EXHIBIT 1
___ SHARES
COMMON STOCK
($___ PAR VALUE)
UNDERWRITING AGREEMENT
----------------------
_________________, 1997
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, World of Science, Inc., a New York corporation (the
"Company") and the persons listed on Schedule I hereto (the "Selling
Shareholders"), hereby address you as the representatives (the
"Representatives") of each of the persons, firms and corporations listed on
Schedule II hereto (collectively, the "Underwriters") and hereby confirm their
agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell to the
Underwriters ___ shares of its Common Stock, par value $___ per share, and the
Selling Shareholders propose to sell to the Underwriters a total of ___ shares
of the Company's Common Stock, par value $___ per share, as set forth on
Schedule I hereto (such ___________ shares of Common Stock are herein referred
to as the "Firm Shares"). Solely for the purpose of covering over-allotments in
the sale of the Firm Shares, the Company further propose to grant to the
Underwriters the right to purchase up to an additional 15% of Firm Shares (the
"Option Shares"), as provided in Section 3 of this Agreement. The Firm Shares
and the Option Shares are herein sometimes referred to as the "Shares" and are
more fully described in the Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees and each Selling
Shareholder agrees, severally and not jointly, to sell to the Underwriters, and
each such Underwriter agrees, severally and not jointly, (a) to purchase from
the Company and from each of the Selling Shareholders, pro rata, at a purchase
price of $___ per share, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto and (b) to purchase from the Company
any
additional number of Option Shares which such Underwriter may become obligated
to purchase pursuant to Section 3 hereof.
The Company and the Selling Shareholders will deliver definitive
certificates for the Firm Shares at the office of X.X. Xxxxxxx & Sons, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Xxxxxxx' Office"), or such other place as you
and the Company may mutually agree upon, for the accounts of the Underwriters
against payment to the Company and the Selling Shareholders of the purchase
price for the Firm Shares sold by them to the several Underwriters by wire
transfer or certified or bank cashiers' check in clearing house (same day
available) funds payable to the order of the Company and the Selling
Shareholders, respectively, and delivered to Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx.
Xxxxx, Xxxxxxxx 00000, or at such other place as may be agreed upon between you
and the Company (the "Place of Closing"), at 10:00 a.m., St. Louis time, on
_____________, 1997, or at such other time and date not later than five full
business days thereafter as you and the Company may agree, such time and date of
payment and delivery being herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior to
the Closing Date and will be in such names and denominations as you may request
at least three full business days prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose checks
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company hereby
grants options to the Underwriters to purchase from the Company up to [_____]
Option Shares, on the same terms and conditions as the Firm Shares; provided,
--------
however, that such options may be exercised only for the purpose of covering any
-------
over-allotments which may be made by them in the sale of the Firm Shares. No
Option Shares shall be sold or delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
The options are exercisable on behalf of the several Underwriters by you,
as Representatives, at any time, and from time to time, before the expiration of
30 days from the date of this Agreement, for the purchase of all or part of the
Option Shares covered thereby, by notice given by you to the Company in the
manner provided in Section 13 hereof, setting forth the number of Option Shares
as to which the Underwriters are exercising the options,
-2-
and the date of delivery of said Option Shares, which date shall not be more
than five business days after such notice unless otherwise agreed to by the
parties. You may terminate the options at any time, as to any unexercised
portion thereof, by giving written notice to the Company to such effect.
You, as Representatives, shall make such allocation of the Option Shares
among the Underwriters as may be required to eliminate purchases of fractional
Shares.
Delivery of the Option Shares with respect to which the options shall have
been exercised shall be made to or upon your order at Xxxxxxx' Office (or at
such other place as you and the Company may mutually agree upon), against
payment by you of the per share purchase price to the Company by wire transfer
or certified or bank cashier's check or checks, payable in clearing house (same
day available) funds. Such payment and delivery shall be made at 10:00 a.m.,
St. Louis time, on the date designated in the notice given by you as above
provided for, unless some other date and time are agreed upon, which date and
time of payment and delivery are called the "Option Closing Date." The
certificates for the Option Shares so to be delivered will be made available to
you for inspection at Xxxxxxx' Office at least one full business day prior to
the Option Closing Date and will be in such names and denominations as you may
request at least three full business days prior to the Option Closing Date. On
the Option Closing Date, the Company shall provide the Underwriters such
representations, warranties, opinions and covenants with respect to the Option
Shares as are required to be delivered on the Closing Date with respect to the
Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
SELLING SHAREHOLDERS.
(a) The Company represents and warrants to and agrees with each Underwriter
that:
(i) A registration statement (Registration No. 333-____) on Form
S-1 with respect to the Shares, including a preliminary prospectus, and
such amendments to such registration statement as may have been required to
the date of this Agreement, has been carefully prepared by the Company
pursuant to and in conformity with the requirements of the Securities Act
of 1933, as amended (the "Act"), and the Rules and Regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under the
Act. Copies of such registration statement, including any amendments
thereto, each related preliminary prospectus (meeting the requirements of
Rule 430 or 430A of the Rules and Regulations) contained therein, the
exhibits, financial statements and schedules have heretofore been delivered
by the Company to you. If such registration statement has not become
effective under the Act, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit such
registration statement to become effective will be filed promptly by the
Company with the
-3-
Commission. If such registration statement has become effective under the
Act, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule
424(b) of the Rules and Regulations. The term "Registration Statement" as
used herein means the registration statement as amended at the time it
becomes or became effective under the Act (the "Effective Date"), including
financial statements and all exhibits and, if applicable, the information
deemed to be included by Rule 430A of the Rules and Regulations and
including any registration statement that may be filed pursuant to Rule
462(b) of the Rules and Regulations. The term "Prospectus" as used herein
means (i) the prospectus as first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, (ii) if no such filing is
required, the form of final prospectus included in the Registration
Statement at the Effective Date or (iii) if a Term Sheet or Abbreviated
Term Sheet (as such terms are defined in Rule 434(b) and 434(c),
respectively, of the Rules and Regulations) is filed with the Commission
pursuant to Rule 424(b)(7) of the Rules and Regulations, the Term Sheet or
Abbreviated Term Sheet and the last Preliminary Prospectus filed with the
Commission prior to the time the Registration Statement became effective,
taken together. The term "Preliminary Prospectus" as used herein shall mean
a preliminary prospectus as contemplated by Rule 430 or 430A of the Rules
and Regulations included at any time in the Registration Statement.
