EXHIBIT 1.1
3,250,000 Shares
XXXX COMPUTER CORPORATION
COMMON STOCK
(PAR VALUE $0.001 PER SHARE)
UNDERWRITING AGREEMENT
___________ ___, 1998
XXXXXX, XXXXX XXXXX, INCORPORATED
XXXXXX XXXXXX XXXXXXXX & CO., INC.
As Representatives of the
Several Underwriters Identified
In Schedule I Hereto,
c/o Ferris, Xxxxx Xxxxx, Incorporated
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Ladies and Gentlemen:
SECTION 1. INTRODUCTION. Xxxx Computer Corporation, a Virginia
corporation (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters"), for which Xxxxxx, Xxxxx Xxxxx, Inc. ("FBW") and
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. are acting as the Representatives (the
"Representatives"), an aggregate of 3,250,000 shares of Common Stock, par
value $0.001 per share ("Stock"), of the Company; and the Company and the
individuals listed on Schedule II hereto ("Selling Stockholders") propose,
subject to the terms and conditions stated herein, to sell to the
Underwriters, at the election of the Underwriters, up to 487,500 additional
shares of Stock. The 3,250,000 shares to be sold by the Company are herein
called the "Firm Shares" and the 487,500 additional shares to be sold by the
Company and the Selling Stockholders are herein called the "Optional Shares."
Up to 243,750 shares of the Optional Shares are to be sold by the Selling
Stockholders and are herein referred to as the "Selling Stockholders'
Optional Shares." Up to 243,750 shares of the Optional Shares are to be sold
by the Company and are herein
referred to as the "Company's Optional Shares." The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 3
hereof are herein collectively called the "Shares."
It is contemplated that the closing with respect to the Firm
Shares will occur concurrently with the closing of (i) a merger of a subsidiary
of the Company with and into Xxxx Computer Corporation, a Delaware corporation
("Xxxx") (the "Merger") pursuant to which _________ shares of the Company's
Stock will be issued in a share-for-share exchange for all of the outstanding
shares of common stock of Xxxx, and (ii) the acquisition by the Company of 100%
of the outstanding stock of International Data Products, Corp. ("IDP"), through
a subsidiary, and substantially all the net assets of IDP's affiliate, Puerto
Rico Industrial Manufacturing Operations, Corp. ("PRIMO") (the acquisition of
the IDP stock and the PRIMO assets are collectively referred to herein as the
"IDP Acquisition").
SECTION 2A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No.
333-47631) under the Securities Act of 1933, as amended (the "Act"), with
respect to the Shares, including a form of prospectus subject to completion,
has been prepared by the Company in conformity with the requirements of the
Act and the rules and regulations of the Securities and Exchange Commission
(the "Commission") thereunder (the "Rules and Regulations"). Such
registration statement has been filed with the Commission under the Act and
one or more amendments to such registration statement may also have been so
filed. After the execution of this Agreement, the Company shall file with the
Commission a Prospectus (as hereinafter defined) which shall have been
provided to, and approved by, the Representatives prior to the filing
thereof. As used in this Agreement, the term "Registration Statement" means
such registration statement, as amended and revised at the time when such
registration statement becomes effective, including all financial schedules
and exhibits thereto and any information omitted therefrom pursuant to Rule
430A under the Act and included in the Prospectus (as hereinafter defined).
The term "Preliminary Prospectus" means each prospectus subject to completion
contained in such registration statement or any amendment thereto before the
Registration Statement was or is declared effective, or such prospectus
subject to completion filed pursuant to Rule 424(a) under the Act which omits
the information permitted under Rule 430A. The term "Prospectus" means a
prospectus, including any amendments or supplements thereto, relating to the
Registration Statement that includes all the information contained in the
most recently filed Preliminary Prospectus in addition to such information
which may have been omitted in any Preliminary Prospectus pursuant to Rule
430A under the Act. To the extent the Company relies on Rule 462(b) under the
Act to increase the maximum aggregate offering price, the Company shall have
made in a timely manner any filing required under Rule 462(b) and such
filing shall be in compliance with such Rule. Copies of the Registration
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Statement, any amendment thereto and any Preliminary Prospectus
filed with the Commission have been delivered by the Company to the
Representatives on behalf of the Underwriters. The Registration Statement and
any post-effective amendments thereto have been declared effective by the
Commission.
(b) The Commission has not issued any order suspending the
effectiveness of the Registration Statement, any post-effective amendment
thereto or Rule 462(b) Registration Statement, if any, or preventing or
suspending the use of any Preliminary Prospectus, the Prospectus, the
Registration Statement or any amendment or supplement thereto or suspending the
registration of the Shares, nor has the Commission instituted or threatened to
institute any proceedings with respect to such an order. Each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the Rules and Regulations thereunder, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein.
(c) The Registration Statement conforms, and the Prospectus
(or the most recent Preliminary Prospectus) and any further amendments or
supplements to the Registration Statement or the Prospectus will conform, in all
material respects, to the requirements of the Act and the Rules and Regulations
thereunder. The Registration Statement and any post-effective amendment thereto,
as of the applicable effective date or dates, and each Preliminary Prospectus
and Prospectus, as of the date each such Preliminary Prospectus or Prospectus is
filed and at all times subsequent thereto up to and including the Closing Date
(as defined in Section 5 hereof) and any Option Closing Date (as defined in
Section 5 hereof), and during such longer period during which the Prospectus may
be required to be delivered in connection with sales to any dealer and during
such longer period until any post-effective amendment thereto shall become
effective, do not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use therein,
and no event will have occurred which should have been set forth in an amendment
or supplement to the Registration Statement or the Prospectus which has not then
been set forth in such an amendment or supplement.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Virginia, its
jurisdiction of incorporation, and has been duly qualified as a foreign
corporation for the transaction of business and is
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in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except for those jurisdictions in which the failure to so
qualify has not had and will not have a Material Adverse Effect (as
hereinafter defined), and has all power and authority necessary to own or
hold its properties and to conduct the business in which it is engaged. Each
subsidiary (as defined in Rule 405 under the Act) of the Company in existence
and to be in existence as of the Closing Date (as defined Section 5 hereof)
(each a "Subsidiary" and together the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and each has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business so as to require such
qualification, except for those jurisdictions in which the failure to so
qualify has not had and will not have a Material Adverse Effect (as
hereinafter defined). "Material Adverse Effect" means, when used in
connection with the Company, any development, change or effect that is
materially adverse to the business, properties, assets, net worth, condition
(financial or other), results of operations, or prospects of the Company and
its Subsidiaries, taken as a whole.
(e) The Company has the duly authorized capitalization as
set forth in the Prospectus (or most recent Preliminary Prospectus) and will
have the adjusted capitalization set forth therein at the Closing Date, based
on the assumptions set forth therein. All of the shares of capital stock of
the Company to be issued and outstanding as of the Closing Date have been
duly and validly authorized and, when issued, will be fully paid and
non-assessable, without personal liability attaching to the ownership
thereof, and none of such shares will have been issued, owned, or held in
violation of any preemptive or other rights of security holders or other
persons to acquire securities of the Company. As of the Closing Date, the
securities of the Company including, without limitation, the Stock and the
Shares conform in all material respects to all statements relating thereto
contained in the Registration Statement or the Prospectus. With respect to
each Subsidiary of the Company, all of the issued and outstanding shares of
capital stock are fully paid and non-assessable, without personal liability
attaching to the ownership thereof, and none of such shares have been issued
or are owned or held in violation of any preemptive or other rights of
security holders or other persons to acquire securities of the Company and
(except as otherwise described in the Prospectus or the most recent
Preliminary Prospectus) are or, as of the Closing Date, will be owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims. Other than as disclosed in the Prospectus
(or the most recent Preliminary Prospectus), there are no holders of the
securities of the Company having rights to registration thereof or preemptive
rights to purchase capital stock of the Company. Except as created hereby or
described in the Prospectus or most recently filed Preliminary Prospectus,
there are no commitments, plans or arrangements to issue, and no outstanding
options, warrants or other rights, calling for issuance of, any shares of
capital stock of the Company or any of its Subsidiaries or any security or
other instrument which, by its terms, is convertible into,
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exercisable for, or exchangeable for capital stock of the Company or any of
its Subsidiaries. Except as described in the Prospectus or the most recently
filed Preliminary Prospectus, there is no outstanding security or other
instrument which, by its terms, is convertible into, exercisable for, or
exchangeable for capital stock of the Company or any of its Subsidiaries.
(f) The Firm Shares and the Company's Optional Shares have
been duly and validly authorized. When the Firm Shares and the Company's
Optional Shares are issued and delivered against payment therefor as provided
herein, they will be duly and validly issued, fully paid and non-assessable,
will not have been issued in violation of any preemptive or other rights of
security holders or other persons to acquire securities of the Company and will
conform in all material respects to all statements relating thereto in the
Registration Statement and the Prospectus. Good and marketable title to the Firm
Shares and the Company's Optional Shares will pass to the Underwriters on the
Closing Date and Option Closing Date free and clear of any lien, encumbrance,
security interest, claim or other restriction whatsoever. The Company has
received, subject to notice of issuance, approval to have the Shares qualified
for inclusion on the Nasdaq National Market ("NNM") and the Company knows of no
reason or set of facts which is likely to adversely affect such approval. The
Stock is registered pursuant to Section 12(g) under the Securities Exchange Act
of 0000 (xxx "Xxxxxxxx Xxx").
