance with this
Agreement, will be duly and validly issued, fully paid and
non-assessable and will not have been issued in violation of
or subject to preemptive or, to the best of such counsel's
knowledge, similar rights that entitle or will entitle any
person to acquire any Shares from the Company upon issuance
thereof by the Company.
(v) The Shares to be sold under this Agreement to the Underwriters
are duly authorized for listing on the American Stock
Exchange.
(vi) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(vii) The Company has the corporate power and authority to execute
and deliver this Agreement and the Shares and to perform its
obligations hereunder, and all corporate action required to be
taken for the due and proper authorization, execution and
delivery of this Agreement and the Shares and the consummation
of the transactions contemplated by this have been duly and
validly taken.
(viii) The issuance and sale of the Shares by the Company, the
execution, delivery, and performance of this Agreement,
compliance by the Company with all provisions of this
Agreement and the consummation of the transactions
contemplated hereby by the Company do not and will not (A)
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien,
charge or encumbrance
upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or any other agreement, instrument,
franchise, license or permit known to such counsel to which
the Company or any of the Subsidiaries is a party or by which
any of the Company or any of the Subsidiaries or their
respective properties or assets is subject or may be bound or
(B) violate or conflict with any provision of the certificate
of incorporation or by-laws of the Company or any of the
Subsidiaries, or, to the best knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets.
Such counsel need not express any opinion, however, as to
whether the execution, delivery or performance by the Company
of the
Underwriting Agreement will constitute a violation of,
or a default under, any covenant, restriction or provision
with respect to financial ratios or tests.
(ix) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court
or any public, governmental, or regulatory agency or body
having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets
is required for the issuance, sale and delivery of the Shares,
the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which
such counsel need express no opinion), (2) such as have been
made or obtained under the Securities Act and (3) such as are
required by the National Association of Securities Dealers,
Inc.
(x) The Registration Statement, at the time it became effective,
and the Prospectus, as of its date, appeared on their face to
be appropriately responsive in all material respects to the
requirements of the Securities Act and the Rules and
Regulations, except that in each case we do not express any
opinion as to the financial statements and schedules and other
financial or statistical data included or incorporated by
reference therein or excluded therefrom, or the exhibits
thereto, and, except to the extent expressly stated in
paragraphs 11, 12 and 13, we do not assume any responsibility
for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(xi) The statements under the caption "Business-Legal Proceedings",
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings.
(xii) The statements in the Prospectus under the caption
"Underwriting", insofar as such statements purport to
summarize certain provisions of the
Underwriting Agreement,
fairly summarize such provisions in all material respects.
(xiii) The statements in the Prospectus under the caption
"Description of Capital Stock ," insofar as such statements
purport to summarize certain provisions of the documents
referred to therein, fairly summarize such provisions in all
material.
(xiv) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xv) Such counsel has been orally advised by the Commission that
the Registration Statement was declared effective under the
Act at ____ [a.m.], on December ___________, 2001, and that
such counsel has been orally advised by the Commission that no
stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best of such counsel's
knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(xvi) In addition, such opinion shall also contain a statement that
such counsel has participated in conferences with officers and
representatives of the Company, representatives of the
independent public accountants for the Company and the
Underwriters at which the contents and the Prospectus and
related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to
believe that either the Registration Statement, at the time it
became effective (including the information deemed to be part
of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date, as of the
date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus (including the documents incorporated by reference
therein), as of its date (or any amendment thereof or
supplement thereto made prior to the Closing Date as of the
date of such amendment or supplement) and as of the Closing
Date, contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel
need express no belief or opinion with respect to the
financial statements and schedules and other financial data
included or incorporated by reference therein).
ANNEX II
FORM OF OPINIONS OF XXXX XXXXXXXX XXXX, GENERAL COUNSEL OF DRS
(i) Each of the Company and the Subsidiaries is duly qualified and
in good standing as a foreign corporation in each jurisdiction
in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect.