(ii) The Commission has not issued, and is not to the knowledge of
the Company threatening to issue, an order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus nor instituted proceedings
for that purpose. Each Preliminary Prospectus at its date of issue, the
Registration Statement and the Prospectus and any amendments or supplements
thereto contains or will contain, as the case may be, all statements which
are required to be stated therein by, and in all material respects conform
or will conform, as the case may be, to the requirements of, the Act and
the Rules and Regulations. Neither the Registration Statement nor any
amendment thereto, as of the applicable Effective Date, and neither the
Prospectus nor any supplement thereto, contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will omit
to state any 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; provided, however, that the Company makes
-------- -------
no representation or warranty as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Underwriters specifically
for use in the preparation thereof.
(iii) The filing of the Registration Statement and the execution and
delivery of this Agreement have been duly authorized by the Board of
Directors of the Company; this Agreement constitutes a valid and legally
binding obligation of the
-4-
Company enforceable in accordance with its terms (except to the extent the
enforceability of the indemnification and contribution provisions of
Section 7 hereof may be limited by public policy considerations as
expressed in the Act as construed by courts of competent jurisdiction, and
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights
generally and by general principles of equity); the issue and sale of the
Shares by the Company and the performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
violation of the Company's certificate of incorporation or bylaws or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company
under, any statute, or under any indenture, mortgage, deed of trust, note,
loan agreement, sale and leaseback arrangement or other agreement or
instrument to which the Company is a party or by which it is bound or to
which any of the properties or assets of the Company is subject, or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or their properties; no consent,
approval, authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the consummation
of the transactions herein contemplated, except such as may be required by
the National Association of Securities Dealers, Inc. (the "NASD") or under
the Act or Rules and Regulations or any state securities laws.
(iv) Except as described in the Prospectus, the Company has not
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company has not incurred any
material liabilities or material obligations, direct or contingent, other
than in the ordinary course of business, or entered into any material
transactions not in the ordinary course of business, and there has not been
any material change in the capital stock or long-term debt of the Company
or any material adverse change in the condition (financial or other), net
worth, business, affairs, management, prospects or results of operations of
the Company. The Company has filed all necessary federal, state and
foreign income and franchise tax returns and paid all taxes shown as due
thereon; all tax liabilities are adequately provided for on the books of
the Company except to such extent as would not materially adversely affect
the business of the Company; the Company has made all necessary payroll tax
payments and is current and up-to-date as of the date of this Agreement;
and the Company has no knowledge of any tax proceeding or action pending or
threatened against the Company which might materially adversely affect its
business or property.
-5-
(v) Except as described in the Prospectus, there is not now pending
or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding to which the Company is a party before or by any
court or public, regulatory or governmental agency or body which might be
expected to result (individually or in the aggregate) in any material
adverse change in the condition (financial or other), business or prospects
of the Company, or might be expected to materially and adversely affect
(individually or in the aggregate) the properties or assets thereof; and
there are no contracts or documents of the Company which would be required
to be filed as exhibits to the Registration Statement by the Act or by the
Rules and Regulations which have not been filed as exhibits to the
Registration Statement.
(vi) The Company has duly and validly authorized capital stock as
described in the Prospectus; all outstanding shares of Common Stock of the
Company and the Shares conform, or when issued will conform, to the
description thereof in the Registration Statement and the Prospectus and
have been or, when issued and paid for, will be duly authorized, validly
issued, fully paid and nonassessable; and the issuance of the Shares to be
purchased from the Company hereunder is not subject to preemptive rights.
(vii) The Company has been duly incorporated and are validly existing
as corporations in good standing under the laws of the states or other
jurisdictions in which it is incorporated, with full power and authority
(corporate and other) to own, lease and operate its properties and conduct
its businesses as described in the Registration Statement; the Company is
duly qualified to do business as foreign corporation in good standing in
each state or other jurisdiction in which its ownership or leasing of
property or conduct of business legally requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the ability of the Company to conduct its business as described
in the Registration Statement; and the Company does not have and has never
had any subsidiary.
(viii) KPMG Peat Marwick LLP, the accounting firm which has certified
the financial statements filed with the Commission as a part of the
Registration Statement, is an independent public accounting firm within the
meaning of the Act and the Rules and Regulations.
(ix) The financial statements and schedules of the Company,
including the notes thereto, filed with and as a part of the Registration
Statement, are accurate in all material respects and present fairly the
financial position of the Company as of the respective dates thereof and
the results of operations and statements of cash flow for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed in the Prospectus. The selected
financial data included in
-6-
the Registration Statement and Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements in the Registration Statement and Prospectus.
(x) The Company is not in default with respect to any contract or
agreement to which it is a party; provided that this representation shall
not apply to defaults which in the aggregate are not materially adverse to
the condition, financial or other, or the business or prospects of the
Company.
(xi) The Company is not in violation of any other laws, ordinances
or governmental rules or regulations to which it is subject, and the
Company has not failed to obtain any other license, permit, franchise,
easement, consent, or other governmental authorization necessary to the
ownership, leasing and operation of its properties or to the conduct of its
business, which violation or failure would materially adversely affect the
business, operations, affairs, properties, prospects, profits or condition
(financial or other) of the Company. The Company has not, at any time
during the past five years, (A) made any unlawful contributions to any
candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (B) made any payment to any state,
federal or foreign government official, or other person charged with
similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(xii) Except as described in the Prospectus, the Company owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to conduct
the business now operated by them, and the Company has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any patents, patent licenses, trademarks, service marks or trade
names which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
conduct of the business, operations, financial condition or income of the
Company.
(xiii) The Company has good and marketable title to all property owned
by it, free and clear of all liens, encumbrances, restrictions and defects
except such as are described in the Registration Statement or do not
interfere with the use made and proposed to be made of such property; and
any property held under lease or sublease by the Company is held under
valid, subsisting and enforceable leases or subleases with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property by the Company, and the Company has no notice or
knowledge of any material claim of any sort which has been, or may be,
asserted by anyone adverse to the Company's rights as lessee or sublessee
under any lease or sublease described above, or affecting or questioning
the Company's rights to the continued possession of the leased or subleased
premises under any such lease or sublease in conflict with the terms
thereof.