(g) The financial statements and the related notes and
schedules thereto included in the Registration Statement and the Prospectus or
the most recent Preliminary Prospectus present fairly the financial condition,
results of operations, stockholders' equity and cash flows, and the other
information purported to be shown therein, of the Company and its Subsidiaries,
on a consolidated basis at the respective dates and for the respective periods
specified therein. Such financial statements and the related notes and schedules
thereto have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise noted therein) and have been properly derived from the books and
records of the Company and such financial statements as are audited have been
examined by Ernst and Young LLP, who are independent public accountants within
the meaning of the Act and the Rules and Regulations, as indicated in their
reports filed therewith. The selected financial information and statistical data
set forth under the captions "Prospectus Summary--Summary Financial Data,"
"Capitalization," "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business" in the
Prospectus (or the most recent Preliminary Prospectus) present fairly, on the
basis stated in the Prospectus or such Preliminary Prospectus, the information
included therein and have been properly derived from the financial statements
and other operating records of the Company and its Subsidiaries. No other
financial statements or financial information, except that which is contained in
the Registration Statement, the Prospectus or the most recent Preliminary
Prospectus, is required by Form S-1, the Rules and
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Regulations, or otherwise, to be included in the Registration Statement, the
Prospectus or such Preliminary Prospectus.
(h) Since the respective dates as of which information is
given in the Prospectus (or the most recent Preliminary Prospectus), and
except as may be stated therein in connection with the Merger, the IDP
Acquisition or otherwise, (i) neither the Company, nor any of its
Subsidiaries has entered into any transaction or incurred any liability or
obligation, contingent or otherwise, which is material to the Company and its
Subsidiaries, taken as a whole; (ii) there has not been any change in the
outstanding capital stock of the Company or any of its Subsidiaries, or any
issuance of options, warrants or rights to purchase the capital stock of the
Company or any of its Subsidiaries, or any material increase in the long-term
debt of the Company or any of its Subsidiaries, or any material adverse
change in the business, condition (financial or otherwise) or results of
operations of the Company or any of its Subsidiaries; (iii) no loss or damage
(whether or not insured) to the properties of the Company or any of its
Subsidiaries has been sus tained which has resulted in a Material Adverse
Effect; (iv) neither the Company nor any of its Subsidiaries has paid or
declared any dividend or other distribution with respect to its capital
stock; and (v) there has not been any change, contingent or otherwise, in the
direct or indirect control of the Company or any of its Subsidiaries nor, to
the best knowl edge of the Company, do there exist any circumstances which
would likely result in such a change.
(i) The Company and each of its Subsidiaries has filed all
foreign, federal, state and local income, franchise and other material tax
returns required to be filed (or have obtained extensions with respect thereto)
and has paid all taxes shown as due thereunder (except taxes being contested in
good faith as to which adequate provision has been made to the extent required
by generally accepted accounting principles) and all assessments received by it
to the extent that payment has become due, and the Company has no knowledge of
any tax deficiency which might be assessed against the Company or any of its
Subsidiaries which, if so assessed, would be reasonably expected to have a
Material Adverse Effect.
(j) The Company and each of its Subsidiaries maintains
insurance of the types and in amounts which the Company reasonably believes to
be adequate for its business, in such amounts and with such deductibles as are
customary for companies in the same or similar business, all of which insurance
is in full force and effect.
(k) Other than as set forth in the Prospectus (or most recent
Preliminary Prospectus), there are no legal or governmental proceedings pending
to which the Company or any of its Subsidiaries is a party or to which any
property of the Company or any of its Subsidiaries is the subject which (i)
challenges the validity of the capital stock of the Company or this Agreement or
of any action taken or to be taken by the Company pursuant to or in connection
herewith or therewith; (ii) is required to be disclosed in the
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Registration Statement or Prospectus (or most recent Preliminary Prospectus;
or (iii) if determined adversely to the Company or any of its Subsidiaries,
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, and to the Company's best knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others. Any such proceedings that are set forth in the
Prospectus (or most recent Preliminary Prospectus) are fairly and accurately
summarized therein.
(l) The Company has full legal right, power and authority to
enter into this Agreement, the Merger and the IDP Acquisition and to consummate
the transactions and perform its obligations as provided for herein. All
necessary corporate proceedings of the Company have been duly taken to authorize
the execution, delivery and performance by the Company of this Agreement and the
operative documents relating to the Merger and the IDP Acquisition, except for
shareholder approval to be obtained pursuant to action at a meeting of Xxxx'x
shareholders scheduled for April 30, 1998. This Agreement has been duly
authorized, executed and delivered by the Company and, assuming it is a binding
agreement of yours, constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of creditors' rights and the application of equitable
principles relating to the availability of remedies and except as rights to
indemnity or contribution may be limited by federal or state securities laws and
the public policy underlying such laws).
(m) The Company's execution and performance of this Agreement,
including, without limitation, application of the net proceeds of the offering,
if and when received, as described in the Prospectus (or most recent Preliminary
Prospectus) under the caption "Use of Proceeds," will not violate any provision
of the Charter or Bylaws or any similar constitutive documents of the Company or
any of its Subsidiaries, or any law, rule or regulation applicable to the
Company or any of its Subsidiaries of any government, court, regulatory body,
administrative agency or other governmental body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective businesses or
properties, and will not result in the breach, or be in contravention, of any
loan agreement, lease, franchise, license, note, bond, other evidence of
indebtedness, indenture, mortgage, deed of trust, voting trust agreement,
stockholders' agreement, note agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which their
respective properties are or may be subject, or any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of its Subsidiaries
of any government, arbitrator, court, regulatory body or administrative agency
or other governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its Subsidiaries or any of their respective
businesses, activities or properties, except those, if any, that are described
in the Prospectus (or most recent
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Preliminary Prospectus) or those which would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) All executed agreements or copies of executed
agreements filed as exhibits to the Registration Statement to which the
Company or any of its Subsidiaries is a party or by which any of them is or
may be bound or to which any of their respective assets, properties or
businesses is or may be subject have been duly and validly authorized,
executed and delivered by the Company or the relevant Subsidiary or
Subsidiaries and, assuming that each is a binding obligation of the other
party or parties thereto, constitutes the legal, valid and binding agreement
of the Company or such Subsidiary or Subsidiaries, enforceable against it or
them in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting enforcement of creditors' rights, and the
application of equitable principles relating to the availability of remedies,
and except as rights to indemnity or contribution may be limited by federal
or state securities laws and the public policy underlying such laws). The
descriptions in the Prospectus and Preliminary Prospectus of contracts and
other documents are accurate and fairly present in all material respects the
information required to be disclosed with respect thereto by the Act and the
Rules and Regulations, and there are no contracts or other documents which
are required by the Act or the Rules and Regulations to be described in the
Prospectus or filed as exhibits to the Registration Statement which are not
described or filed as required, and the exhibits which have been filed are
complete and correct copies of the documents of which they purport to be
copies.
(o) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all real property and good title to all other
property and assets owned thereby as set forth in the Prospectus (or most recent
Preliminary Prospectus), in each case free and clear of all liens, security
interests, pledges, charges, mortgages and other defects and encumbrances,
except such as are described in the Prospectus (or most recent Preliminary
Prospectus) or such as do not materially affect the value of such property, and
do not interfere with the use made and proposed to be made of such property by
the Company or its Subsidiaries; and any real properties and buildings held
under lease by the Company or any of its Subsidiaries are held under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries. No real property owned, leased,
licensed or used by the Company or any of its Subsid iaries is situated in an
area which is, or to the best knowledge of the Company, will be subject to
zoning, use, or building code restrictions which would prohibit (and no state of
facts relating to the actions or inaction of another person or entity or his or
its ownership, leasing, licensing, or use of any real or personal property
exists or will exist which would prevent) the continued effective ownership,
leasing, licensing, or use of such real property in the business of the Company
or its Subsidiaries as presently conducted or as the Prospectus (or most recent
Preliminary Prospectus) indicates any of them contemplate
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conducting such business in the future, except as disclosed in the Prospectus
(or most recent Preliminary Prospectus).
(p) No consent, authorization, approval, order, license,
certificate, declaration or permit of or from, or filing with, any
governmental or regulatory authority, agent, board or other body is required
for the consummation of the Merger and the IDP Acquisition, the issue and
sale of the Shares by the Company and the execution, delivery or performance
by the Company of this Agreement except for the registration under the Act of
the Shares and the registration of the Stock under the Exchange Act, each of
which has been made or obtained, and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or blue sky laws in connection with the purchase and
distribution of the Shares by the Underwriters, and such approval as may be
required from the NNM to have the Shares qualified for inclusion thereon.