(ii) All of the shares of capital stock of each of the Subsidiaries
have been duly authorized and are validly issued and are fully
paid and nonassessable, and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims.
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of the
Subsidiaries is a party or of which any property of the
Company or any of the Subsidiaries is the subject which, if
determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(iv) To the best of such counsel's knowledge, no contract,
agreement or document is required to be filed as an exhibit to
the Registration Statement or to be summarized or described in
the Prospectus which has not been so filed, summarized or
described.
(v) Neither the Company nor any of the Subsidiaries is in
violation of its respective charter or by-laws and, to the
best of such counsel's knowledge after due inquiry, neither
the Company nor any of the Subsidiaries is in default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a
whole, to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or
their respective properties may be bound.
(vi) Each of the Company and the Subsidiaries has all Consents as
are necessary to own, lease, license and operate its
respective properties and to conduct its business as described
in the Prospectus, except where the failure to have any such
Consent would not have a Material Adverse Effect; and to the
knowledge of such counsel, the Company is not in violation any
such Consent, except for any violations which would not have a
Material Adverse Effect.
(vii) No holders of securities of the Company have any rights under
any agreement known to such counsel to which the Company or
any of the Subsidiaries is a party or by which any of the
Company or any of the Subsidiaries or their respective
properties or assets is subject or may be bound to have such
securities included in the Registration Statement, except for
those rights that have been waived
(viii) Each of the Incorporated Documents, when it was filed,
appeared on its face to be appropriately responsive in all
material respects with the requirements of the Exchange Act
and the applicable rules and regulations of the Commission
thereunder, except that such counsel does not express any
opinion as to the financial statements and related notes and
schedules and other financial data included therein or omitted
therefrom or the exhibits thereto; and such counsel has no
reason to believe that any of such documents, when such
documents became were so filed, contained an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents and the Prospectus and related
matters were discussed and, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the Registration Statement,
at the time it became effective (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A(b)
or Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial data included or
incorporated by reference therein).
ANNEX III
FORM OF OPINIONS OF SELLING STOCKHOLDERS' COUNSEL
(i) Each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any
approval imposed by the applicable state securities and Blue
Sky laws), to sell, assign, transfer and deliver the
Additional Shares to be sold by such Selling Stockholder in
the manner provided in this Agreement.
(ii) To the best of such counsel's knowledge, after due inquiry,
each Selling Stockholder has good and clear title to the
certificates for the Additional Shares to be sold by such
Selling Stockholder, and upon delivery thereof pursuant hereto
and payment therefor, good and clear title will pass to the
Underwriters, severally, free of all restrictions and
transfer, liens, encumbrances, security interests and claims
whatsoever.
(iii) This Agreement has been duly and validly authorized, executed
and delivered by each Selling Stockholder.
(iv) The Custody Agreements and Powers of Attorney appointing
_________________ as the Custodian and _______________ as such
Selling Stockholder's Attorney-In-Fact, to the extent set
forth therein with regard to the transactions contemplated
hereby and by the Registration Statement, have been duly
authorized, executed and delivered by or on behalf of each
Selling Stockholder enforceable in accordance with its terms,
and pursuant to such power of attorney, each Selling
Stockholder has authorized such Attorney-In-Fact, to execute
and deliver on such Selling Stockholder's behalf this
Agreement and any other document necessary or desirable in
connection with the transactions contemplated hereby and to
deliver the Additional Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(v) The execution, delivery and performance of this Agreement by
each Selling Stockholder, compliance by each Selling
Stockholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not
require any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other
governmental body (except as such may be required under the
Securities Act, state securities laws or Blue Sky laws or
except as such may have been obtained) and will not conflict
with or constitute a breach of any of the terms or provisions
of, or a default under, any material agreement, indenture or
other instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder or property of the
Selling Stockholder is bound, or, to the knowledge of such
counsel, violate or conflict with any laws, administrative
regulation or ruling or court decree
applicable to such Selling Stockholder or property of such
Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' Counsel) of other
counsel reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders provided that copies of any such
statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