-7-
(xiv) Except as described in the Prospectus, there is no factual
basis for any action, suit or other proceeding involving the Company or any
of its material assets for any failure of the Company, or any predecessor
thereof, to comply with any requirements of federal, state or local
regulation relating to air, water, solid waste management, hazardous or
toxic substances, or the protection of health or the environment. Except as
described in the Prospectus, none of the property owned or leased by the
Company is, to the best knowledge of the Company, contaminated with any
waste or hazardous substances, and the Company may not be deemed an "owner
or operator" of a "facility" or "vessel" which owns, possesses, transports,
generates or disposes of a "hazardous substance" as those terms are defined
in (S)9601 of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S)9601 et seq.
------
(xv) No labor disturbance exists with the employees of the Company
or is imminent which would have a material adverse effect on the Company.
(xvi) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Company's Common Stock, and the Company is not aware of any such action
taken or to be taken by affiliates of the Company.
(xvii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xviii) The Company carries, or is covered by, insurance in such
amounts and covering such risks as the Company believes is adequate for the
conduct of its business and the value of its respective properties and as
is customary for companies engaged in similar industries.
(xix) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and
-8-
nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(xx) The Common Stock has been duly authorized for listing on the
National Association of Securities Dealers, Inc. Automated
Quotation/National Market System ("Nasdaq National Market System").
(b) Each Selling Shareholder severally, and not jointly, represents and
warrants to and agrees with each Underwriter and the Company that:
(i) All authorizations and consents necessary for the execution and
delivery by it of this Agreement and the sale and delivery of the Shares to
be sold by such Selling Shareholder hereunder have been given and are in
full force and effect on the date hereof and will be in full force and
effect on the Closing Date (and, if applicable, the Option Closing Date).
(ii) Such Selling Shareholder has, and on the Closing Date (and, if
applicable, the Option Closing Date) will have, good and valid title to the
Shares to be sold by such Selling Shareholder, free and clear of all liens,
mortgages, pledges, encumbrances, claims, equities and security interests
whatsoever, and will have, full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder.
(iii) Upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid and unencumbered title to such
Shares to be sold by such Selling Shareholder hereunder, free and clear of
all liens, mortgages, pledges, encumbrances, claims, equities and security
interests whatsoever.
(iv) The consummation by such Selling Shareholder of the
transactions contemplated herein and the fulfillment by such Selling
Shareholder of the terms hereof will not result in a violation or breach of
any terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, note, loan agreement, sale and leaseback
arrangement or other agreement or instrument to which such Selling
Shareholder is a party, or of any order, rule or regulation applicable to
such Selling Shareholder of any court or of any regulatory body of an
administrative agency or other governmental body having jurisdiction.
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or which might be reasonably
expected to cause or result in stabilization or manipulation of the price
of the Company's Common Stock, and such Selling Shareholder is not aware of
any such action taken or to be taken by affiliates of such Selling
Shareholder.
-9-
(vi) When the Registration Statement becomes effective and at all
times subsequent thereto, such information in the Registration Statement
and Prospectus and any amendments or supplements thereto as specifically
refers to such Selling Shareholder will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(vii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Shareholder hereunder have been placed in the
custody of _________ and ________________ (the "Custodians") under a
Custody Agreement (the "Custody Agreement"), duly executed and delivered by
such Selling Shareholder, with the Custodians having the authority to
deliver the Shares to be sold by such Selling Shareholder hereunder, and
that such Selling Shareholder has duly executed and delivered a Power of
Attorney (the "Power of Attorney") appointing ______________ and
_____________ as such Selling Shareholder's attorneys-in-fact (the
"Attorneys-in-Fact") with the Attorneys-in-Fact having authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 2, to authorize the delivery of the
Shares to be sold by it hereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by
this Agreement and such Custody Agreement.
(viii) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder, and the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Custodians under the Custody Agreement and of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
(ix) The obligations of such Selling Shareholders hereunder shall
not be terminated by operation of law, whether by the death or incapacity
of any individual Selling Shareholder or by the occurrence of any other
event, and if any Selling Shareholder should die or become incapacitated,
or if any other such event should occur before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or on
behalf of each Selling Shareholder in accordance with the terms and
conditions of this Agreement and of the Custody Agreement, and actions
taken by the Custodians pursuant to the Custody Agreement or by the
Attorneys-in-Fact pursuant to the Power of Attorney shall be as valid as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodians or Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity or other event.
-10-
(x) Such Selling Shareholder is not prompted to sell shares of
Common Stock by any information concerning the Company which is not
included in the Registration Statement.
(c) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
and any certificate signed by or on behalf of the Selling Shareholders as such
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Selling Shareholders to each Underwriter as
to the matters covered thereby.
5. ADDITIONAL COVENANTS. The Company and, where expressly indicated, the
Selling Shareholders, covenant and agree with the several Underwriters that:
(a) If the Registration Statement is not effective under the Act, the
Company will use its best efforts to cause the Registration Statement to become
effective as promptly as possible, and it will notify you, promptly after it
shall receive notice thereof, of the time when the Registration Statement has
become effective. The Company (i) will prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations, if required, a
Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations or otherwise or a Term Sheet or Abbreviated Term Sheet, as
applicable; (ii) will not file any amendment to the Registration Statement or
supplement to the Prospectus of which the Underwriters shall not previously have
been advised and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the Rules and
Regulations; and (iii) will promptly notify you after it shall have received
notice thereof of the time when any amendment to the Registration Statement
becomes effective or when any supplement to the Prospectus has been filed.