Except as set forth in the Registration Statement, the Company has obtained
all consents required of any party to any contract, agreement, instrument,
lease, license, arrangement or understanding to which the Company or any of
its Subsidiaries is a party, or to which any of their properties or assets
are subject, for the execution, delivery or performance of this Agreement or
the consummation of the Merger and the IDP Acquisition.
(q) Neither the Company nor any of its Subsidiaries is in
violation of its Articles of Incorporation or Bylaws or similar constitutive
documents; neither the Company nor any of its Subsidiaries is (or, as a result
of the passage of time) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound,
which default may reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, or which could in any way, individually or
in the aggregate, impair or delay the consummation of the transactions
contemplated by this Agreement or the offering of the Shares in the manner
contemplated herein and in the Registration Statement and the Prospectus (or
most recent Preliminary Prospectus), and each such indenture, mortgage, deed of
trust, loan agreement lease or other agreement or instrument is in full force
and effect and is a legal, valid and binding obligation of the Company or its
Subsidiary or Subsidiaries, as the case may be and, to the best knowledge of the
Company, of each other party thereto.
(r) The statements set forth in the Prospectus (or most recent
Preliminary Prospectus) under the caption "Description of Capital Stock,"
insofar as they purport to constitute a summary of the terms of the Company's
securities, and under the captions "Shares Eligible for Future Sale,"
"Business," "Management," "The Reorganization and the IDP Acquisition" and
"Underwriting" (except, with respect to the statements under the caption
"Underwriting," for information furnished in writing to the Company by the
Underwriters through the Representatives expressly for use therein), insofar as
they purport to describe the provisions of the laws and the provisions of
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documents referred to therein, are accurate and fairly summarize such
provisions in all material respects.
(s) The Company is not and, after giving effect to the
offering and sale of the Shares, the Merger and the IDP Acquisition, will not
be, an "investment company" or an "affiliated person" of or a "promoter" or
"principal underwriter" of or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act of 1940 (the "Investment
Company Act").
(t) The Company and each of its Subsidiaries owns or is
licensed or otherwise has sufficient right to use the proprietary knowledge,
inventions, patents, trademarks, service marks, trade names, logo marks and
copyrights ("Intellectual Property") currently used in the conduct of their
respective businesses, except for those patents, trademarks, service marks,
trade names, logo marks or copyrights with respect to which the failure to
own or license same would not have a Material Adverse Effect. To the best
knowledge of the Company, none of the activities engaged in by the Company or
any of its Subsidiaries infringes upon or otherwise conflicts with
Intellectual Property rights of others, except for any such conflicts that
would not have a Material Adverse Effect, and no claims have been asserted
against the Company or any of its Subsidiaries by any person with respect to
the use of any such rights or challenging or questioning the validity or
effectiveness of any such rights.
(u) No labor disturbance by, or labor dispute with, the
employees of the Company or any of its Subsidiaries exists or, to the Company's
knowledge, is threatened or imminent which may have a Material Adverse Effect.
(v) Neither the Company nor any Subsidiary is subject to any
liability arising under or as a result of the application of the provisions of
the Act.
(w) To the best knowledge of the Company, each of the Company
and its Subsidiaries (i) is in compliance with all environmental, safety, health
or similar law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws") applicable to its business; (ii) has
received all permits, licenses or other approvals required under applicable
Environmental Laws to conduct its business; and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except where such
noncompliance, failure to receive such license or approval or failure to comply
would not have a Material Adverse Effect.
(x) To the best knowledge of the Company, each of the Company
and its Subsidiaries is in compliance with all federal or state laws, including
the rules and regulations promulgated thereunder, relating to discrimination in
the hiring, promotion or pay of employees, any applicable federal or state wages
and hours law, and the provisions
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of the Employee Retirement Income Security Act of 1974, as amended,
applicable to its business, except where such noncompliance would not have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining or other labor contract.
(y) The Company and each of its Subsidiaries has full
corporate power and authority and has obtained and holds all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and have made all declarations and filings with, all U.S. and foreign,
federal state or provincial, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its business
in the manner described in the Prospectus (or most recent Preliminary
Prospectus), except to the extent that the failure to obtain or file would
not have Material Adverse Effect, and except as otherwise described in the
Prospectus (or most recent Preliminary Prospectus). Neither the Company nor
any of its Subsidiaries has received any notice of proceedings relating to,
and does not have reason to believe that any governmental body or agency is
considering limiting, suspending, modifying or revoking, any such consent,
authorization, approval, order, certificate or permit which, individually or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(z) None of the Company, its Subsidiaries, or any other person
associated with or acting on behalf of the Company or any Subsidiary, including,
without limitation, any director, officer, agent, or employee of the Company or
any Subsidiary has, directly or indirectly, while acting on behalf of the
Company (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity, (ii)
made any unlawful contribution to any candidate for foreign or domestic office,
or to any foreign or domestic government officials or employees or other person
charged with similar public or quasi-public duties, other than payments required
or permitted by the laws of the United States or any jurisdiction thereof or to
foreign or domestic political parties or campaigns from corporate funds, or
failed to disclose fully any contribution in violation of law, (iii) violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iv)
made any other unlawful payment.
(aa) None of the Company, its Subsidiaries, or, to the
Company's best knowledge, any employee or agent of the Company or any
Subsidiary, has made any payment of funds of the Company or any Subsidiary, or
received or retained any funds which constitutes a violation by the Company or
any Subsidiary of any law, rule or regulation or of a character required to be
disclosed in the Prospectus (or most recent Preliminary Prospectus).
(bb) The Company and each of its Subsidiaries has filed with
the applicable foreign and domestic regulatory authorities each and every
statement, report, information or form required by any applicable law,
regulation or order, except where the
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failure to so file would not have a Material Adverse Effect, and all such
filings or submissions were in compliance with applicable laws when filed,
and no deficiencies have been asserted by any regulatory commission, agency
or authority with respect to such filings or submissions, except where the
failure to so file or cure would not have a Material Adverse Effect. The
Company and each of its Subsidiaries has maintained in full force and effect
all licenses and permits necessary or proper for the conduct of its business,
except where the failure to do so would not have a Material Adverse Effect,
and neither the Company nor any of its Subsidiaries has received any
notification that any revocation or limitation thereof is threatened or
pending that would have such an Effect. Except as disclosed in the
Registration Statement and the Prospectus (or most recent Preliminary
Prospectus), there is not pending any change under any law, regulation,
license or permit that would have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any notice of, or, to the
best knowledge of the Company, been threatened with or is under investigation
with respect to, a violation or a possible violation of any provision of any
law, regulation or order, except such violation or violations as would not
have a Material Adverse Effect.
(cc) The books, records and accounts and systems of
internal accounting controls of Xxxx and the Company currently comply with
the requirements of Section 13(b)(2) of the Exchange Act.
(dd) None of the Company, any of its Subsidiaries or any of
its officers, directors or affiliates (within the meaning of the Rules and
Regulations) has taken, directly or indirectly, any action designed to stabilize
or manipulate the price of any security of Xxxx or the Company, or which has
constituted or which might in the future reasonably be expected to, cause or
result in, stabilization or manipulation of the price of any security of Xxxx or
the Company, to facilitate the sale or resale of the Shares or otherwise.
(ee) The minute books of the Company and each of its
Subsidiaries are current and contain a correct and complete record of all
corporate action taken by the respective Boards of Directors and stockholders of
the Company and the Subsidiaries and all signatures contained therein are true
signatures of the persons whose signatures they purport to be.
(ff) Except as described in the Prospectus (or most recent
Preliminary Prospectus), to the best knowledge of the Company there is no loss
or threatened loss of any key customer, supplier, or account which loss would
result in a Material Adverse Effect.
(gg) Neither the Company nor any of its Subsidiaries has
incurred, directly or indirectly, any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in connection
with the offering and sale of the Shares contemplated by this Agreement other
than as described in the Prospectus.
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(hh) There are no business relationships or related party
transactions of the nature described in Item 404 of Regulation S-K of the Rules
and Regulations involving the Company, any of its Subsidiaries and any person
referred to in Items 401 or 404 of such Regulation S-K, except as required to be
described, and as so described, in the Prospectus (or most recent Preliminary
Prospectus).
(ii) The Company and each applicable Subsidiary has full legal
right, power and authority to enter into the Merger and the IDP Acquisition. All
necessary corporate proceedings of the Company and each applicable Subsidiary
have been duly taken to authorize the execution, delivery and performance by
each party to the Merger and the IDP Acquisition of the operative agreements,
instruments and documents relating to the Merger and the IDP Acquisition, except
for shareholder approval to be obtained pursuant to action at a meeting of
Xxxx'x shareholders scheduled for April 30, 1998. Each such operative
agreements, instruments and documents have been duly authorized, executed and
delivered by the Company and each such Subsidiary, as the case may be, and are
binding against the Company and each such Subsidiary in accordance with the
terms of such agreements, instruments and documents.