(b) The Company will advise the Underwriters promptly, after it shall
receive notice or obtain knowledge thereof, of any request of the Commission for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information, or of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution or threatening of any proceedings for that
purpose, and the Company will use its best efforts to prevent the issuance of
any such stop order preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Underwriters and their counsel in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as they may have reasonably designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service
-11-
of process in any jurisdiction where it is not now so qualified or required to
file such a consent or to subject itself to taxation as doing business in any
jurisdiction where it is not now so taxed. The Company will, from time to time,
file such statements, reports, and other documents, as are or may be required to
continue such qualifications in effect for so long a period as is reasonably
required for the offering, sale and distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the Underwriters,
without charge from time to time, as many copies of any Preliminary Prospectus
as they may reasonably request. The Company will deliver to, or upon the order
of, the Underwriters without charge as many copies of the Prospectus, or as it
thereafter may be amended or supplemented, as they may from time to time
reasonably request. The Company consents to the use of such Prospectus by the
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for such other purposes
and for such period of time thereafter as the Prospectus is required by law to
be delivered in connection with the offering or sale of the Shares. The Company
will deliver to the Underwriters at or before the Closing Date two signed copies
of the Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Underwriters such number of copies of
the Registration Statement, without exhibits, and of all amendments thereto, as
they may reasonably request.
(e) If, during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, any event shall occur as a result of
which, in the judgment of the Company or in your judgment or in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law.
(f) The Company will make generally available to its shareholders and will
file as an exhibit in a report pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act"), as soon as it is practicable to do so, but in any
event not later than 15 months after the effective date of the Registration
Statement, an earnings statement in reasonable detail, covering a period of at
least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise the Underwriters in writing when such statement has been so made
available.
(g) The Company will, for a period of five years from the Closing Date,
deliver to the Underwriters at their principal executive offices a reasonable
number of copies of annual reports, quarterly reports, current reports and
copies of all other documents, reports and
-12-
information furnished by the Company to its shareholders or filed with any
securities exchange pursuant to the requirements of such exchange or with the
Commission pursuant to the Act or the 1934 Act. The Company will deliver to the
Underwriters similar reports with respect to any significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements. Any report, document or other information
required to be furnished under this paragraph (g) shall be furnished as soon as
practicable after such report, document or information becomes available.
(h) The Company will apply the proceeds from the sale of the Shares as set
forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all material respects with the requirements of Item 504
of Regulation S-K.
(i) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Shares under the Act.
(j) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim financial statements of the Company for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option Closing
Date), neither the Company nor any Selling Shareholder will issue any press
releases or other communications directly or indirectly and will hold no press
conferences with respect to the Company or any of its subsidiaries, the
financial condition, results of operations, business, properties, assets or
liabilities of the Company, or the offering of the Shares, without your prior
written consent.
(l) For a period of 180 days from the Effective Date, the Company will not,
and will use its best efforts to cause its directors and officers to not,
directly or indirectly offer for sale, sell, contract to sell or otherwise
dispose of any shares of the Company's Common Stock, any securities exchangeable
for Common Stock or any other rights to acquire such shares without your prior
written consent, except for the Shares sold hereunder and except for sales of
shares of Common Stock to the Company's employees or directors pursuant to the
exercise of options under the Company's stock option plans.
(m) For a period of 180 days from the Effective Date, the Selling
Shareholders will not directly or indirectly offer for sale, sell, contract to
sell or otherwise dispose of any shares of the Company's Common Stock, any
securities exchangeable for Common Stock or rights to acquire such shares
without your prior written consent, except for the Shares sold hereunder or
request the registration for the offer or sale of any of the foregoing (or as to
which such person has the right to direct the disposition of).
-13-
(n) The Company has caused each officer and director and specific
shareholders of the Company as requested by you, to furnish to you, on or prior
to the date of this agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person shall agree
not to, directly or indirectly, offer for sale, sell, contract to sell or
otherwise dispose of any shares of the Company's Common Stock, any securities
exchangeable for Common Stock or rights to acquire such shares or request the
registration for the offer or sale of any of the foregoing (or as to which such
person has the right to direct the disposition of) for a period of 180 days
after the Effective Date without your prior written consent (the "Lockup
Agreements").
(o) The Company, and any subsidiaries of the Company in the future, will
maintain and keep accurate books and records reflecting their assets and
maintain internal accounting controls which provide reasonable assurance that
(1) transactions are executed in accordance with management's authorization, (2)
transactions are recorded as necessary to permit the preparation of the
Company's financial statements, and, if applicable, such subsidiaries on a
consolidated basis, and to maintain accountability for the assets of the Company
and such subsidiaries, (3) access to the assets of the Company and such
subsidiaries is permitted only in accordance with management's authorization,
and (4) the recorded accounts of the assets of the Company and such subsidiaries
are compared with existing assets at reasonable intervals.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Shares, as provided herein, shall
be subject to the accuracy, as of the date hereof and as of the Closing Date
(and, if applicable, the Option Closing Date), of the representations and
warranties of the Company and the Selling Shareholders contained herein, to the
performance in all material respects by the Company and the Selling Shareholders
of their covenants and obligations hereunder, and to the following additional
conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company or any Underwriter, threatened or contemplated by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have disclosed in writing to the Company on or
prior to the Closing Date (and, if applicable, the Option Closing Date), that
the Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
-14-
(c) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of Xxxxxx, Beach & Xxxxxx LLP, counsel for the
Company, addressed to you and dated the Closing Date (and, if applicable, the
Option Closing Date), to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the states or other
jurisdictions in which it is incorporated, with full corporate power and
authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement; the Company is duly qualified
to do business as a foreign corporation in good standing in each state or
other jurisdiction in which its ownership or leasing of property or conduct
of business legally requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the ability
of the Company to conduct its business as described in the Registration
Statement; and, to the knowledge of such counsel after due inquiry, the
Company has no, and never has had any subsidiary.
(ii) The Company has duly and validly authorized capital stock as
set forth under the heading "Capitalization" in the Prospectus; all
outstanding shares of Common Stock of the Company and the Shares conform to
the description thereof in the Prospectus under the heading "Description of
Capital Stock", and the outstanding shares of Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable; the
Shares to be sold by the Company have been duly authorized and, when
delivered and paid for in accordance with this Agreement, will be validly
issued, fully paid and non-assessable, and the shareholders of the Company
have no preemptive rights with respect to the Shares.
(iii) Except as described in or contemplated by the Prospectus, to
the knowledge of such counsel after due inquiry, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of capital stock of the
Company and there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of such stock.
(iv) Except as described in the Prospectus, to the knowledge of such
counsel after due inquiry, no holder of any securities of the Company or
any other person has the right, contractual or otherwise, which has not
been satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any
of the Shares or the right to have any Shares or other securities of the
Company included in the Registration Statement or the right, as a
-15-
result of the filing of the Registration Statement, to require registration
under the Act of any shares of Common Stock or other securities of the
Company.
(v) Such counsel has been advised by the staff of the Commission
that the Registration Statement has become effective under the Act and, to
the knowledge of such counsel after due inquiry, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
(vi) The Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or issue
date, comply as to form and appear on their face to be appropriately
responsive in all material respects to the requirements of the Act and the
applicable rules and regulations (except that such counsel need express no
opinion as to the financial statements and financial statement schedules
contained therein).
(vii) The descriptions in the Registration Statement and Prospectus
of contracts and other documents filed as exhibits to the Registration
Statement are accurate in all material respects; all other material
agreements between the Company and third parties expressly referenced in
the Prospectus are legal, valid and binding obligations of the Company.
(viii) No authorization, approval, consent, order, registration or
qualification of or with of any court or governmental body, authority or
agency is required with respect to the Company in connection with the
transactions contemplated by this Agreement, except such as may be required
under the Act or the Rules and Regulations or as may be required by the
NASD or under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(ix) The filing of the Registration Statement has been duly
authorized by the Board of Directors of the Company. This Agreement has
been duly authorized, executed and delivered by the Company. The
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a violation of the Company's
certificate of incorporation or bylaws or result in a breach or violation
of any of the terms and provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any properties or assets of the Company under, any statute, or under
any indenture, mortgage, deed of trust, note, loan agreement, sale and
leaseback arrangement, or any other agreement or instrument known to such
counsel after due inquiry to which the Company is a party or by which it is
bound or to which any of the properties or assets of the Company are
subject, or any order, rule or regulation known to such counsel after due
inquiry of any court or governmental agency or body having jurisdiction
over the Company or its properties, except, in the case of any such
violation, breach, default, creation or
-16-
imposition, to such extent as does not materially adversely affect the
business of the Company.
(x) To the knowledge of such counsel after due inquiry,(A) there
are no material (individually or in the aggregate) legal, governmental or
regulatory proceedings pending or threatened to which the Company is a
party or of which the business or properties of the Company is the subject
which are not disclosed in the Registration Statement and Prospectus; (B)
there are no contracts or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which are not described or filed as
required; and (C) there are no statutes or regulations required to be
described in the Registration Statement or Prospectus which are not
described as required.
(xi) To the knowledge of such counsel after due inquiry, the Company
holds all licenses, certificates, permits and approvals from all state,
federal and other regulatory authorities, and have satisfied in all
material respects the requirements imposed by regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, that are required for the Company lawfully to own, lease and
operate its properties and conduct its business as described in the
Prospectus, and, to the knowledge of such counsel after due inquiry, the
Company is conducting its business in compliance in all material respects
with all of the laws, rules and regulations of each jurisdiction in which
it conducts its business.
(xii) The statements made in the Registration Statement under the
captions "Dividend Policy", "Capitalization", "Description of Capital
Stock", and "Certain Provisions of the Certificate and Bylaws", to the
extent that they constitute summaries of documents referred to therein or
matters of law or legal conclusions, have been reviewed by such counsel and
are accurate summaries and fairly present the information disclosed
therein.
(xiii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Such counsel shall confirm that in the course of its duties in connection with
the preparation of the Registration Statement and Prospectus, nothing came to
such counsel's attention that would lead them to believe that either the
Registration Statement or Prospectus or any amendment or supplement thereto
(other than the financial statements and financial statement schedules contained
therein as to which such counsel need express no opinion) contains any untrue
statement of a material fact or omits 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.
-17-
In rendering the foregoing opinion, such counsel may rely, provided that the
opinion shall state that you and they are entitled to so rely, (1) as to matters
involving laws of any jurisdiction other than New York or the United States,
upon opinions addressed to the Underwriters of other counsel satisfactory to
them and Ropes & Xxxx, and (2) as to all matters of fact, upon certificates and
written statements of the executive officers of, and accountants for, the
Company.
(d) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of Xxxxxx, Beach & Xxxxxx LLP, counsel to the
Selling Stockholders, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(i) Each Selling Shareholder has duly authorized, executed and
delivered the Custody Agreement and Power of Attorney, appointing Marine
Midland Bank as such Selling Shareholder's Custodians with authority to
take custody of and deliver the Shares as represented by certificates on
behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement and appointing
Xxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx as such Selling Shareholder's
attorneys-in-fact with authority to execute and deliver this Agreement on
behalf of such Selling Shareholder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by
this Agreement and the Power of Attorney.
(ii) This Agreement has been duly authorized, executed and delivered
on behalf of the Selling Shareholders.
(iii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by the
Act, the NASD and state securities and Blue Sky Laws) to sell, assign,
transfer and deliver the Shares to be sold by such Selling Shareholder.
(iv) No consent, approval, authorization or order of any court, or
governmental agency or body is required for consummation of the
transactions contemplated by this Agreement in connection with the Shares
to be sold by each Selling Shareholder hereunder except such as may be
required under the Act or the Rules and Regulations or as may be required
by the NASD or under state securities laws.
(v) Immediately prior to the time of delivery of the Shares being
purchased from the Selling Shareholders, each Selling Shareholder was the
sole registered owner of the Shares to be sold by such Selling Shareholder.
Following such time of delivery, each of the Underwriters will be the
registered owner of the Shares purchased by it from such Selling
Shareholder and, assuming the Underwriters purchase such Shares in
-18-
good faith and without notice of any adverse claim, the Underwriters, in
addition to acquiring all rights of such Selling Shareholder in such
Shares, will acquire such Shares, free of any adverse claim, and free of
any lien in favor of the Company, and any restrictions on transfer imposed
by the Company.
In rendering the foregoing opinion, such counsel may rely, provided that the
opinion shall state that you and they are entitled to so rely, (1) as to matters
involving laws of any jurisdiction other than the State of New York or the
United States, upon opinions addressed to the Underwriters of other counsel
satisfactory to them and Ropes & Xxxx, and (2) as to all matters of fact, upon
certificates and written statements of the Selling Shareholders.