(jj) Except as disclosed in the Prospectus, the Company and
each Subsidiary is in material compliance with all terms and conditions of each
material contract or agreement to which it is a party and each such material
contract has been filed as an exhibit to the Registration Statement. The
Prospectus accurately and adequately describes each such material contract or
agreement required to be included therein by the Rules and Regulations. Except
as disclosed in the Prospectus, the Company has complied in all material
respects with all applicable statutory and regulatory requirements with respect
to each such material contract or agreement and each such bid, quotation, or
proposal submitted by the Company to the Government or any prospective prime
contractor or the Government within the past two years.
(kk) Except as disclosed in the Prospectus, any and all facts
set forth in or acknowledged by the Company or any Subsidiary in any
certifications, representations, or disclosure statements submitted by the
Company or any Subsidiary with respect to any Government contract awarded to the
Company or any Subsidiary within the past two years were current, accurate, and
complete in all material respects, as of the date of submission.
(ll) Except as disclosed in the Prospectus, neither the
Government nor any prime contractor has notified the Company or any Subsidiary
in writing that the Company or any Subsidiary has breached or violated any
regulation, statute, certification, representation, or clause, provision, or
requirement with respect to any contract awarded to the Company or any
Subsidiary within the past two years or with respect to any bid,
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quotation, or proposal submitted by the Company or any Subsidiary within the
past two years.
(mm) Except as disclosed in the Prospectus, neither the
Company nor any Subsidiary is currently debarred or suspended from doing
business with the Government and does not know of any facts that would warrant
the institution of debarment or suspension proceedings against the Company or
any Subsidiary in the future.
(nn) No show cause notices or cure notices have been issued
against the Company or any Subsidiary on any Government contracts awarded to the
Company or any Subsidiary within the past two years.
(oo) No default terminations have been issued against the
Company or any Subsidiary on any Government contracts awarded to the Company
within the past two years.
(pp) No negative determinations of responsibility have been
issued against the Company or any Subsidiary with respect to any bid, quotation,
or proposal submitted by the Company or any Subsidiary within the past two years
with respect to a Government contract.
(qq) Neither the Government nor any prime contractor under a
Government prime contract has withheld or setoff, or attempted to withhold or
setoff, monies due to the Company or any Subsidiary under any of its contracts
awarded within the past two years except as is done in the normal course of
business under standard Government contract terms.
(rr) Neither the Company nor any Subsidiary is currently under
administrative, civil, or criminal investigation or indictment with respect to
any alleged irregularity, misstatement, or omission arising under or in any way
relating to any of its Government contracts, bids, quotations, or proposals,
past or present, except as set forth in the Prospectus.
(ss) The Company and each Subsidiary is not undergoing and has
not undergone any audit, and has no knowledge or any basis for impending audits
in the future, arising under or relating to any Government contract.
(tt) The Company and each Subsidiary has no interest in any
pending or potential claims against the Government or against any prime
contractor, subcontractor, or vendor arising under or relating to any Government
contract. The Company and each Subsidiary has no knowledge of any facts upon
which such a claim could reasonably be based in the future.
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(uu) The Company and each Subsidiary has entered into no
financing arrangements with respect to the performance of any current material
Government contract.
(vv) The Company and each Subsidiary possesses all necessary
security clearances and permits for the execution of its obligations under any
Government contract to which each is currently a party. The Company and each
Subsidiary has never been denied a Government security clearance.
(ww) Other than the filing of the Certificate of Merger with
the Secretary of State for the State of Delaware which will be filed on or prior
to the Closing Date, all approvals, consents and filings required or necessary
to effectuate the Merger have been obtained, except for shareholder approval to
be obtained pursuant to action at a meeting of Xxxx'x shareholders scheduled for
April 30, 1998. The Company knows of no reason why the Merger would not be
approved and effective by the Closing Date.
(xx) The registration statement on Form S-4 (the "S-4") with
respect to the Stock to be issued in connection with the Merger has been
declared effective and no stop order has been issued pertaining thereto, nor has
the Commission instituted or threatened to institute any proceedings with
respect to such an order. The S-4 and the proxy statement/prospectus contained
therein conformed in all material respects to the requirements of the Act and
the Rules and Regulations thereunder, and did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(yy) All conditions for closing of the IDP Acquisition with
respect to any party to the IDP Acquisition Agreement have been met or will be
met or waived or waived as of the Closing Date and all actions required or
contemplated to be completed prior to closing of the IDP Acquisition shall be
been completed. All approvals, consents and filings required or necessary to
effectuate the IDP Acquisition shall have been obtained.
The representations and warranties set forth in this Section 2A
relating to IDP and PRIMO, (i) if and to the extent they address matters that
are not addressed by the representations and warranties regarding IDP and
PRIMO set forth in Sections 2.1 to 2.18 of the Acquisition Agreement dated
March 9, 1998 among Xxxxxx Xxxxxx, D. Xxxxx Xxxxxx, Xxxxx X. Xxxxxx and Xxxxx
X. Xxxxxx, Xxxx and the Company (the "Acquisition Agreement"), are made to
the best knowledge of the Company, and (ii) to the extent that they address
the same matters that are addressed by such representations and warranties in
the Acquisition Agreement, are subject to the same express qualifications as
such representations and warranties in the Acquisition Agreement.
SECTION 2B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
The Selling Stockholders jointly and severally represent and warrant to, and
agree with, each of the Underwriters that:
(a) They (i) have the full right, power and authority to
execute and deliver this Agreement; (ii) on the Option Closing Date will be the
owners of the Selling Stockholders' Optional Shares, free and clear of all
liens, charges, encumbrances and restrictions; (iii) have paid the full purchase
price required to be paid for such Stock; (iv) on the Option Closing Date will
have paid or provided for all stock transfer or other taxes (other than income
taxes) required to be paid by the Selling Stockholders in connection
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with the sale and transfer of the Selling Stockholders' Optional Shares and all
laws imposing such taxes will have been fully complied with; and (v) on the
Option Closing Date will have the full legal right, power and authority to
sell, transfer and deliver the Selling Stockholders' Optional Shares hereunder
and convey good and marketable title to such Selling Stockholders' Optional
Shares, free and clear of all liens, charges, encumbrances, equities, claims
and restrictions whatsoever.
(b) This Agreement has been duly authorized executed and
delivered by the Selling Stockholders. This Agreement constitutes the valid and
binding agreements of the Selling Stockholders enforceable in accordance with
its terms.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions herein or contemplated nor the compliance
with the terms hereof by the Selling Stockholders will conflict with, or result
in a breach of any of the terms or provisions of, or constitute a default under
any indenture, mortgage deed of trust, purchase agreement or other agreement or
instrument to which the Selling Stockholders or any one of them is a party or by
which the Selling Stockholders are bound and no consent, approval, authorization
or order of any court or governmental agency or body is required for the
consummation by the Selling Stockholders of the transactions on the Selling
Stockholders' part herein contemplated, except such as may be required under the
Act or under state securities or blue sky laws.
(d) The Selling Stockholders have not, and at the Option
Closing Date will not have, taken, and agree that they will not take, directly
or indirectly, any action to cause or result in, or which has constituted, or
might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Stock to facilitate the sale or resale of any of the
Shares. Other than as permitted by the Act and the Rules and Regulations
thereunder, the Selling Stockholders have not distributed and will not
distribute any Preliminary Prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares.
SECTION 3. PURCHASE OF SECURITIES BY THE UNDERWRITERS. On the basis of
the representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth (i) the Company agrees to
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at a purchase price per share of
$_____, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and (ii) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company and the Selling Stockholders agree to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders, at the
purchase price per share set forth in clause (i) of this Section 3, its
proportionate share of the number of Optional Shares as to which such election
shall have been exercised (based on the monetary
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obligation of the several Underwriters hereunder on account of the purchase of
Firm Shares).
The Company and the Selling Stockholders hereby grant to the
Underwriters the right to purchase at their election up to 487,500 Optional
Shares, at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering over-allotments, if any, in the sale of the Firm
Shares. Each such election to purchase Optional Shares may be exercised only by
written notice from the Representatives to the Company and the Selling
Stockholders, given within a period of thirty (30) calendar days after the date
of this Agreement which notice shall set forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the Closing Date
or, unless you and the Company and the Selling Stockholders otherwise agree in
writing, no earlier than two (2) nor later than ten (10) business days after the
date of such notice. In the event that the over-allotment option is not
exercised in full, the Company and the Selling Stockholders will each sell 50%
of such Optional Shares as to which the option has been exercised.