(e) You shall have received on the Closing Date (and, if applicable, the
Option Closing Date), from Ropes & Xxxx, counsel to the Underwriters, such
opinion or opinions, dated the Closing Date (and, if applicable, the Option
Closing Date) with respect to the incorporation of the Company, the validity of
the Shares, the Registration Statement, the Prospectus and other related matters
as you may reasonably require; the Company and Selling Shareholders shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass on such matters.
(f) You shall have received at or prior to the Closing Date from Ropes &
Xxxx a memorandum or memoranda, in form and substance satisfactory to you, with
respect to the qualification or exemption for offering and sale by the
Underwriters of the Shares under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(g) On the Effective Date and on the Closing Date (and, if applicable, the
Option Closing Date), you shall have received from KPMG Peat Marwick, LLP, a
letter or letters, dated the Effective Date and the Closing Date (and, if
applicable, the Option Closing Date), respectively, in form and substance
satisfactory to you, confirming that they are independent public accountants
with respect to the Company within the meaning of the Act and the published
Rules and Regulations, and the answer to Item 509 of Regulation S-K set forth in
the Registration Statement is correct insofar as it relates to them, and stating
to the effect set forth in Schedule III hereto.
(h) Except as contemplated in the Prospectus, (i) the Company shall not
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and (ii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company shall not have incurred
any liability or obligation, direct or contingent, or entered into transactions,
and there shall not have been any change in the capital stock or long-term debt
of the Company or any change in the condition (financial or other), net worth,
business, affairs, management, prospects or results
-19-
of operations of the Company, the effect of which, in any such case described in
clause (i) or (ii), is in your judgment so material or adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered on such Closing Date (and, if applicable, the
Option Closing Date) on the terms and in the manner contemplated in the
Prospectus.
(i) There shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or the establishing on such exchanges by
the Commission or by such exchanges of minimum or maximum prices which are not
in force and effect on the date hereof; (ii) a general moratorium on commercial
banking activities declared by either federal or state authorities; (iii) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares in the manner contemplated in the Prospectus; (iv) any calamity or
crisis, change in national, international or world affairs, act of God, change
in the international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in this clause (iv) makes it impracticable or
inadvisable in your reasonable judgment to proceed with the public offering or
the delivery of the Shares in the manner contemplated in the Prospectus; or (v)
the enactment, publication, decree, or other promulgation of any federal or
state statute, regulation, rule, or order of any court or other governmental
authority, or the taking of any action by any federal, state or local government
or agency in respect of fiscal or monetary affairs, if the effect of any such
event specified in this clause (v) in your reasonable judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares in the manner contemplated in the Prospectus.
(j) You shall have received certificates, dated the Closing Date (and, if
applicable, the Option Closing Date) and signed by the President and the Chief
Financial Officer of the Company stating that (i) they have carefully examined
the Registration Statement and the Prospectus as amended or supplemented and
nothing has come to their attention that would lead them to believe that either
the Registration Statement or the Prospectus, or any amendment or supplement
thereto as of their respective effective or issue dates, contained, and the
Prospectus as amended or supplemented at such Closing Date, contains any untrue
statement of a material fact, or omits to state a 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, and, that (ii) all
representations and warranties made herein by the Company are true and correct
at such Closing Date, with the same effect as if made on and as of such Closing
Date, and all agreements herein to be performed by the Company on or prior to
such Closing Date have been duly performed in all material respects.
-20-
(k) The Company and each of the Selling Shareholders shall not have failed,
refused, or been unable, at or prior to the Closing Date (and, if applicable,
the Option Closing Date) to have performed in all material respects any
agreement on their part to be performed or any of the conditions herein
contained and required to be performed or satisfied by them at or prior to such
Closing Date.
(l) The Company and the Selling Shareholders shall have furnished to you at
the Closing Date (and, if applicable, the Option Closing Date) such other
certificates as you may have reasonably requested as to the accuracy, on and as
of such Closing Date, of the representations and warranties of the Company and
the Selling Shareholders herein and as to the performance by the Company and the
Selling Shareholders of their obligations hereunder.
(m) The Shares shall have been approved for trading upon official notice of
issuance on the Nasdaq National Market System.
(n) Each of the Lockup Agreements described in Section 5(n) shall be in
full force and effect as of the Closing Date (and, if applicable, the Option
Closing Date).
All such opinions, certificates, letters and documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory to you and
to Ropes & Xxxx, counsel for the several Underwriters. The Company and Selling
Shareholders will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 6 shall not have been
satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you on notice to the Company and the Selling Shareholders.
7. INDEMNIFICATION.
(a) The Company and each Selling Shareholder listed on Schedule IV hereto
(the "Principal Selling Shareholders") agree, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or in any
blue sky application or other document executed by the Company or based on any
information furnished in writing by the Company, filed in any jurisdiction in
order to qualify any or all of the Shares under the securities laws thereof
("Blue Sky Application"), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements
-21-
therein, in light of the circumstances under which they were made, not
misleading; and will reimburse each Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that neither the Company
nor any Principal Selling Shareholders shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you, specifically for use in the
preparation thereof; and provided, further, that in no event shall the liability
of any such Principal Selling Shareholder for indemnification under this
subsection (a) exceed the proceeds received by such Principal Selling
Shareholder in the offering. This indemnity agreement shall be in addition to
any liabilities which the Company and each Principal Selling Shareholder,
respectively, may otherwise have.
(b) Each Selling Shareholder (other than a Principal Selling Shareholder)
agrees, jointly and not severally, to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or any Blue Sky Application or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application, in
reliance upon and in conformity with written information furnished to the
Company or any Underwriter by such Selling Shareholder specifically for use in
the preparation thereof; and will reimburse any legal or other expenses
reasonably incurred by each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Act, in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that in no event shall the liability of any such Selling Shareholder
-------
for indemnification under this subsection (b) exceed the proceeds received by
such Selling Shareholder in the offering. This indemnity agreement shall be in
addition to any liabilities which the Selling Shareholders may otherwise have.
(c) Each Underwriter agrees, jointly and not severally, to indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and, each person, if any, who controls the
Company within the meaning of the Act, and each Selling Shareholder, against any
losses, claims, damages or
-22-
liabilities, joint or several, to which the Company or any such director,
officer or controlling person or any such Selling Shareholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, any
amendment or supplement thereto, or any Blue Sky Application or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use in the preparation thereof; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer or controlling person or any such Selling Shareholder
in connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement shall be in addition to any
liabilities which the Underwriters may otherwise have.