SECTION 4. OFFERING OF THE SHARES BY THE UNDERWRITERS. Upon the
authorization by the Representatives of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
SECTION 5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) The Firm Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered, in such names as the Representatives may request upon at least
forty-eight (48) hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor in Federal (same day) funds. The Company will cause the
certificates representing the Firm Shares to be made available for checking and
packaging at least twenty-four (24) hours prior to the Closing Date (as defined
below) with respect thereto at the office of Xxxxxx, Xxxxx Xxxxx, Incorporated,
0000 Xxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 or such other location as the
Representatives may reasonably designate (the "Designated Office"). The time and
date of such delivery and payment shall be, with respect to the Firm Shares, at
10:00 o'clock a.m., Washington, DC time, on ______________________, 1998 or such
other time and date as the Representatives and the Company may agree. Such time
and date for delivery of the Firm Shares is herein called the "Closing Date,"
which shall also be the closing date for the Merger and the IDP Acquisition.
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(b) Delivery and payment of any Optional Shares to be
purchased by each Underwriter pursuant hereto shall be made at the Designated
Office at 10:00 o'clock a.m., Washington, DC time, on the date specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Optional Shares, or such other time and date as the Representatives and
Company and the Selling Stockholders may agree. Such time and date for delivery
of Optional Shares is herein called the "Option Closing Date." Payment for the
Optional Shares shall be made by wire transfer or certified or bank cashier's
check in Federal (next day) funds, payable to the order of the Company or the
applicable Selling Stockholders upon delivery to the Representatives of
certificates representing the Optional Shares being purchased for the respective
accounts of the Underwriters. The certificates representing the Optional Shares
to be delivered shall be in such denominations and registered in such names as
the Representatives request not less than forty-eight (48) hours prior to the
Option Closing Date, and shall be made available to the Representatives for
inspection, checking and packaging at the aforesaid office of the Company's
transfer agent or correspondent not less than twenty-four (24) hours prior to
such Closing Date.
(c) The documents to be delivered at the Closing Date or
Option Closing Date, as the case may be, by or on behalf of the parties hereto
pursuant to Section 8 hereof, including the cross-receipt for the Shares and any
additional documents requested by the Underwriters, will be delivered to the
offices of Xxxxxxx, Baetjer and Xxxxxx, LLP, 1800 Mercantile Bank & Trust
Building, Two Xxxxxxx Plaza, Baltimore, Maryland 21201 or such other location as
may be agreed upon by the Representatives and the Company or the Selling
Stockholders, as the case may be (the "Closing Location"), and the Shares will
be delivered at the Designated Office, on the Closing Date or the Option Closing
Date, as the case may be.
(d) A meeting will be held at the Closing Location at 2:00
p.m., Washington, D.C. time, on the business day next preceding Closing Date or
Option Closing Date, as the case may be, or at such other time as is mutually
agreed upon by the parties hereto, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding paragraph will be available
for review by the parties hereto.
SECTION 6. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
practicable. If required, the Company will file the Prospectus and any
amendments or supplements thereto with the Commission in the manner and within
the time period required by Rule 424(b). During any time when a prospectus
relating to the Shares is required to be delivered under the Act, the Company
will comply with all requirements imposed upon it by the Act and the
-18-
Rules and Regulations to the extent necessary to permit the continuance of
sales of or dealings in the Shares in accordance with the provisions hereof and
of the Prospectus, as then amended or supplemented. With respect to any
registration statement, prospectus, amendment, or supplement to be filed with
the Commission in connection with the Shares, the Company will provide a copy
of each such document to the Representatives a reasonable time prior to the
date such document is proposed to be filed with the Commission and will not
file any such document without the consent of the Representatives. Any such
registration statement, prospectus, amendment or supplement, when filed, will
comply with the Act. In the event that the Registration Statement is effective
at the time of execution of this Agreement, but the total number of Shares
subject to this Agreement exceeds the number of Shares covered by the
Registration Statement, the Company will promptly file with the Commission on
the date hereof a registration statement pursuant to Rule 462(b) in accordance
with the requirements of such Rule and will make payment of the filing fee
therefor in accordance with the requirements of Rule 111(b) under the Act.
(b) The Company will advise the Representatives promptly (i)
when the Registration Statement, as amended, has become effective; (ii) if the
provisions of Rule 430A promulgated under the Act will be relied upon, when the
Prospectus has been filed in accordance with said Rule 430A; (iii) when any
post-effective amendment to the Registration Statement becomes effective; (iv)
of any request made by the Commission for amendments or supplements to the
Registration Statement, any Preliminary Prospectus or Prospectus or for
additional information; (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or any amendment or supplement thereto or
the institution or threat of any investigation or proceeding for that purpose,
and will use its best efforts to prevent the issuance of any such order; and
(vi) of the receipt of any comments from the Commission regarding the
Registration Statement, any post-effective amendment thereto, the Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto. The Company
will use its best efforts to prevent the issuance of any stop order by the
Commission, and if at any time the Commission shall issue any stop order, the
Company will use its best efforts to obtain the withdrawal of such stop order at
the earliest possible moment.
(c) The Company will cooperate with the Representatives, their
counsel and the Underwriters in qualifying or registering the Shares for sale,
or obtaining an exemption therefrom, under the blue sky laws of such
jurisdictions as the Representatives shall designate, and will continue such
qualifications or registrations or exemptions in effect so long as reasonably
requested by the Representatives to effect the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is not
presently qualified.
-19-
(d) The Company consents to the use of the Prospectus (and any
amendment or supplement thereto) by the Underwriters and all dealers to whom the
Shares may be sold, in connection with the offering or sale of the Shares and
for such period of time thereafter as the Prospectus is required by law to be
delivered in connection therewith. If, at any time when a prospectus relating to
the Shares is required to be delivered under the Act, any event occurs as a
result of which the Prospectus, as then amended or supplemented, would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading, or if it becomes
necessary at any time to amend or supplement the Prospectus to comply with the
Act or the Rules and Regulations, the Company promptly will so notify the
Representatives and will prepare and file with the Commission an amendment to
the Registration Statement or an amendment or supplement to the Prospectus which
will correct such statement or omission or effect such compliance; each such
amendment or supplement to be reasonably satisfactory to counsel to the
Underwriters.
(e) As soon as practicable, but in any event not later than
forty-five (45) calendar days after the end of the 12-month period beginning on
the day after the end of the fiscal quarter of the Company during which the
effective date of the Registration Statement occurs (90 calendar days in the
event that such quarter is the Company's last fiscal quarter), the Company will
make generally available to its security holders, in the manner specified in
Rule 158(b) of the Rules and Regulations, and will deliver to the
Representatives, an earnings statement which will be in the detail required by,
and will otherwise comply with, the provisions of Section 11(a) of the Act and
Rule 158(a) of the Rules and Regulations, which statement need not be audited
unless required by the Act or the Rules and Regulations, covering a period of at
least twelve (12) consecutive months after the effective date of the
Registration Statement.
(f) During the period of three (3) years commencing with the
date hereof, the Company will deliver to the Representatives:
(i) within ninety (90) calendar days after the end of each
fiscal year, financial statements for the Company, certified by the Company's
independent certified public accountants, including a balance sheet, statement
of operations, statement of stockholders' equity and statement of cash flows,
with supporting schedules, prepared in accordance with generally accepted
accounting principles, as at the end of such fiscal year and for the twelve
(12) months then ended, accompanied by a copy of the certificate or report
thereon of such independent certified public accountants; provided that if,
during such five-year period, the Company has active subsidiaries, the
foregoing financial statements will be on a consolidated basis to the extent
that the accounts of the Company and its subsidiaries are consolidated, and
will be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated;
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(ii) as soon as practicable after filing with the
Commission, all such reports, forms or other documents as may be required from
time to time, under the Act, the Rules and Regulations, the Exchange Act and the
rules and regulations thereunder;
(iii) as soon as available, copies of all information
(financial or other) mailed to stockholders;
(iv) as soon as they are available, copies of all reports
and financial statements furnished to or filed with the National Association of
Securities Dealers, Inc. ("NASD"), the NNM or any other securities exchange or
market;
(v) promptly following release by the Company, every press
release and every material news item or article of interest to the financial
community in respect of the Company or its affairs which was released or
prepared by the Company; and
(vi) as soon as possible following receipt of a
request, any additional information publicly available nature concerning the
Company or its business which the Representatives may reasonably request.
(g) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the Transfer Agent) for its Stock.
(h) The Company will furnish, without charge, to the
Representatives or on the Representatives' order, at such place as the
Representatives may designate, copies of the Preliminary Prospectus, the
Registration Statement and any pre-effective or post-effective amendments
thereto, and any registration statement filed pursuant to Rule 462(b) (of which
three (3) copies will be signed and will include all financial statements and
exhibits) and the Prospectus, and all amendments and supplements thereto in each
case as soon as available and in such quantities as the Representatives may
reasonably request.