(d) Any party which proposes to assert the right to be indemnified under
this Section 7 shall, within ten days after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim is
to be made against an indemnifying party under this Section 7, notify each such
indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve such
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party, similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall have
the right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party at the expense of
the indemnifying party has been authorized by the indemnifying party, (ii) the
indemnified party shall have been advised by such counsel in a written opinion
that there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense, or certain aspects of the
defense, of such action (in which case the indemnifying party shall not have the
right to direct the defense of such action with respect to those matters or
aspects of the defense on which a conflict exists or may exist on behalf of the
indemnified party), or (iii) the
-23-
indemnifying party shall not in fact have employed counsel to assume the defense
of such action, in any of which events such fees and expenses to the extent
applicable shall be borne by the indemnifying party. It is understood, however,
that the indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all indemnified parties not having actual or potential differing
interests among themselves, which firm shall be designated in writing by X.X.
Xxxxxxx & Sons, Inc. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent. Each indemnified
party, as a condition of such indemnity, shall cooperate in good faith with the
indemnifying party in the defense of any such action or claim.
(e) If the indemnification provided for in this Section 7 is for any
reason, other than pursuant to the terms thereof, judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right to appeal) to be
unavailable to an indemnified party under subsections (a), (b) or (c) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company, the Selling
Shareholders and the Underwriters from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault, as
applicable, of the Company, the Selling Shareholders and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as other
relevant equitable considerations. The relative benefits received by, as
applicable, the Company, the Selling Shareholders, and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Shareholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the 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 Shareholders 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 Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable
-24-
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(e) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter and (ii) no Selling Shareholder shall be required to contribute
more than the net proceeds received by such Selling Shareholder in the offering.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company and the Selling
Shareholders contained in Sections 7 and 11 herein or in certificates delivered
pursuant hereto, and the agreements of the Underwriters contained in Section 7
hereof, shall remain operative and in full force and effect regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any Underwriter or any controlling person, the Company or any of its
officers, directors or any controlling persons, or the Selling Shareholders, and
shall survive delivery of the Shares to the Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then the Company
and the Selling Shareholders shall be entitled to a further period of thirty-six
hours within which to procure another party or parties reasonably satisfactory
to you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Selling
Shareholders that you have so arranged for the purchase of such Shares, or the
Company and the Selling Shareholders notify you that they have so arranged for
the purchase of such Shares, you or the Company and the Selling Shareholders
shall have the right to postpone the Closing Date for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any persons substituted under this Section 9 with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
-25-
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you or the Company
and the Selling Shareholders as provided in subsection (a) above, the aggregate
number of Shares which remains unpurchased does not exceed one tenth of the
total Shares to be sold on the Closing Date, then the Company and the Selling
Shareholders shall have the right to require each non-defaulting Underwriter to
purchase the Shares which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters made by you or the Company
and the Selling Shareholders as provided in subsection (a) above, the number of
Shares which remains unpurchased exceeds one tenth of the total Shares to be
sold on the Closing Date, or if the Company and the Selling Shareholders shall
not exercise the right described in subsection (b) above to require the non-
defaulting Underwriters to purchase Shares of the defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company and the Selling
Shareholders except for the expenses to be borne by the Company and the
Underwriters as provided in Section 11 hereof and the indemnity and contribution
agreements in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION.
(a) This Agreement shall become effective at 1:00 p.m., St. Louis time, on
the first business day following the effective date of the Registration
Statement, or at such earlier time on or after the Effective Date as you in your
discretion shall first release the Shares for offering to the public; provided,
--------
however, that the provisions of Section 7 and 11 shall at all times be
-------
effective. For the purposes of this Section 10(a), the Shares shall be deemed
to have been released to the public upon release by you of the publication of a
newspaper advertisement relating to the Shares or upon release of telegrams,
facsimile transmissions or letters offering the Shares for sale to securities
dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it becomes
effective in accordance with Section 10(a) by notice to the Company and the
Selling Shareholders; provided, however, that the provisions of this Section 10
-------- -------
and of Section 7 and Section 11 hereof shall at all times be effective. In the
event of any termination of this Agreement pursuant to Section 9 or this Section
10(b) hereof, the Company and the Selling Shareholders shall not then be under
any liability to any Underwriter except as provided in Section 7 or Section 11
hereof.
-26-
(c) This Agreement may be terminated by you at any time at or prior to the
Closing Date by notice to the Company and the Selling Shareholders if any
condition specified in Section 6 hereof shall not have been satisfied on or
prior to the Closing Date. Any such termination shall be without liability of
any party to any other party except as provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the Company
and the Selling Shareholders, as to any obligation of the Underwriters to
purchase the Option Shares, if any condition specified in Section 6 hereof shall
not have been satisfied at or prior to the Option Closing Date or as provided in
Section 9 of this Agreement. If you terminate this Agreement as provided in
Sections 10(b), 10(c) or 10(d), you shall notify the Company and the Selling
Shareholders by telephone or telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Company will bear and pay the costs and
expenses incident to the registration of the Shares and public offering thereof,
including, without limitation, (a) the fees and expenses of the Company's
accountants and the fees and expenses of counsel for the Company, (b) the
preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement, the Agreement
Among Underwriters, the Selected Dealer Agreement, Underwriters' Questionnaires
and Powers of Attorney and Blue Sky Memoranda, (c) the furnishing of copies of
such documents (except as otherwise expressly provided in Section 5(d) hereof)
to the Underwriters, (d) the registration or qualification of the Shares for
offering and sale under the securities laws of the various states, including the
reasonable fees and disbursements of Underwriters' counsel relating to such
registration or qualification, (e) the fees payable to the NASD and the
Commission in connection with their review of the proposed offering of the
Shares, (f) all printing and engraving costs related to preparation of the
certificates for the Shares, including transfer agent and registrar fees, (g)
all initial transfer taxes, if any, (h) all fees and expenses relating to the
authorization of the Shares for trading on the Nasdaq National Market System,
(i) all travel expenses, including air fare and accommodation expenses, of
representatives of the Company in connection with the offering of the Shares and
(j) all of the other costs and expenses incident to the performance by the
Company of the registration and offering of the Shares; provided, however, that
-------- -------
the Underwriters will bear and pay the fees and expenses of the Underwriters'
counsel (other than fees and disbursements relating to the registration or
qualification of the Shares for offering and sale under the securities laws of
the various states), the Underwriters' out-of-pocket expenses, and any
advertising costs and expenses incurred by the Underwriters incident to the
public offering of the Shares; and provided, further, that the Company will bear
and pay the fees and expenses of the Selling Shareholders' counsel.