(i) Except pursuant to this Agreement, the Company will not,
directly or indirectly, without the prior written consent of the
Representatives, issue, offer, sell, offer to sell, contract to sell, grant any
option to purchase, pledge or otherwise dispose (or announce any issuance,
offer, sale, offer of sale, contract of sale, grant of any option to purchase,
pledge or other disposition) of any shares of Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Stock for a
period of one hundred eighty (180) calendar days after the date hereof, other
than issuances pursuant to the exercise of stock options outstanding on or
granted subsequent to the date hereof, pursuant to a stock option or other
employee benefit plan in existence on the date hereof. The Company will use its
best efforts to cause its officers and directors and significant security
holders to agree to refrain for a period of one hundred eighty (180) calendar
days
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from the date of this agreement not to sell, transfer or otherwise dispose of
any securities of the Company.
(j) The Company will cause the Shares to be duly approved for
listing on the NNM prior to the Closing Date. The Company shall take all
necessary and appropriate action such that the Shares are included for quotation
on the NNM as soon as practicable after the effectiveness of the Registration
Statement and the Shares shall remain so authorized for at least thirty-six (36)
months thereafter.
(k) Neither the Company nor any of its officers or directors,
nor affiliates of any of them (within the meaning of the Rules and Regulations)
will take, directly or indirectly, any action designed to, or which might in the
future reasonably be expected to, cause or result in, or which will constitute,
stabilization or manipulation of the price of any securities of the Company.
(l) The Company will apply the net proceeds of the offering
received in the manner set forth under the caption "Use of Proceeds" in the
Prospectus. The Company will operate its business in such a manner and, pending
application of the net proceeds of the offering for the purposes and in the
manner set forth under the caption "Use of Proceeds" in the Prospectus, will
invest such net proceeds in such securities so as not to become an "investment
company" as such term is defined under the Investment Company Act.
(m) The Company will timely file all such reports, forms or
other documents as may be required from time to time, under the Act, the Rules
and Regulations, the Exchange Act and the rules and regulations thereunder, and
all such reports, forms and documents so filed will comply as to form and
substance with the applicable requirements under the Act, the Rules and
Regulations, the Exchange Act and the rules and regulations thereunder which may
from time to time be applicable to the Company. The Company shall comply with
the provisions of all undertakings contained in the Registration Statement.
(n) Except as described in the Prospectus, the Company will
not, until the earlier to occur of (i) thirty (30) calendar days following the
date of this Agreement or (ii) the Option Closing Date immediately after which
all Optional Shares shall have been so purchased, incur any liability or
obligation, direct or contingent, or enter into any material transaction, other
than in the ordinary course of business.
(o) Other than in connection with the Merger and the IDP
Acquisition, for a period of thirty (30) calendar days following the date of
this Agreement the Company will not acquire any of the Company's capital stock,
declare or pay any dividend or make any other distribution upon its capital
stock payable to its holders of record on a date prior to the expiration of
such 30-day period.
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(p) The Company will comply or cause to be complied with the
conditions to the Underwriters' obligations set forth in Section 8 hereof.
(q) During the period of thirty (30) calendar days commencing
with the date of this Agreement, the Company shall neither issue any press
release or other communication, directly or indirectly, nor hold any press
conference with respect to the offering of the Shares, the Company, its
Subsidiaries or its business, results of operations, condition (financial or
otherwise), property, assets, liabilities or prospects of the Company or any of
its Subsidiaries, without the prior written consent of the Representatives,
which consent shall not unreasonably be denied or delayed; PROVIDED, HOWEVER,
that if counsel to the Company is of the opinion that the issuance of a press
release or other communication or a press conference is required to comply with
or avoid a violation of applicable law, and having been so informed the
Representatives decline to consent thereto, the Company shall be permitted to
issue such press release or other communication or hold such press conference in
the manner advised by its counsel.
SECTION 7. EXPENSES.
(a) The Company agrees to pay (i) the costs incident to the
issuance, sale and delivery of the Shares and any taxes payable in that
connection; (ii) the costs incident to the preparation, printing and filing
under the Act of the registration statement and any amendments and exhibits
thereto; (iii) the costs of distributing the registration statement as
originally filed and each amendment thereto and any pre-effective and
post-effective amendments thereto, any Preliminary Prospectus, the Prospectus
and any amendment or supplement to the Prospectus, all as provided in this
agreement; (iv) any applicable listing or other fees; (v) the fees and expenses
of filing, if any, with foreign securities administrators and of qualifying the
Shares under the securities laws of any applicable state and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the underwriters); (vi) the cost incident to tombstone
advertising with respect to the offer and sale of the Shares up to a maximum of
$12,500; and (vii) all other costs and expenses incident to the performance of
the obligations of the Company and the Selling Stockholders under this
Agreement.
(b) If the purchase of the Firm Shares as herein contemplated
is not consummated for any reason other than the Underwriters' default under
this Agreement or other than by reason of Section 11(a), the Company shall
reimburse the several Underwriters, for their out-of-pocket expenses (including
but not limited to counsel fees and disbursements) in connection with any
investigation made by them, and any preparation made by them in respect of
marketing of the Shares or in contemplation of the performance by them of their
obligations hereunder.
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SECTION 8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of each Underwriter to purchase and pay for the Shares set forth
opposite the name of such Underwriter in Schedule I are subject to the
continuing accuracy of the representations and warranties of the Company and
the Selling Stockholders herein as of the date hereof, as of the Closing Date,
and as of each Option Closing Date, if any, as if they had been made on and as
of the Closing Date or Option Closing Date, as the case may be; the accuracy on
and as of the Closing Date, and each Option Closing Date, if any, of the
statements of officers of the Company made pursuant to the provisions hereof;
the performance by the Company on and as of the Closing Date, and each Option
Closing Date, as the case may be, of their respective covenants and agreements
hereunder; and the following additional conditions:
(a) The Registration Statement shall have been declared
effective, and the Prospectus (containing the information omitted pursuant to
Rule 430(A)) shall have been filed with the Commission not later than the
Commission's close of business on the second business day following the date
hereof or such later time and date to which the Representatives shall have
consented. No stop order suspending the effectiveness of the Registration
Statement or any amendment thereto shall have been issued, and no proceedings
for that purpose shall have been instituted or threatened or, to the best
knowledge of the Company or the Representatives, shall be contemplated by the
Commission. The Company shall have complied with any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise).
(b) The Representatives shall not have advised the Company
that the Registration Statement, or any amendment thereto, contains an untrue
statement of fact which, in the Representatives' opinion, is material, or omits
to state a fact which, in the Representatives' opinion, is material and is
required to be stated therein or is necessary to make the statements therein not
misleading, or that the Prospectus, or any supplement thereto, contains an
untrue statement of fact which, in the Representatives' opinion, is material, or
omits to state a fact which, in the Representatives' opinion, is material and is
required to be stated therein or is necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(c) On or prior to the Closing Date, and any Option Closing
Date, as the case may be, the Representatives shall have received from counsel
to the Underwriters, such opinion or opinions with respect to the issuance and
sale of the Firm Shares or the Optional Shares, as the case may be, the
Registration Statement and the Prospectus and such other related matters as the
Representatives reasonably may request and such counsel shall have received such
documents and other information as they request to enable them to pass upon such
matters.
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(d) On the Closing Date or any Option Closing Date, the
Underwriters shall have received the opinion, dated the Closing Date or such
Option Closing Date as the case may be, of Xxxxx, Day, Xxxxxx & Xxxxx, counsel
to Xxxx and the Company, to the effect set forth in Exhibit A attached hereto.
(e) On the Closing Date or any Option Closing Date, the
Underwriters shall have received the opinion, dated the Closing Date or such
Option Closing Date as the case may be, of Thacher, Xxxxxxxx and Xxxx, LLP,
counsel to IDP, to the effect set forth in Exhibit B attached hereto.
(f) On or prior to the Closing Date or any Option Closing
Date, as the case may be, counsel to the Underwriters shall have been furnished
such documents, certificates and opinions as they may reasonably require in
order to evidence the accuracy, completeness or satisfaction of any of the
representations or warranties of the Company or conditions herein contained.
(g) At the time that this Agreement is executed by the Company
the Underwriters shall have received from Ernst & Young, LLP a letter as of the
date of this Agreement in form and substance satisfactory to the Representatives
(the "E & Y Original Letter"), and on the Closing Date and any Option Closing
Date the Underwriters shall have received from such firm a letter dated the
Closing Date or such Option Closing Date, stating that, as of a specified date
not earlier than five (5) calendar days prior to the Closing Date or Option
Closing Date, as the case may be, nothing has come to the attention of such firm
to suggest that the statements made in the E & Y Original Letter are not true
and correct.
(h) At the time that this Agreement is executed by the Company
the Underwriters shall have received from KPMG Peat Marwick, LLP a letter as of
the date of this Agreement in form and substance satisfactory to the
Representatives (the "KPMG Original Letter"), and on the Closing Date and any
Option Closing Date the Underwriters shall have received from such firm a letter
dated the Closing Date or such Option Closing Date, stating that, as of a
specified date not earlier than five (5) calendar days prior to the Closing Date
or Option Closing Date, as the case may be, nothing has come to the attention of
such firm to suggest that the statements made in the Original Letter are not
true and correct.
(i) At the time that this Agreement is executed by the
Company the Underwriters shall have received from Xxxxx, Xxxx & Company, P.A. a
letter as of the date of this Agreement in form and substance satisfactory to
the Representatives (the "DS Original Letter"), and on the Closing Date and any
Option Closing Date the Underwriters shall have received from such firm a
letter dated the Closing Date or such Option Closing Date, stating that, as of
a specified date not earlier than five (5) calendar days prior to the Closing
Date or Option Closing Date, as the case may be, nothing has come to the
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attention of such firm to suggest that the statements made in the DS Original
Letter are not true and correct.
(j) On the Closing Date and any Option Closing Date, the
Underwriters shall have received a certificate, dated the Closing Date or such
Option Closing Date, as the case may be, of the principal executive officer and
the principal financial or accounting officer of the Company to the effect that
each such person has carefully examined the Registration Statement and the
Prospectus and any amendments or supplements thereto and this Agreement, and
that:
(i) the representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the Closing Date or
the Option Closing Date, as the case may be, and the Company has complied, in
all material respects, with all agreements and covenants and satisfied all
conditions contained in this Agreement on its part to be performed or satisfied
at or prior to the Closing Date or such Option Closing Date; and
(ii) 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, to the best knowledge of each such person,
are contemplated or threatened under the Act and any and all filings required by
Rule 424, Rule 430A and Rule 462(b) have been timely made.
References to the Registration Statement and the Prospectus in
this paragraph (j) are to such documents as amended and supplemented at the date
of the certificate required hereby.
(k) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and including
the Closing Date or any Option Closing Date, as the case may be, there has not
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (g), (h) & (i) of this Section 8 or (ii) any change, or any
development involving a prospective change, in the business or properties of the
Company which change or decrease in the case of clause (i) or change or
development in the case of clause (ii) makes it impractical or inadvisable in
the Representatives' judgment to proceed with the public offering or the
delivery of the Shares as contemplated by the Prospectus.
(l) No order suspending the sale of the Shares in any
jurisdiction designated by you pursuant to Section 6(c) hereof has been issued
on or prior to the Closing Date or any Option Closing Date, as the case may be,
and no proceedings for that purpose have been instituted or, to the best
knowledge of such persons or that of the Company, have been or are contemplated.
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(m) The Representatives shall have received from each person
who is a director or officer of the Company, each stockholder, and each other
person or group of persons who has the right to acquire more than five percent
(5%) or more of the outstanding shares of Stock, assuming exercise of currently
exercisable stock options on a fully diluted basis, an agreement to the effect
that such person will not, directly or indirectly, without the prior written
consent of the Representatives, on behalf of the Underwriters, offer, sell,
contract to sell, grant any option to purchase, pledge or otherwise dispose (or
announce any offer, sale, contract of sale, grant of an option to purchase,
pledge or other disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 calendar days after the date of the Prospectus.
(n) The Shares shall have been accepted for inclusion on the
NNM.
(o) The NASD, upon review of the terms of the public offering
of the Shares contemplated hereby, shall have indicated that it has no objection
to the underwriting arrangements pertaining to the sale of the Shares and the
Underwriters' participation in the sale of the Shares as so contemplated.
(p) The Merger and the Agreement of Merger shall have been
approved by the necessary affirmative vote of the stockholders of Xxxx. A
Certificate of Merger with respect to the Merger shall have been duly filed with
the Secretary of State of the State of Delaware and all approvals, consents and
filings required or necessary to effectuate the Merger as of the Closing Date
shall have been obtained and the Merger shall be effective as of the Closing
Date.
(q) The registration statement on Form S-4 with respect to the
Stock to be issued in connection with the Merger shall have been declared
effective and no stop order shall have been issued pertaining thereto.
(r) Except for the closing of the offering contemplated hereby
and the closing of the Merger, all other conditions for closing for the IDP
Acquisition with respect to each party to the IDP Acquisition Agreement shall
have been met or waived and all actions required or contemplated to be completed
prior to closing of the IDP Acquisition shall be been completed. All approvals,
consents and filings required or necessary to effectuate the IDP Acquisition
shall have been obtained. The IDP Acquisition shall be effective on the Closing
Date.
(s) FBW shall have received $300,000 from the Company in
satisfaction of the advisory fee owed to FBW pursuant to the letter agreement
between the Company and FBW dated January 15, 1998, $50,000 of which has been
received as of the date of this Agreement.
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(t) The Company shall have furnished the Underwriters with
such further opinions, letters, certificates or documents as the Representatives
or counsel for the Underwriters may reasonably request.
All opinions, certificates, letters and documents to be furnished by
the Company will comply with the provisions hereof only if they are reasonably
satisfactory in all material respects to the Underwriters and to counsel for the
Underwriters. The Company shall furnish the Underwriters with manually signed or
conformed copies of such opinions, certificates, letters and documents in such
quantities as you reasonably request. The certificates delivered under this
Section 8 shall constitute representations, warranties and agreements of the
Company as to all matters set forth therein as fully and effectively as if
such matters had been set forth in Section 2 of this Agreement.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either the Closing Date or any Option Closing Date is
not so satisfied, this Agreement, at the Representatives' election, will
terminate upon notification to the Company without liability on the part of any
Underwriter (including the Representatives) or the Company, except for the
expenses to be paid by the Company pursuant to Section 7 hereof and except to
the extent provided in Section 9 hereof.
SECTION 9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, and its officers, directors, partners, employees, agents and
counsel, and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
and all losses, claims, damages, liabilities or expenses whatsoever (which
shall include, for all purposes of this Section 9, but not be limited to,
attorneys' fees and any and all fees and expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in
settlement), joint or several (and actions in respect thereof), to which such
Underwriter, officer, director, partner, employee, agent, counsel or
controlling person may become subject, under the Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto, or any blue sky
application or other document executed by the Company specifically for the
purposes of qualifying, or based upon written information furnished by the
Company in any state or other jurisdiction in order to qualify, any or all of
the Shares under the securities or blue sky laws thereof (any such application,
document or information being hereinafter called a "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 therein not
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misleading, and will reimburse, as incurred, reasonable expenses of such
Underwriter, partner, employee, agent, counsel or controlling person in
connection with investigating, defending or appearing as a third party witness
in connection with any such loss, claim, damage, liability, expense or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability, expense or action arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon and
in conformity with information furnished in writing to the Company on behalf of
such Underwriter through the Representatives expressly for use therein, and
PROVIDED, FURTHER, that such indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage, liability, expense or action purchased Shares which
are the subject thereof to the extent that any such loss, claim, damage,
liability or action (i) results from the fact that such Underwriter failed to
send or give a copy of the Prospectus (as amended or supplemented) to such
person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(as amended and supplemented), unless such failure resulted from non-compliance
by the Company with Section 6(h) hereof. The indemnity agreement in this
paragraph (a) shall be in addition to any liability which the Company may
otherwise have.
(b) Each of the Underwriters agrees severally, but not
jointly, to indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities or expenses whatsoever (which shall include, for all purposes of
this Section 9, but not be limited to, attorneys' fees and any and all fees and
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement), (and actions in respect thereof) to which the
Company or any such director, officer, or controlling person may become subject,
under the Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities, expenses
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or any amendment or supplement thereto
or in 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 not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing by that Underwriter through the
Representatives to the Company expressly for use therein. The Company
acknowledges that the statements with respect to the public
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offering of the Shares set forth under the caption "Underwriting" and the
stabilization legend in the Prospectus have been furnished by the Underwriters
to the Company expressly for use therein and constitute the only information
furnished in writing by or on behalf of the Underwriters for inclusion in the
Prospectus. The indemnity agreement contained in this paragraph (b) shall be in
addition to any liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 9, notify such indemnifying party or
parties of the commencement thereof; but the failure so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under paragraph (a) or (b) of this Section
9 to the extent that the indemnifying party was not adversely affected by such
omission. In case any such action is brought against an indemnified party and
it notifies an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties against which a claim is to be made will be
entitled to participate therein and, to the extent that it or they may wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party has reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and otherwise to participate in the defense of such action on behalf
of such indemnified party or parties. In no event shall the indemnifying party
be liable for fees and expenses of more than one counsel separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdictions arising out
of the same general allegations or circumstances. Upon receipt of notice from
the indemnifying party to such indemnified party of its election so to assume
the defense of such action and approval by the indemnified party of counsel,
the indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses (other than the reasonable costs of
investigation) subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party has employed such
counsel in connection with the assumption of such different or additional legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the indemnifying party has not employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, or (iii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) above in
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respect of any losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) (i) in such proportion as is appropriate to reflect the relative
benefits received by each of the contributing parties, on the one hand, and the
party to be indemnified, on the other hand, from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of each of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. In any case where the Company is a
contributing party and the Underwriters are the indemnified party, the relative
benefits received by the Company on the one hand, and the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (before deducting expenses) bear to
the total underwriting discounts received by the Underwriters hereunder, in
each case as set forth in the table on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above in this paragraph (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph (d), the Underwriters shall
not be required to contribute any amount in excess of the underwriting
discounts applicable to the Shares purchased by the Underwriters hereunder. The
Underwriters' obligations to contribute pursuant to this paragraph (d) are
several in proportion to their respective underwriting obligations, and not
joint. No person guilty of fraudulent misrepresentations (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. For purposes of this
paragraph (d), (i) each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter and (ii) each director of
the Company, each officer of the Company who has signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which claim for contribution may be
made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not
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relieve the party or parties from whom contribution may be sought from any
other obligation (x) it or they may have hereunder or otherwise than under this
paragraph (d) or (y) to the extent that such party or parties were not
adversely affected by such omission. The contribution agreement set forth above
shall be in addition to any liabilities which any indemnifying party may
otherwise have.