If this Agreement is terminated by you in accordance with the provisions of
Section 10(c), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel to the Underwriters.
-27-
12. DEFAULT OF SELLING SHAREHOLDERS. Failure or refusal by any of the
Selling Shareholders to sell and deliver on the Closing Date the Shares agreed
to be sold and delivered by such Selling Shareholder shall in no manner relieve
the other Selling Shareholders or the Company of their respective obligations
under this Agreement. If any Selling Shareholder should fail or refuse to sell
and deliver his Shares, the remaining Selling Shareholders shall have the right
hereby granted to increase, pro rata or otherwise, the number of Shares to be
sold by them hereunder to the total number of Shares to be sold by all Selling
Shareholders as set forth in Schedule I. If the remaining Selling Shareholders
do not fully exercise the right to increase the number of Shares to be sold by
them, the Underwriters, at your option, will have the right to elect to purchase
or not to purchase the Shares to be sold by the Company and the remaining
Selling Shareholders. In the event the Underwriters purchase the Shares of the
Company and such other Selling Shareholders pursuant to this Section 12, the
Closing Date shall be postponed for a period of not more than seven days in
order that the Registration Statement and Prospectus or other documents may be
amended or supplemented to the extent necessary under the provisions of the Act
and the Rules and Regulations or under the securities laws of any jurisdiction.
If the Underwriters determine not to purchase the Shares of the Company and the
other Selling Shareholders, if any, this Agreement shall terminate and neither
the Company nor the Underwriters nor any other Selling Shareholder shall be
under any obligation under this Agreement except as provided in Section 7 hereof
and except for the obligation of the Company to pay for such expenses as are set
forth in Section 11 hereof. Nothing herein shall relieve a defaulting Selling
Shareholder from liability for his default or from liability under Section 7
hereof or for expenses imposed by this Agreement upon such Selling Shareholder.
13. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate, facsimile number (314)
955-7387, or if sent to the Company shall be mailed, delivered, sent by
facsimile transmission, or telegraphed and confirmed to the Company at World of
Science, Inc., Building Four, 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000,
Attention: ________________, facsimile number (000) 000-0000, or if sent to any
Selling Shareholder shall be mailed, delivered, sent by facsimile transmission
or telegraphed and confirmed to such Selling Shareholder, c/o the Attorney-in-
Fact at _______________. Notice to any Underwriter pursuant to Section 7 shall
be mailed, delivered, sent by facsimile transmission, or telegraphed and
confirmed to such Underwriter's address as it appears in the Underwriters'
Questionnaire furnished in connection with the offering of the Shares or as
otherwise furnished to the Company and the Selling Shareholder.
14. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Selling Shareholders, and the Company and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity, other than the parties hereto and
-28-
their respective successors and assigns and the controlling persons, officers
and directors referred to in Section 7, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained;
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns and said controlling persons and said officers
and directors, and for the benefit of no other person, corporation or other
entity. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings with the Company and the Selling Shareholders under this
Agreement you shall act on behalf of each of the several Underwriters, the
Company, and the Selling Shareholders shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by you on behalf of the Underwriters, as if the same shall have been made
or given in writing by the Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
16. PRONOUNS. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
17. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri.
-29-
If the foregoing is in accordance with your understanding, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company, each of the Selling
Shareholders and the Underwriters.
WORLD OF SCIENCE, INC.
By: _____________________________
Title: _____________________________
Selling Shareholders Named in Schedule I Hereto
By: _______________________________
Attorney-in-Fact
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule II hereto.
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
By: X.X. XXXXXXX & SONS, INC.
By: ____________________________________
Title: __________________________________
-30-
SCHEDULE I
Number of
Selling Shareholders Firm Shares
-------------------- -----------
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
Total _____
-31-
SCHEDULE II
Name Number of Shares
---- ----------------
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
____________________________ _____
Total _____
-32-
SCHEDULE III
Pursuant to Section 6(g) of the Underwriting Agreement, KPMG Peat
Marwick, LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company within the meaning of the Act and the applicable Rules and
Regulations thereunder.
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included in the Prospectus or the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the applicable Rules and Regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants ("AICPA") of the unaudited interim financial statements,
selected financial data, pro forma financial information, prospective
financial statements and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the Representatives of the Underwriters (the
"Representatives").
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, performing the procedures specified by the AICPA for a
review of interim financial information as discussed in SAS No. 71, Interim
Financial Information, on the latest available interim financial statements
of the Company, inspection of the minute books of the Company since the
date of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of financial position
and statements of consolidated cash flows included in the Prospectus
for them to be in conformity with generally accepted accounting
principles, or the unaudited statements of income, statements of
consolidated financial position and statements of cash flows included
in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations thereunder.
-33-
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items
in the unaudited financial statements from which such data and items
were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements included in
the Prospectus.
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included in the Prospectus.
(D) any unaudited pro forma condensed financial statements included in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
those statements.
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the capital stock or
any increase in the long-term debt of the Company, or any decreases in
working capital, net current assets or net assets or other items
specified by the Representatives, or any changes in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter.
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in
Clause (E) there were any decreases in net revenues or operating
profit or the total or per share amounts of net income or any other
changes in any other items specified by the Representatives, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for changes, decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter.
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they
have carried out certain specified
-34-
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives, which are derived
from the general accounting records of the Company for the periods covered
by their reports and any interim or other periods since the latest period
covered by their reports, which appear in the Prospectus, or in Part II of,
or in exhibits and schedules to, the Registration Statement specified by
the Representative, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
have found them to be in agreement.
-35-
SCHEDULE IV
PRINCIPAL SELLING SHAREHOLDERS
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
-36-