SECTION 10. REPRESENTATIONS, ETC. TO SURVIVE DELIVERY. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers and the Underwriters,
respectively, set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriters, and will survive delivery of and payment for the Shares. Any
successors to the Underwriters shall be entitled to the indemnity, contribution
and reimbursement agreements contained in this Agreement.
SECTION 11. EFFECTIVE DATE AND TERMINATION.
(a) This Agreement shall become effective at 9:00 a.m.,
Washington, D.C. time, on the first business day following the date hereof, or
at such earlier time after the Registration Statement becomes effective as the
Representatives, in its sole discretion, shall release the Shares for the sale
to the public, unless prior to such time the Representatives shall have
received written notice from the Company that it elects that this Agreement
shall not become effective, or the Representatives shall have given written
notice to the Company that the Representatives on behalf of the Underwriters
elect that this Agreement shall not become effective; PROVIDED, HOWEVER, that
the provisions of this Section 11 and of Section 7 and Section 9 hereof shall
at all times be effective. For purposes of this Section 11(a), the Shares to be
purchased hereunder shall be deemed to have been so released upon the earlier
of notification by the Representatives to securities dealers releasing such
Shares for offering or the release by the Representatives for publication of
the first newspaper advertisement which is subsequently published relating to
the Shares.
(b) This Agreement (except for the provisions of Sections 7
and 9 hereof) may be terminated by the Representatives by notice to the Company
in the event that the Company has failed to comply in any respect with any of
the provisions of this Agreement required on its part to be performed at or
prior to the Closing Date or any Option Closing Date, as the case may be, or if
any of the representations or warranties of the Company are not accurate in any
respect or if the covenants, agreements or conditions of, or applicable to, the
Company herein contained have not been complied with in any respect or satisfied
within the time specified on the Closing Date or any Option Closing Date, as the
case may be, or if prior to the Closing Date or any such Option Closing Date:
(i) the Company shall have sustained a loss by strike, fire,
flood, accident or other calamity of such a character as to interfere materially
with the
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conduct of the business and operations of the Company regardless of whether or
not such loss was insured;
(ii) trading in the Stock shall have been suspended by the
Commission or the NNM or trading in securities generally on the New York Stock
Exchange or the NNM shall have been suspended or a material limitation on such
trading shall have been imposed or minimum or maximum prices shall have been
established on either such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States;
(v) there shall have been commenced any action, suit or
proceeding at law or in equity against the Company, or by any federal, state or
other commission, board or agency, wherein any unfavorable decision would
materially adversely affect the business, properties or financial condition of
the Company;
(vi) there shall have occurred any material adverse market
conditions, of which the Representatives shall be the sole judge;
(vii) Company's independent public accountants shall have
imposed qualifications in certifying to, or its attorneys in opining upon,
material items including, without limitation, information in the footnotes to
the financial statements or matters incident to the issuance and sale of the
Shares, corporate proceedings or other subjects; or
(viii) there shall have been a material adverse change in
(i) general economic, political or financial conditions or (ii) the present or
prospective business or condition (financial or other) of the Company that, in
each case, in the Representatives judgment makes it impracticable or inadvisable
to make or consummate the public offering, sale or delivery of the Company's
Shares on the terms and in the manner contemplated in the Prospectus and the
Registration Statement.
(c) Termination of this Agreement under this Section 11 or
Section 12 after the Firm Shares have been purchased by the Underwriters
hereunder shall be applicable only to the Optional Shares. Termination of this
Agreement shall be without liability of any party to any other party other than
as provided in Sections 7 and 9 hereof.
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SECTION 12. SUBSTITUTION OF UNDERWRITERS. If one or more of the
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8 or
11 hereof) to purchase and pay for (a) in the case of the Closing Date, the
number of Firm Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to the Representatives such Firm Shares in accordance with the terms
hereof or (b) in the case of any Option Closing Date, the number of Optional
Shares agreed to be purchased by such Underwriter or Underwriters upon tender to
the Representatives of such Optional Shares in accordance with the terms hereof,
and the number of such Shares shall not exceed ten percent (10%) of the Firm
Shares or Optional Shares required to be purchased on the Closing Date or such
Option Closing Date, as the case may be, then, each of the non-defaulting
Underwriters shall purchase and pay for (in addition to the number of such
Shares which it has severally agreed to purchase hereunder) its proportionate
share (based on the monetary obligations of the several Underwriters hereunder
on account of the purchase of Firm Shares, excluding the Firm Shares allocable
to the defaulting Underwriter or Underwriters) which the defaulting Underwriter
or Underwriters shall have so failed or refused to purchase on such Closing Date
or Option Closing Date, as the case may be. In such case, the Representatives,
on behalf of the Underwriters, shall have the right to postpone the Closing Date
or the Option Closing Date, as the case may be, to a date not exceeding seven
(7) full business days after the date originally fixed as such Closing Date or
the Option Closing Date, as the case may be, pursuant to the terms hereof in
order that any necessary changes in the Registration Statement, the Prospectus
or any other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise than
for a reason sufficient to justify the termination of this Agreement under the
provisions of Section 8 or 11 hereof) to purchase and pay for (a) in the case of
the Closing Date, the number of Firm Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Firm Shares in accordance
with the terms hereof or (b) in the case of the Option Closing Date, the number
of Optional Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Optional Shares in accordance with the terms hereof,
and the number of such Shares shall exceed ten percent (10%) of the Firm Shares
or Optional Shares required to be purchased by all the Underwriters on the
Closing Date or the Option Closing Date, as the case may be, then (unless within
forty-eight (48) hours after such default arrangements to your satisfaction
shall have been made for the purchase of the defaulted Shares by an Underwriter
or Underwriters) and subject to the provisions of Section 11(b) hereof, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or on the part of the Company except as otherwise provided in
Sections 7 and 9 hereof. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this paragraph. Nothing
in this Section 12, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
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SECTION 13. NOTICES. All communications hereunder shall be in writing
and if sent to the Representatives shall be mailed or delivered or sent by
facsimile transmission and confirmed by letter to Xxxxxx, Xxxxx Xxxxx,
Incorporated at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, XxXxxx, XX 00000, Attention:
Xxxxxxx X. Xxxxx (facsimile number: (000) 000-0000) or, if sent to the Company,
shall be mailed or delivered or sent by facsimile transmission and confirmed by
letter to the Company at 0000 Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx 00000, attention:
Xxxxxx Xxxxx (facsimile number: (000) 000-0000).
SECTION 14. SUCCESSORS. This Agreement shall inure to the benefit of
and be binding upon the Company and each Underwriter and the Company's and each
Underwriter's respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person, except that the representations, warranties, indemnities and
contribution agreements of the Company contained in this Agreement shall also be
for the benefit of the partners, employees and agents of each Underwriter and
any person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and except that the
Underwriters' indemnity and contribution agreements shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement and any person or persons, if any, who control
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Shares from the Underwriters will be deemed a
successor because of such purchase.
SECTION 15. APPLICABLE LAW; JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland,
without giving effect to the choice of law or conflict of law principles
thereof. Each party hereto consents to the jurisdiction of each court in which
any action is commenced seeking indemnity or contribution pursuant to Section 9
above and agrees to accept, either directly or through an agent, service of
process of each such court.
SECTION 16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us three counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
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submitted to the Company for examination, upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Xxxx Computer Corporation
By: ________________________________
Name: _____________________________
Title: ____________________________
Selling Stockholders
------------------------------------
Xxxxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxxxx
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ACCEPTED AS OF THE DATE HEREOF
XXXXXX, XXXXX XXXXX, INCORPORATED
0000 XXX XXXXXX, X.X.
XXXXXXXXXX, X.X. 00000
BY: XXXXXX, XXXXX XXXXX, INCORPORATED
ON BEHALF OF EACH OF THE UNDERWRITERS
By: _________________________________
Name: _______________________________
Title: ______________________________
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SCHEDULE I
NUMBER OF SHARES TO BE
PURCHASED BY EACH UNDERWRITER
Number of Firm
Shares to be Purchased
Name of Underwriter Percentage from the Company
------------------- ---------- ----------------------
Xxxxxx, Xxxxx Xxxxx, Incorporated......
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
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SCHEDULE II
SELLING STOCKHOLDERS
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
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